Is it worth it?

[pelzar]

A guy I know who once offered me a job outside of the markets has approached me looking to back me to trade for him. He runs his own company (nothing to do with markets) and plans to offer me a desk at his place. The capital he is proposing is very intriguing; we would start of spread betting and if all should go well move into DMA!

For me it would mean giving up a salaried (secure) job as a broker- if there is such thing in this climate and simply live off the profit share (while growing the account!) The office is a fifteen minute walk from my house and is ideally located.

Obviously I was futex for the best part of the year so I appreciate the risks (and potential rewards) involved.

Amongst this board there is a lot of experience and wisdom, so I thought I would get some opinion and see if people thought the risk was worth the potential reward.

Any advice/opinion would be much appreciated.

Pelzar

 

[trader_dante]

In all honesty, if you can make money trading, why not trade whilst earning your "secure" salary as a broker, mate!

Depends on how much he will back you with but if you are earning well...why not just save a bit each month until you have the same amount and go it on your own!

 

[MrGecko]

Another thing to consider is that times are not going to be tough forever... if things start to pick up in a few yrs time, and you have survived as a broker w/ a good client book, you are going to be in a very strong position indeed - and you can always trade your own account on the side...

 

[fibonelli]

Another thing to consider is how much are you going to be given and how much of that you would need as a "wage" to meet your living expenses and some.

For example, you expect to make 50% on £100k, but need £35k to live on. Is this feasible?

You should also find out whether the other business is recession resistant, otherwise you may find the capital being withdrawn from you pdq.

I'd recommend that you follow the advice of T_D and MrG.

 

[pelzar]

Another thing to consider is how much are you going to be given and how much of that you would need as a "wage" to meet your living expenses and some.

For example, you expect to make 50% on £100k, but need £35k to live on. Is this feasible?

You should also find out whether the other business is recession resistant, otherwise you may find the capital being withdrawn from you pdq.

I'd recommend that you follow the advice of T_D and MrG.

No chance of the capital being withdrawn the guy is very well situated. Being 19 I am still living at home so my living expences are **** all!!

 

[ns1000]

No chance of the capital being withdrawn the guy is very well situated. Being 19 I am still living at home so my living expences are **** all!!

So you're in a position where you can take a risk. Would you regret missing the opportunity if you don't take it? If the economy sorts itself out in a few years, you can always go back into broking. If it doesn't, chances are you won't have a job anyway.

It's a bit of a gamble, but at 19 I don't really see why you can't take a chance for a couple of years.

 

[pelzar]

Always said you talk sense a lot of sense NS!!

 

[Jack o'Clubs]

My only advice would be to make absolutely sure that the T&Cs are well thought through and signed-off by both of you. I've seen a couple of examples of friends (or at least acquantancies) going in to business together because they knew each other or trusted each other, all for it to fall badly apart when things didn't work out because they hadn't strictly defined who was liable for what. As long as you get that angle covered, sounds interesting: go for it.

 

[barjon]

Ah, it's a risk and reward thing - you must have done the maths to see how your secure(ish) £salary compares against the £+ expectation from trading your guy's account.

Don't forget you're going to have to provide consistent annual returns (think of a figure and halve it) to keep him happy and you solvent.

If the numbers stack up - go for it

cheers

jon

 

[Aspire]

Don't mean to be rude but you say you worked at futex for a year and it obviously didn't work out. What makes you think you can be profitable in this instance?

Also does the backer really understand the chances of him making/losing money from this?

Best of luck with whatever you decide.

 

[pelzar]

Don't mean to be rude but you say you worked at futex for a year and it obviously didn't work out. What makes you think you can be profitable in this instance?

Also does the backer really understand the chances of him making/losing money from this?

Best of luck with whatever you decide.

Fair comment, however when I was there they were keeping trainees on the simulator forever, I started with TD and I understand he has only rescently come off the sim! With no salary and no chance at making I could no longer afford to live especialy with a £100 a week train fair to Woking! However with this I will not be on a sim and I can walk to work so the pressures to make money from the start will be a lot less. When you have no pressure to make money, it's a lot easier!

 

[pelzar]

Right...I start on Monday!!

 

[donaldduke]

Right...I start on Monday!!

Good luck..
Even the best traders have rough periods every now and then. When managing money for others the best bit of luck you can have is not to hit one those periods in the beginning.

 

[montmorencyt2w]

How is it going?

Hi Pelzar,

Just found this,and wondered how you were getting on?

(If you don't mind telling us that is).

On some other thread somewhere, someone was looking to borrow money to get trading capital.
A bank loan was suggested, which sent shivers down my spine (and not in a good way ).

I was trying to think out various scenarios, and the one I came up with was:

Find a group of friends &/or family members whom you can really trust and who trust you.
Borrow a sum from them that they can afford to lose (if it came to the crunch).
Written agreement, of course, not necessarily with lawyers (to keep costs down), but should still be binding.
Interest-free, or nominal, simple interest charge.

After an agreed period, say one year, you either:
pay everyone back, with interest, if any, over a pre-agreed schedule.:
Or:
(if successful, obviously):
Continue to trade their capital, but this time for an agreed percentage of profits, plus any additional capital they want to put in.
Do this for a limited period in the first instance, with an option to renew if both sides happy.

Obviously only any good for someone with proven consistent track record, who has sufficient friends and/or family (and a winning manner...).

Main hurdle after that may be the complications of managing what will necessarily be a largish group of "clients".

This is not a serious proposal/suggestion; just wondering if something like this could ever be feasible.



Cheers,
Mike

 

[blancspa]

Yeap, its difficult

 

[pelzar]

im doing very well thanks, making good money so can't complain! Dont go into the office very often because im trading of daily and weekly timeframes and so i find if i go in, i just get tempted my lower time frames. I have however had an offer from MF Global on their futures desk ( still thinking it over.) With regards to trading with a load/ cc card, FU CK THAT!

 

[montmorencyt2w]

im doing very well thanks, making good money so can't complain! Dont go into the office very often because im trading of daily and weekly timeframes and so i find if i go in, i just get tempted my lower time frames. I have however had an offer from MF Global on their futures desk ( still thinking it over.)

Cool stuff! Glad to hear it. If I remember correctly, you were a bit of a whizz at the lower TFs, but even so, it must be (would be) stressful.

MFG: Nice to have some career choices Treat 'em mean and keep 'em keen
[Disclaimer: this is not career advice ... ]

With regards to trading with a load/ cc card, FU CK THAT!

I'll take that as a "No" then


Cheers,
Mike

 

[jiggly]

your also going to be answerable to someone who doesnt know as much about the markets as you do. how much involvement is he going to have.? that could be very difficult for you.

you may find you will be spending a lot of your time explaining to him what you are doing, when it is all going well he will love you, he may be disappointed when you do poorly, but he will always expect you to make more money, his involvement may create other psychological strains..