So what's my next step?

[Shanghai]

Trading is one of the most solitary of activities so its sometimes a little difficult to know where to go to for advice. I'm looking to see if some of the more experienced traders here can point me in the right direction.

I've been buying shares for the last 18 years but actively trading shares for the last three. I have a nice smooth equity curve these days and am making a consistent 30-40% per year based on around 80 trades per year from an account which is comfortably in 6 figures. I also have pretty shallow drawdowns with a maximum monthly drawdown of 3% last year although I wouldn't expect to do that well normally. I'm not trying to brag, just saying how it is. It has been a long and tough journey to get to this point and I'm not naturally gifted at this, just a hard worker.

I'm not sure though how this journey continues though. I may continue to trade my own account however I may also have some interest in looking at managing other peoples in some capacity. But if i wanted to do this what would I need to do? First of all a verifiable track record would be needed. Of course I have detailed records of all of my trades but they could all be fabricated so I imagine I would need some sort of formal way to do this. I believe there are some companies that can do this but who are they? How long a track record is needed? And then if that can be done who do you contact? There is all this talk about a "sea of money" needed good people to manage it but how do you dip your toe in?

 

[everyonerich]

Companies Express --> quick way to start your own hedge fund

 

[Splitlink]

My opinion, for what it is worth, because I am not involved in commercial, or investment, finance of any kind, is to get known. It will start with a small group of investors who are able to see proof of your investment skills. Your 30%-40% per year is a very attractive return. If you can offer much less than that, many would accept it. Next, you would have to be trusted. Do not be associated in swaps or anything not easily understood. You trade shares. That is easily understood. Don't deviate from that.

Getting to be trusted in financial circles is a long, slow, job and, unfortunately, much damage has been done over the last few years.

This a layman's opinion.

 

[Schopen]

Kudos on your success, I am in awe.There may be some formal financial qualifications you can take depending on your country of residence which might add a string to your bow though you might have to pay for them yourself.

 

[Shanghai]

Thanks the replies. As I suspected there is probably no easy route to be put in front of a fund to manage. I'm not even sure at the moment if I want to go down that route. Isn't one of the benefits of trading that you answer to no-one?

I would also expect my results to be worse if I was managing other's money. I was speaking to another trader last year who has a substantial amount under management and he refuses a lot of trades that come up immediately before his reporting period ends just so that he can preserve his figures. Managing your own money you don't have that problem.

I have recently been offered the chance to manage a small account for an offshore investment company that I am familiar with. Its a small account but I'm looking at it as possibly a way to get my foot in the door.

 

[Black Swan]

http://uk.yhs.search.yahoo.com/avg/...eb_uk&tp=tab&i=23&q=start+your+own+hedge+fund

and you think Madoff might have scared investors away? Not a chance

http://seekingalpha.com/article/112...phenomenon-some-players-start-their-own-funds

 

[DeadMoney]

you should read the book, an American hedge fund by Timothy Sykes.
you can learn a lot about managing money from him.

 

[Shanghai]

you should read the book, an American hedge fund by Timothy Sykes.
you can learn a lot about managing money from him.

I just checked that one on Amazon. It seems to provoke some interesting comments, from those who think it contains some great information to those who say it is one of the worst books they have read. I may just give it a look though, thanks.

 

[DeadMoney]

the guy who wrote it is a jerk, and somewhat obnoxious, that said he is a great trader and and expert at promotion, and he did set up a hedge fund so he knows a lot about it.

some people get really hung up on the fact he is a jerk, so I can understand why they are not happy with him. but that really doesn't bother me much,
I know a bunch of people who are really outstanding at something and also have some big personality flaws, to me that does not change what they know.

 

[gedward3]

the guy who wrote it is a jerk, and somewhat obnoxious, that said he is a great trader and and expert at promotion, and he did set up a hedge fund so he knows a lot about it.

some people get really hung up on the fact he is a jerk, so I can understand why they are not happy with him. but that really doesn't bother me much,
I know a bunch of people who are really outstanding at something and also have some big personality flaws, to me that does not change what they know.

Try and watch some of the Wall Street Warriors Series 1 on Youtube as there
was some focus on Tim Sykes. Quite a wacky Jewish guy but seemed pretty
likeable even though a little bit mad.

FRom watching that it seems that every man and his dog sets up a hedge fund
to try and trade other peoples money.

GEd

 

[danielRay]

Very interesting contributions

 

[RealRaver]

I was speaking to another trader last year who has a substantial amount under management and he refuses a lot of trades that come up immediately before his reporting period ends just so that he can preserve his figures. Managing your own money you don't have that problem.

This point is very true. When you are tied to monthly performance you look at trades in a different light. Taking a trade you expect to payoff in three months time but will be a loss for the first two months is not always a viable option when you need to keep investors money in the fund.