Trader wanted

[glennbo]

Many thanks for the replies to date. I am slowly but surely making my way through them and have emailed and spoken to numerous people thus far.

Just to confirm, we are still open for applicant enquiries until Friday 19th June - so if you believe that an additional £100K GBP/ $160k USD on top of your current earnings is attractive, please contact me.

I am particularly interested in UK based applicants.

Best wishes,

Glenn

[email protected]

 

[SSINGH]

Glen, Why dont you consider focussing on slightly fresher talent.

Guys and Gals that have made it in this business will not be motivated by 100k / pa.

If you were to supply funds of say 10k to a fresher talent...limiting their risk per trade to an absolute max of 5% and then see how they go....give them a 50/50 split on profit generated. I would also add that they don't get paid unless their capital account balance exceeds the start capital sum of 10k.

I'm sure this will give you ample room to establish who's got it and who simply hasn't without destroying a few million pounds in the process.....trust me...this business is very dangerous.

The reason why I say this is because, there are great traders out there, but they do not have the excess funds to really exploit their developed talents...they have taken risk with their own money and lost it during developing their skills in trading by over leaveraging and now are really wasting their time with peanuts stakes, frustrated by the uphill battle to build up capital.....I think this is where you'll find an excellent niche.....as long as you build a programme to establish solid control.

If you could be the risk manager/ controller...and then let them go ahead and do what they are good at....It would be better to have 10 traders working 100k, rather that 1 trader that could blow 100k in 2-3 trades if he's or she having a bad day...

So...where & how did these traders that I think you should be targeting fail....they failed to control their underlying risk capital.....how did this happen?..they hit clusters of bad trades...leading to them chasing, probably through doubling up stakes to get their own money back since the money being traded was money that they could afford to lose....basically emotion took over...desperation for survival takes over...and now thier not trading what they see....their actually trading what they want to see....this is where they blow up their account as they soon realise that markets move further than one expects.

So there you have it....an external capital risk manager / monitor to tame and nurture fresh talent is what I think you should consider. Working with / controlling an established trader will be a nightmare as the trader will always know best even though he / she could be costing you millions through bad trades.

Then again...you may find a diamond experienced trade....but he/she will certainly get the lions share of the profits while you're risking all the cash! plus diamonds are rare!

Anyway...good luck with you're endeavors....Sean

 

[SSINGH]

oh...I forgot to mention that it might be wise to only allow the trader to trade 1 instrument only....until atleast they show their real colours!

 

[glennbo]

Thank you Sean - an excellent idea. I'm not sure about a 5% risk per trade though. 6 losses = 30% drawdown.

We currently have 4 experienced traders on board and we have more meetings scheduled over the next couple of weeks.

However, if you are lean and keen I'm happy to put this project into action.

 

[jackolan]

I'm not sure about a 5% risk per trade though. 6 losses = 30% drawdown.

You want 40% a month and don't want to risk a 30% drawdown?

I think you don't understand what spreadbetting is.

Here is the important lesson: You can lose MORE than your "investment" when spreadbetting because it is a geared product. (20x more if using FTSE100, 3000x more if talking about Forex)

 

[SSINGH]

Thank you Sean - an excellent idea. I'm not sure about a 5% risk per trade though. 6 losses = 30% drawdown.

We currently have 4 experienced traders on board and we have more meetings scheduled over the next couple of weeks.

However, if you are lean and keen I'm happy to put this project into action.

Appreciate you liking the idea....in reference to the 5%...this was an absolute 5% max. You will need to give some responsibility to the trader, and they will need to demonstrate responsibility in how they they deploy the risk capital, not only in which instrument but in what dosage. It will give you an idea of whom you think you can keep on, and whom you can extend more funds to, and whom will need to remain at the entry £10k capital base.

Losing 6 trades in a row is really bad but should be expected, but it would be better to blow 3k rather than 30k, plus statistically, if you take on 10 traders, with 10k a piece to play with and 5 are successful and 5 lose the entire max of 30%, i believe that you will still be profitable overall at that point in time, and by then you should be able to adjust your capital deployment ratios amongst the 10 traders, rewarding those that appear to understand risk management of limited funds and those that just want to have laugh destroying your wealth.

I think the key objective for you as an investor should be always to protect and control your wealth...in this game thats how it works...if you can do this you should sail through....thats unless you end up recruiting 10 dummies which is again plausible.

With the utmost respect, since you are from outside this industry and I can only speculate that you have little trading experience yourself, I do suggest that you take applicants trading statements with a pinch of salt as they can easily be falsified and if true statements are presented you will need to examine the frequency of trading, question why any particular trade was taken. .... I think it maybe wise to really interrogate the character of your applicants as this will shine through in their trading style as this is a game of understanding mass pscycology.

They say that 90 percent lose....well if thats the case....one should pass up on 9 out of 10 opportunites....This has infact triggered one of my own trading moto's....

'I pass on 9 out of 10 trades'...I don't mind missing out on profitable opportunites, I do mind losing money....this comes from life experience in general & maturity on a personal level.

I'm actually alarmed that you have taken on 4 traders already....pretty quick Glenn, there is an endless supply of traders / wannabe out there that need funding so that they can practice their skills with your dosh, you gotta be very very very selective other wise you're likely to get burned.

All I can do is wish you good luck and warn you to be cautious.

 

[zozo]

Making returns of 20% to 40% a month is rather difficult. You should look at it on a quarterly basis or yearly basis. So say after 1 year you would like to see a return of 200% yearly but with consistant performance every three months.

Its all about compounding.

 

[arabianights]

Why don't you join former member here Wasp's "hedge fund", returning 20% every week with no voltaility or anything. It's definitely not a scam, I just claim it is because I was annoyed I pulled my investment out, not because of the £20k (and more to come!) being stolen from single mothers and the like, honest...

 

[nicesurf]

You give money to other people, you risk youe self.

 

[glennbo]

Thanks Sean, Arabian and Nice Surf for the ongoing advice.

I certainly agree that you should be extremely wary of transferring money to others. That is a recipe for disaster.

Our model is based upon placing funds in our own broker accounts and then giving traders a limited power of attorney to use the account.

So the risk is a dud trader that blows the account, however, that is controlled to the extent that we can monitor trading activity, position sizing etc.

I agree that we may have to go threw a number of enquiries to get the gems. However, our plan again is to test and measure on modest pilot accounts (with real funds) and then scale up once we have condidence in the trader and system.

We are now up to 6 traders so we are coming along very nicely, but we are always happy to here from more, so if you have what it takes!!!, please email me for an information pack;

[email protected]

 

[meanreversion]

Sorry am I missing something here. Who on earth is returning anything close to 40 pct a month consistently? To generate those kind of numbers, you would need to risk 5-10 pct or more per trade. Read "Market Wizards" and you will see that 1-2 pct is the generally accepted maximum risk per trade. Perhaps someone has already pointed this out, in which case apologies for the repetition. George Soros' career average is 30 pct a year and he is considered to be quite good (I believe).

 

[Vaco]

Sorry am I missing something here. Who on earth is returning anything close to 40 pct a month consistently? To generate those kind of numbers, you would need to risk 5-10 pct or more per trade. Read "Market Wizards" and you will see that 1-2 pct is the generally accepted maximum risk per trade. Perhaps someone has already pointed this out, in which case apologies for the repetition. George Soros' career average is 30 pct a year and he is considered to be quite good (I believe).

Surely it depends on the no of trades you place per day, even at 2% risk 1 trade per day and a r:r of 2:1 you would expect to 20% a month on average.

The reason the names you mention are making a lower % return is because of the size that they are trading. 30% of an account that runs into millions is huge.

 

[meanreversion]

Clearly hedge funds aren't in the business of scalping 5 to 10 pips in FX to generate their returns, and their size precludes them from making outsize returns. However the system you suggest has a win:loss ratio of 50:50 with winners making twice as much as losers - I'd love to see a system like that as it sounds like free money (i.e. it doesn't exist). It's dangerous to suggest 20 pct a month can be achieved because this is simply not realistic. I am sure some traders can do this, but they are probably 0.01 pct of the total. Far better to target something achievable, like 2-4 pct a month, than to go for a silly number and wipe out the account.

 

[Vaco]

i'm not suggesting increasing risk in order to hit the figure, most profitable trader have a hit rate around 40% imho the R:R will vary as you get out when the trade starts to wobble, some will fly off for a really good r:r some won't.

if your ave 1.5:1 at 40% win rate with a 2% risk per trade then you are breaking even. show me how you intend to make money without either increasing your hit rate or your r:r?

 

[meanreversion]

I think the key is the old line about running profits and cutting losses. Assuming win:loss of 40:60 (which sounds realistic), "all" that you need to do is run the winners a bit longer and aim for 2.5:1 (easier said than done). With these numbers, the expectancy is 0.4R per trade, so if you risk 0.5 pct per trade and do 20 trades a month, that returns (on average) 4 pct, which is very acceptable. Also, drawdowns will be kept to an acceptable level - you are very unlikely to get wiped out.

 

[meanreversion]

Also, you can invest some of the capital you aren't using in a tax efficient low risk vehicle, e.g. Premium Bonds. Although these help fund our Governments profligate spending plans, they do offer up the chance for a nice win once in a while.

 

[Vaco]

I think the key is the old line about running profits and cutting losses. Assuming win:loss of 40:60 (which sounds realistic), "all" that you need to do is run the winners a bit longer and aim for 2.5:1 (easier said than done). With these numbers, the expectancy is 0.4R per trade, so if you risk 0.5 pct per trade and do 20 trades a month, that returns (on average) 4 pct, which is very acceptable. Also, drawdowns will be kept to an acceptable level - you are very unlikely to get wiped out.

yes and at 2% risk per trade thats 16% a month so not far off huh

 

[meanreversion]

I think 2 pct a trade is too high and will lead to drawdowns which the vast majority of traders could not tolerate. For example, 10 losses in a row means 20 pct of capital wiped out, at which point the strategy is questioned, random trades to "make the money back" are taken, etc. Just my opinion based on experience and what I've seen people do...!

 

[everyonerich]

contact me, i can make more than 20% per month. but starting capital must more than 8 digit.. lol :whistling

 

[BSD]

Glen, the only way you will find real talent and a real pro is by offering them a share of the profits.

That's how all hedge funds work (usually 20% but some charge 50% like Steve Cohen), that's how the prop trading firms work, and that's also logically the only thing that makes sense if one does the compounding calculations of income potential for a trader generating returns in the teens monthly.

Best of luck tho.