Dispassionate
Member
- Messages
- 98
- Likes
- 1
"Easier" in this case also means being able to acheive better returns.
Which is easier? Trading your own capital or other peoples money?
- Thread starter Dispassionate
- Start date
- Watchers 1
TWI
Senior member
- Messages
- 2,559
- Likes
- 269
Making money is never easy but when you are making % on client funds it is very much like trading your own money as if you do not make a return you are soon out of business.
However , if pushed would say OPM is better mainly due to the capital available which allows for a greater degree of diversification and lower degree of leverage to obtain similar income.
However , if pushed would say OPM is better mainly due to the capital available which allows for a greater degree of diversification and lower degree of leverage to obtain similar income.
FWIW these are my experiences. At various stages I have traded with 1)my own money 2) friends money and (currently) 3) other people's money (with a bit of friends money in the pot).
Psychologically I think they are all quite different, and purley from my own perspective one is not necessarily "easier" than the other. At the time when using my own money I had less experience and I was underfunded, which created pressure to put food on the table, regularly ! Result = overtrading & too much risk = blown account. ! I found the friends money stage to be tricky, because despite having rigid trading rules, other emotions started to creep in at times of drawdown, and there's always the feeling that there might be something more "at stake" ie friendships, if things don't work out. Result = undertrading (fear), +ve but mediocre returns. By comparison I have found it much easier to impose dispassionate discipline when trading OPM, as otherwise I'd have some explaining to do, and I'm paid to do what I do. The results are just the results, win or lose, although obviously I hope to continue to win if I'm going to continue to get paid. The main thing is that I "do my job" and stick to my methods as agreed with the investors. Also this account is far larger than previous accounts, and expectations (of a % return) are really quite modest.
For me the latter approach has produced the best % results too, even though I am trading far more conservatively, so therein lies a story, maybe. Of course we are all different psychologically, so other people's experiences may be quite different.
rog1111
Psychologically I think they are all quite different, and purley from my own perspective one is not necessarily "easier" than the other. At the time when using my own money I had less experience and I was underfunded, which created pressure to put food on the table, regularly ! Result = overtrading & too much risk = blown account. ! I found the friends money stage to be tricky, because despite having rigid trading rules, other emotions started to creep in at times of drawdown, and there's always the feeling that there might be something more "at stake" ie friendships, if things don't work out. Result = undertrading (fear), +ve but mediocre returns. By comparison I have found it much easier to impose dispassionate discipline when trading OPM, as otherwise I'd have some explaining to do, and I'm paid to do what I do. The results are just the results, win or lose, although obviously I hope to continue to win if I'm going to continue to get paid. The main thing is that I "do my job" and stick to my methods as agreed with the investors. Also this account is far larger than previous accounts, and expectations (of a % return) are really quite modest.
For me the latter approach has produced the best % results too, even though I am trading far more conservatively, so therein lies a story, maybe. Of course we are all different psychologically, so other people's experiences may be quite different.
rog1111
donaldduke
Experienced member
- Messages
- 1,665
- Likes
- 260
Agree, Its easier to follow the rules when you trade other peoples money because thats whats expected of you.
Also you need to be careful of the people you manage money for, i do not currently manage anyones
money unless i personally know them. If in future i was managing money for say a friend of a friend i would
want to vet that person and get to know them before deciding if i want to do business with them.
Also you need to be careful of the people you manage money for, i do not currently manage anyones
money unless i personally know them. If in future i was managing money for say a friend of a friend i would
want to vet that person and get to know them before deciding if i want to do business with them.
Similar threads
