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For those of you who are CTAs/Fund managers or are other informed parties, how do you avoid 'hot money' investors i.e. investors who trade around funds: some try and buy into drawdowns and sell at new peaks as if the fund/CTA were a stock they were swing trading, others bail/redeem during the...

This would work for a fundamental or value tarder. Is that your style - P2? But it wouldn't work with a systematic/quant guy? But still, all this while good, only satisfies the subjective half of the equation and not the objective half of the equation.

Do you have the formula for this? Please share more info on this with us.

Another twist on your quetsion... Trader/Fund No.1 - Up 1-3% most months, a few down months- none down more than 3% (so far) Trader/Fund No. 2 - Up 5% - 15% some months and down as much as 10% some months Who is the "better" trader? Who would you invest in? Which trader seems to have...

Talking to the guy , "getting into his head" and seeing if the strategy makes 'sense' may be a good first step... but there should be other objective measures. Furthermore, how do you compare 2-3 guys/gals who've you spoken to, whose strategies all make 'sense', if you have only subjective...

Any more thoughts on this folks?

Dr. Z, What do you consider the most important characteristic(s)to consider in reviewing a track record (including the sharpe ratio)?

P2 & Dr. Z - So who would you invest with in the above example?

Specifically, is a high sharpe ratio a good thing, is it necessarily indicative of a superior strategy?

Peter I think you were a little too witty for me.. I don't quite understand your point ... care to break it down a little bit more

I am curious how many traders here track their daily/monthly sharpe ratios? What are people's thoughts on hedge funds, CTAs or traders with high sharpe ratios. Thanks.

Rethink your statement and tell me if it still sounds logical. By your reasoning all the great funds with 2, 3 5+ track records should NOT have ever had any investors becuse they too at one point had a limited or non-existent track record.

Why not?

Thanks Banjo for posting this!

ETs, It seems that despite all the renewed emphasis on due-diligence vis-a-viz thoroughly understanding a manager's trading style/strategy and risk management, that investors ultimately base their investment decision solely on most recent historical performance. By extension, it seems that...

Friends, let's please regain our focus on the initial question posed in this thread. Many Thanks.

The comment was not directed at anyone... I was just thinking aloud. I know there is a lot of bashing and petty fighting on this site, but I don't engage in that. Let's just spread ideas, teach one another, and learn from one another.

I've traded both forex futures and spot futures (via online brokers) and I've noticed that the slippage is actually higher in the spot market than the futures market. By slippage I mean, orders that would be filled say via limit orders in the forex futures mkt don't get filled in the spot forex...

If you are a dollar bull, this can't be positive, an intervention and yet not much.....

Yes they are still sharply up, but also SHARLPY OFF their highs. Have you looked at an intra-day chart? While you are at it, look at a chart of the Yen