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I would ask, why do you only add once? I'm not suggesting that it is wrong to only add once. I'm just wondering, what is the basis for that rule? They way you are throwing it out there sounds like it was just some arbitrary rule that you came up with to limit losses. As opposed to an...

No, that assumption isn't automatically correct. The trading criteria is broken in your example in that the successful trades only match a particular market condition. If you go from consistent winners to consistent losers under the same criteria, it means that you don't really have an edge...

You're right. Sometimes I go brain dead for a minute.

ES is a much less expensive way to trade S&P500 price action than SPY. You have to trade 10X the number shares in SPY to equal 1 contract of ES. ES trades overnight. More flexible leverage. In favor of SPY... The only reasons anyone trades SPY are; 1) 0.01 spreads 2) not...

I'm not a lawyer either. You might be right that the LP definition is simpler in certain aspects. But the LLC rights should be well defined. I know that LLCs are becoming increasingly popular vehicles for funds outside of TX, FL, and CA where LLCs don't qualify for 'passive income' tax...

Personally, nobody has ever convinced me on a good reason to do an LP instead of an LLC anyway. It used to be that all funds were LPs and now many are LLCs.

Re: #2... What I'm saying is that there really doesn't need to be a "conversion" at any time. If you setup the two additional entities now, then you are all set. Here's what it really comes down to. When you start to solicit clients for the pool, you'll need performance history. If you...

Yea, I guess maybe I didn't make that clear. I wasn't suggesting that his current RIA be the SMA Advisor. Typically the two are separate entities. That's why I said, setup the Advisor (LLC) and also a second entity (LP or LLC). Both are separate from the current RIA. But that doesn't change...

Yeah, the biggest costs for the pooled structure are audits and admin. Both of which are mostly unnecessary under an SMA structure.

This is just my opinion, and others like Heech are proving that it can be done, but I don't see running a pooled fund with less than $20MM as a viable option. It can be done if performance is >30% annual, but a solid business plan should be based on something a bit more easily attained...

It should be noted that an "incubator" fund isn't anything special. In reality it is just a product that was invented to sell accounting and legal services to a niche demographic. The idea behind the incubator fund is that you form the legal entity, but remain exempt from registration...

Highly illegal

Yep, it's VXN. If you trade more than 1 contract, you'll be the entire daily volume.

There should be a statement in the disclosure document something to the effect of, "Mr. Schmoe, the Advisor's principal, does have a personal trading account. In the future, this personal account may or may not follow the same trading program being offered in the Disclosure Document. Mr...

Just one thing to add to Heech's comments on personal account performance. If you use ANY proprietary (or hypothetical) performance capsules you must include ALL proprietary accounts within the last 5 years. So if a manager was trading 5 different accounts and choosing to present only the good...

Yes, the very definition of a Martingale is that each bet will only recover carried losses, plus the amount of the original bet. So each bet has an exponentially worse risk profile. By step 10 you are risking $1023 to make $1 with a 50:50 probability.

I estimate mine currently at about $200-400MM with potential for decent return. Higher than that would require expansion into other markets and asset classes.

I should clarify my statement also. The word 'Martingale' gets thrown around as a title for any type of scaling system. That is horribly inaccurate. Martingale is a very specific betting system in which bet size is doubled with each loss. The idea relies on an unlimited bankroll. It...

It's all a question of being able to quantify an edge. If you can't define an edge, then who cares? But if you can, then you must be able to quantify the variables that give you that edge. If the edge relies on being able to pick absolute tops and bottoms, then the equity curve is gonna be...

Not true at all. There are tons of real traders who scale (average down), knowing that it is pointless for them to attempt to pick absolute tops and bottoms. Iow, they begin taking a position as soon as their model tells them they have an edge. The difference is that they don't take a full...