That being the case, Xtrader59 how is your proposal better then that same trader taking the money in escrow and instead trading it directly for himself, thereby keeping 100% of the profits and not just a portion of it? The trader's risk is the same in both cases since he must make you whole in case of loss.
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I think of it as an insurance policy built on the trader's competence. You don't pay your car's whole price to the insurance company. Say the basic trader's reward is 30%. Then 80% reward for the total protection means earning 0,5% for each 1% of capital protection. A very expensive insurance policy. If the trader is very proficient with his technique and will not lose anything, maybe this could be a way to increase drastically his income.
But as pointed out he would probably prefer a bank loan (he will pay interest for the right to earn the whole 100% instead of 80% profit).
As a free contract I thought it should be attractive to a good trader, especially if he could have access to bigger capital than his own.
100% deposit, 100% protection, 80% reward, these are some possibilities. It may be e.g. 10% deposit, 30% protection, anything freely negotiable.
Everything is built on the traders competence and the ratio between % reward to % protection.
Though I understand no one here seem interested, with real consistent profitability I don't think this idea is a complete crap.
Focusing on the %reward/%protection, is the market so frightening that no one is able to offer any protection against it? So where is the consistent profitability? Is it once again a lucky string's illusion? Maybe the numbers of the market are so immense that it allows for 10 years profitability based on a lucky long term strategy that will be followed by 10 years of losses. So the insurance idea is a real madness...
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I think of it as an insurance policy built on the trader's competence. You don't pay your car's whole price to the insurance company. Say the basic trader's reward is 30%. Then 80% reward for the total protection means earning 0,5% for each 1% of capital protection. A very expensive insurance policy. If the trader is very proficient with his technique and will not lose anything, maybe this could be a way to increase drastically his income.
But as pointed out he would probably prefer a bank loan (he will pay interest for the right to earn the whole 100% instead of 80% profit).
As a free contract I thought it should be attractive to a good trader, especially if he could have access to bigger capital than his own.
100% deposit, 100% protection, 80% reward, these are some possibilities. It may be e.g. 10% deposit, 30% protection, anything freely negotiable.
Everything is built on the traders competence and the ratio between % reward to % protection.
Though I understand no one here seem interested, with real consistent profitability I don't think this idea is a complete crap.
Focusing on the %reward/%protection, is the market so frightening that no one is able to offer any protection against it? So where is the consistent profitability? Is it once again a lucky string's illusion? Maybe the numbers of the market are so immense that it allows for 10 years profitability based on a lucky long term strategy that will be followed by 10 years of losses. So the insurance idea is a real madness...
