Capital Available for Traders

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Quote from Pekelo:

Not true. You lose 2% and you are so fast back in the Combine, you don't even notice. You don't really get a 100K account, you are basicly playing with the allowed max. DD....

RAPA hasn't stated so far what would be the DD% where they would stop backing the trader and pull the funds. It would be interesting to know....

And they are similar models, they both help to meet talent with investors, that's about it. Also, you didn't address the either too big or too small profit share issue...

Now somebody above said why wouldn't a trader want a little extra money even if it is only 10%? Well, because beside scaling issues, the bigger account also affects the psyche. Thus the trader can be comfortable trading amount X, but not amount 2-3X. And if the bigger size has a negative effect on his results, that 10% extra might not make it worthy....
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No, the 2% drawdown is the drawdown allowed from the starting point. If you got a 50k and ran it up to 100k, they would let you draw all the way down to 48k before they put you back in the combine. That's a 52% drawdown! Yes, if you went live today and lost 2% they would stop you and send you back. With RAPA you really can't lose money. This goes for any money manager not just RAPA. Think about it. If an allocator really has several hundred RAPA funds to choose from and you are losing money, why not shift that capital over to a winner, I know I would.
 
My old firm tried a similar thing with a real 100 million $ fund, with major infrastructure and institutional level tools for the traders--- had 120 plus vetted traders thru the door, all with strong track records, ONLY ONE survived as a profit center for the fund---all the other ones, despite their earlier success failed miserably. Based on this experience, superstars in this game are few and far between-- and if they exist, 100k allocation would be laughed at.
 
Quote from mickson:

We are thrilled to introduce you to a soft launch of the RAPA Cap Intro™ web portal, the culmination of a decade long dream where we match emerging trading talent with investment capital. To assist our community with assessing trader’s talent we have developed a proprietary RAPA Score™ with our team of 3 Ph.D.’s whose expertise range across: trading, investments, economics, mathematics, computer science and psychology. Using our quantitative approach for calculating a traders risk adjusted returns we are able to publish a dynamic RAPA Leaderboard™ where the best traders are able to attract the attention of the RAPA community and raise capital from our existing investor base. In designing our scoring system we have studied some of the largest CTA and hedge fund databases and together with our behavioural finance background we have incorporated some psychological and statistical scoring metrics as part of our total RAPA Score™.

Members of the community will have access to a broad suite of analytical tools to measure their individual performance or consider their relative performance via the RAPA Leaderboard™. However, RAPA Cap Intro™, is far more than a profit and loss tool for traders. In collaboration with a number of peak performance psychologists and drawing on the team’s personal trading experience we have seamlessly integrated a “thought journal” & social media profiles with the trader’s Profit and Loss database, as represented by the RAPA Wall™ profile.

In conclusion we are traders and our principals are traders with a long track record of seeding emerging manager talent, one having gone on to manage more than a $1 billion. We are open to all types of strategies and asset classes. We have launched with Interactive Brokers compatibility and will look to support other platforms (e.g. MT4) in the next few months.

We welcome all comments and ideas.

Regards

Michael
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cool concept.. all the best.. the reward is finding undiscovered talent. The trick will be to keep that talent.
 
Quote from Maverick74:
... There are thousands upon thousands of money managers out there, some with outstanding pedigree and background...
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Quote from marketsurfer:
...120 plus vetted traders thru the door, all with strong track records, ONLY ONE survived as a profit center for the fund...
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This is a good example of two very different views of the same problem. For folks with the money, there is a shortage of talent. For folks with the talent, it's too hard to attract money.
 
Quote from rwk:

This is a good example of two very different views of the same problem. For folks with the money, there is a shortage of talent. For folks with the talent, it's too hard to attract money.
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It's a little more complicated then that. For folks with money, they are looking to make a trade. They want to buy into the best manager with the lowest cost. No different then buying a house. They are looking for value. Some of the best managers are not open to new investors and many that are are asking for too much either in terms of fees or lockups or both. In a perfect world they can find a manager with a long term track record (10 years plus) with low fees, no lockups and low drawdowns with top notch pedigree. But we don't live in that perfect world so they have to compromise.

My argument is, and I maybe I'm wrong, that going all the way to the bottom of the barrel is not something that is very attractive. And by that I mean investing with a retail piker with no assets, no track record, no reputation, etc. It's like the old adage, you need experience to get a job but every job wants a guy with experience.

Having said all that, I'm not down on this RAPA guy. I wish him well. I'm just saying this capital allocation to emerging manager model has been out there for years and years and years. It's not new. I really have not seen it work effectively yet. That's not to say it never will or it can't. The proof will be in the results.
 
Quote from Maverick74:

No, the 2% drawdown is the drawdown allowed from the starting point. If you got a 50k and ran it up to 100k, they would let you draw all the way down to 48k before they put you back in the combine. That's a 52% drawdown! X
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Well, good points, but:

1. There is still the daily loss limit and you can't keep hitting that forever. I think Mike said something about letting it hit 6 times or so. If you made it from 50K to 100K (daily loss limit is 2K) that would be 12% allowed DD, before you are cut.

2. Most likely a trader would get a DD much earlier than before making a 100% return. Also a trader would probably withdraw from the account monthly, thus resetting the account to a lower level where hitting the starting balance is easier...

3. Once you established the pillow, they are not going to let you go below the starting balance, so no extra 2% applies....

The bottom line is, it is very unlikely they would let you drain your profits back to the starting balance...
 
Quote from Pekelo:

Well, good points, but:

1. There is still the daily loss limit and you can't keep hitting that forever. I think Mike said something about letting it hit 6 times or so. If you made it from 50K to 100K (daily loss limit is 2K) that would be 12% allowed DD, before you are cut.

2. Most likely a trader would get a DD much earlier than before making a 100% return. Also a trader would probably withdraw from the account monthly, thus resetting the account to a lower level where hitting the starting balance is easier...

3. Once you established the pillow, they are not going to let you go below the starting balance, so no extra 2% applies....

The bottom line is, it is very unlikely they would let you drain your profits back to the starting balance...
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The problem with your views, Pittsburgh Pekelo, is that there are traders successfully trading within those parameters for Patak right now. How do you account for their success?

The difference between Patak and these guys is there is no carrot on a stick promising access to vast sums if successful. Patak is simply a trading job, not a speculative money management. Gig.
 
Quote from Pekelo:

Well, good points, but:

1. There is still the daily loss limit and you can't keep hitting that forever. I think Mike said something about letting it hit 6 times or so. If you made it from 50K to 100K (daily loss limit is 2K) that would be 12% allowed DD, before you are cut.

2. Most likely a trader would get a DD much earlier than before making a 100% return. Also a trader would probably withdraw from the account monthly, thus resetting the account to a lower level where hitting the starting balance is easier...

3. Once you established the pillow, they are not going to let you go below the starting balance, so no extra 2% applies....

The bottom line is, it is very unlikely they would let you drain your profits back to the starting balance...
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No, I "specifically" asked him this question and he stated the answer as clear as any answer he has given. I even told him it was a stupid idea and the better move would be to just pay out every month whether the trader wanted the money or not. But he said if you had 100k in your account on a 50k, they would let you lose 50k without saying anything. And you are also confusing the different variables. The daily drawdown and the account drawdown. The daily drawdown is the 2%. The account drawdown is 4% from the starting balance which Michael stated they would let you wipe out possibly up to 5 times. He also stated that once you hit your equity cushion, both those parameters are negotiable. And you could even start swing trading as well.

Anyway, I don't want to re-litigate TST over here since this is RAPA's thread. They are completely different models serving completely different markets.
 
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