Hiring a day trader

[Xela]

Yes, any skillset requires learning, but for some silly reason most enter the financial world thinking that they can somehow bypass the learning curve

I agree completely.

Most people venturing into trading are looking for short-cuts, which is never a recipe for success. There's this myth - to some extent perpetuated in forums - that "If I can just copy something that 'works', I can get rich fast without needing the education/experience stages".

(I don't disagree with anything else in your post either, to be honest, even if I don't express it as strongly as you do.)

 

[WildBill]

Day traders, I have recently been doing some research on day trading and wanted to try it out. However, quick question; how do one go about hiring a good day trader, in the hopes of splitting the returns?

Research and find yourself a good CTA/CPO and invest with them. The 2/20 split is a small price to pay for using someone that has:

A) An audited track record
B) Is regulated by the NFA

It is a better deal for you than finding and funding a trader, and then giving up a larger split of the profits.

You still need to review your statements every evening, or at the very least weekly, and keep on top of them.

As a side note, I am curious as to why so many people here are so opposed to the idea of managing OPM.

If you truly have excellent results without wild P&L swings there is little downside. If you have a background running businesses of your own it is even better. Errors and omissions insurance is relatively inexpensive. Dealing with the NFA is no picnic, but no worse the the normal bureaucratic BS you deal with as a business owner.

If you suck at marketing and only add 5 fund members a year, it is the equivalent increasing your trading/account size by 100% without the corresponding margin requirements. But the real reason is the accomplishment of returning performance in exchange for the investment the clients make with the fund.

 

[wrbtrader]

Reality, the average person is too busy paying bills instead of investing by themselves. In fact, those with decent jobs most likely are at a job that gives a "pension plan" or "profit sharing program"...that most likely is manage by a fund.

Seriously, if you know anyone that's a teacher, fireman, policemen, lawyer, grocery store employee, professional athlete, union worker, doctor, nurse, bus driver, uber driver, employee at Google, employee at the CME or whatever...

They have a pension plan and those pension plans are manage by funds and other investment vehicles.

Another reality, having a pension plan today is no guarantee the pension plan will be there tomorrow when you retire with all the news of corruption and companies raiding the pension plan coffers just to keep the business afloat or slashing your pension plan just before you retire.

The average person with a decent job are usually OK with knowing they have "something for later" when some of their money is automatically deducted out of each check for their pension plan to be managed by a fund.

Those that have money to do it by themselves...it usually should only be with money to burn.

 

[Handle123]

Day traders, I have recently been doing some research on day trading and wanted to try it out. However, quick question; how do one go about hiring a good day trader, in the hopes of splitting the returns?

Even if you were to pay me 90%, why would I give you a gift of 10%? Good day traders won't do this deal as I would just put on more contracts than fiddle with small public. So you going to end up with traders who are still learning and still have a great deal more to learn, otherwise they be trading good size, and those who will say they can handle more for others, then you have to ask why not put on most in their own accounts?

It is like going to a surgeon who has his own business going strong, and asking him to work for you for part of his earnings, don't make any sense to me. And any time dealing with public in managing money or having to see them in person, rather have fingernails removed. Like my privacy much.

 

[i am nobody]

The trade could be 1 to 5 minutes, not hours. The longer you are in the market, the longer your money (profit) is at risk. Unless you lock in profit by moving your stop, or having a trailing stop, then you must accept the fact that your profits can disappear in the blink of an eye.

I have a system that I try to following for 100%. I made simulations where I did not follow the rules but tried to lower the risk or take bigger profits. EVERY SINGLE scenario that I tested gave less profits and I never lost profits in a blink of an eye. I speak about a few years of trading data and over 1000 trades. So my REAL results proof that your statement is wrong (till now). If I would have done what you suggest, I would probably have missed 75% of all my profits over the years. Because I am always in the direction of the trend and some of my biggest profits come in "a blink of an eye" as the market explodes in the direction of the trend.

Of course everything depends on your system. So each trader should do his own home work.

 

[J_Smith]

I have a system that I try to following for 100%. I made simulations where I did not follow the rules but tried to lower the risk or take bigger profits. EVERY SINGLE scenario that I tested gave less profits and I never lost profits in a blink of an eye. I speak about a few years of trading data and over 1000 trades. So my REAL results proof that your statement is wrong (till now). If I would have done what you suggest, I would probably have missed 75% of all my profits over the years. Because I am always in the direction of the trend and some of my biggest profits come in "a blink of an eye" as the market explodes in the direction of the trend.

Of course everything depends on your system. So each trader should do his own home work.

It is all relative!

If you went long ES on close other night, the gap down would surely have seen your profits disappear in the blink of an eye.

I done a few trades on ES on Fri, was waiting for the bust up, had my take profit order in and my mouse on the " up one tick" button in booktrader. Then, I had to go for a piss. I was in 2 minds to remove or shift up my take profit limit order, but was really bursting, so said fuk it, I have to go!

What you think happened next!

J_S

 

[J_Smith]

I agree completely.

Most people venturing into trading are looking for short-cuts, which is never a recipe for success. There's this myth - to some extent perpetuated in forums - that "If I can just copy something that 'works', I can get rich fast without needing the education/experience stages".

(I don't disagree with anything else in your post either, to be honest, even if I don't express it as strongly as you do.)

Well XA, I find it very easy when it comes to speaking the truth

Truth is a 5 year old can make money trading, even a chap talking about showing his 5 year old son in other forum!

It is not the approach that is the main problem, it is the fool staring at the screen, noting the lovely colors and exquisite formations, when, at the same time ES is setting up to have sex with one of it's prostitutes, probably DB today, as DT is a bit wore out from all the screwing around

But, the big pimp, called SPX, has sent out a bus load of whores in the past few weeks, and all the sex craving juveniles are still sitting there with their lad in their hands, waiting for the nicest whore to get off the next bus stop, which she of course will never do, as she is heading for the big fat arse lazy bastards lounge, where she will have many real paying options to choose from!

J_S

 

[i am nobody]

It is all relative!

If you went long ES on close other night, the gap down would surely have seen your profits disappear in the blink of an eye.

I done a few trades on ES on Fri, was waiting for the bust up, had my take profit order in and my mouse on the " up one tick" button in booktrader. Then, I had to go for a piss. I was in 2 minds to remove or shift up my take profit limit order, but was really bursting, so said fuk it, I have to go!

What you think happened next!

J_S

I am trading since 1995 the ES, have to eat, go to toilet... but I never have the problem you have.
But I wiped out once while I was sitting in front of my screen!

From what I understand you placed a take profit, which was touched and you missed the rest of the move? That's exactly what my points was. You wanted to limit risk but in reality you limited potential profit. Your system should have told you the trend was still strong enough to stay long. So the risk is in your system, not in the market.
Limiting risk is different for each system and depends on the statistics of your system. There is no general rule, the rule depends on the behavior of your system: how many profitable trades, drawdown, how quick it gets out or reverses if necessary...
So risk is not linked 1:1 with time. A bad system is risky from the first second you open a position. A good system has not that problem.

I NEVER put take profits, I just follow the system. What can happen is that I put a stop at my entry once I'm a few points in profit. Just in case, but my stops are never touched.

 

[J_Smith]

I am trading since 1995 the ES, have to eat, go to toilet... but I never have the problem you have.
But I wiped out once while I was sitting in front of my screen!

From what I understand you placed a take profit, which was touched and you missed the rest of the move? That's exactly what my points was. You wanted to limit risk but in reality you limited potential profit. Your system should have told you the trend was still strong enough to stay long. So the risk is in your system, not in the market.
Limiting risk is different for each system and depends on the statistics of your system. There is no general rule, the rule depends on the behavior of your system: how many profitable trades, drawdown, how quick it gets out or reverses if necessary...
So risk is not linked 1:1 with time. A bad system is risky from the first second you open a position. A good system has not that problem.

I NEVER put take profits, I just follow the system. What can happen is that I put a stop at my entry once I'm a few points in profit. Just in case, but my stops are never touched.

Your stops are never touched, now, that makes you the only trader who can achieve this.

I suppose the only way to prove it is to show some trades!

I will post the few trades I done on Fri later on, and show you what happened me when I went for a piss.

How about you, are you willing to divulge some of your never losing trades?

It just so happens the few I done were all winners on Fri, but that is not always the case, and it usually happens when I get too lazy to do some work the night before and map out what the odds will probably be for tomorrow.

Oh, and yes, I don't have a system as such, as it depends entirely on what turns up when I decide to get off my lazy arse and do some work. Can I automate it, nah, too many variables, and no PC out there can compare to what the eyes can see in a very short time, well, it all depends on the brain behind those eyes I suppose, and how it works!

J_S

 

[i am nobody]

As a side note, I am curious as to why so many people here are so opposed to the idea of managing OPM.

If you truly have excellent results without wild P&L swings there is little downside. If you have a background running businesses of your own it is even better. Errors and omissions insurance is relatively inexpensive. Dealing with the NFA is no picnic, but no worse the the normal bureaucratic BS you deal with as a business owner.

I was not opposed to it till I started a fund.

1. Build a trading system.
2. Build a track record.
3. Find a sponsor who can let you do the necesarry SERIES XXX tests. I was lucky because I received this proposition from a brokerage firmbased on my trackrecord with them. Had even no clue what I had to do for becoming a CTA.
4. Pass these tests.
5. Making a disclosure document, send it for approval (to NFA I think, it is already long time ago so I forgot) and receive it back with 100 remarks. Ask them why they have 100 remarks while the IDENTICAL clauses where in the disclocure document of COLORADO COMMODITIES as I copied them from there.
6. Cost of all this procedures (lawyers...).
7. Clients calling you even several times a day.
8. Clients that you don't hear if performance is very good, but that start to stalk you when you have a negative week.

Then I realized that if I could make some money in commissions I could throw out everybody and only trade my own money.
No administration, no NFA, no CFTC, no nagging clients. Complete freedom! Worth more than making more millions, that I even didn't needed to live good. So I said to the NFA f**k you, opened fund for non-Americans, and as I am not American too the problem was solved. After about one year I closed it and traded the received commission for myself.

I made three decisions in my life that I never regretted:

1. starting to trade
2. closing my fund after one year