Raising Capital
- Thread starter Hawkeye Ron
- Start date
Before I could trade full time, I started with $5k and began with the spot fx market during the European session trading the dollar vs. the 4 majors. These markets(most times) begin to quiet down after 12pm NY time as price moves in a tight band. However, once Europe opens the banks/market makers put their positions on and some nice intraday moves can be found. Like most markets, you'll see 1-2 days each week were the thrust out of the intraday trading range will be well worth the wait. Again, most times this will happen at or shortly after the open which for Europe is 2-4am NY time. I just keep chipping away until I was adequately capitalized to trade full time. A word of caution, the fx market is the wild, wild west and price will turn on a dime so keep those stops tight and be aware of economic reports coming out in Europe(they'll help you or kill you). You could look to trading the dollar/yen or euro/yen during the Asian session if your not into staring at a screen at 2 in the morning. I chose spot fx over currency futures for the leverage, zero commission(some market makers will charge 2-3 PIP spread), and depth of the market. The cash market is the largest in the world. Good luck.
Start with a more realistic handle, you know, one that smacks of piracy, like Hawk Patch, or Peg Leg Trader. Just kidding...
A lot of guys started with winnings from their trading retail accounts. Others started with their family monies, although they'd never admit it. As some say: "they got it like that". Others went to prop shops in good times, didn't know they were lucky and caught a rising star.
So, under these conditions, your best chances might be in a few months, while you prove you can trade.
Go to www.marketocracy.com if you want to try managing a $1 million fund in a monitored competition where you can't cheat. You also get free automatic analysis of your fund like volatility, beta, alpha, r squared, etc.
it is a mutual fund, not a hedge fund, and only fully paid for long stock positions are allowed, and the fills are too slow to allow for daytrading. But, its FREE and it builds a legit track record and gives you a taste of competition.
it is a mutual fund, not a hedge fund, and only fully paid for long stock positions are allowed, and the fills are too slow to allow for daytrading. But, its FREE and it builds a legit track record and gives you a taste of competition.
I started out with 5k of my own and a 10k loan from my parents. A couple of months later my clearing firm went broke so I borrowed 10k from the bank and traded with that. My backup plan was to max out several credit cards. If you want it bad enough, then you will find a way.
If you don't want to borrow, then another possibility is to get a fellow trader to back you - preferably someone who knows you well. For example, I lent a bit of capital to two people, on the understanding that they put their own money on top and take all losses from that, then stopped if they draw down to the last couple of thousand. In return I got 50% until they quit and had enough to start out trading on their own. Both of them eventually quit (one after going from 5k to 100k, then back again), but I didn't lose a thing and still got interest on the capital.
A key bit of advice I would give is, before approaching anyone for money, imagine being in their shoes and having someone come up and say "hey buddy, can I have 10 grand of your money to trade with?" Wouldn't you just tell them to get lost? You need to be able to demonstrate credibility, that you at least have some chance of success. Offer to risk your own capital, and just use theirs to get the minimum necessary to open an account and avoid PDT or margin limitations.
Finally, if you love trading then in many ways it can be harder to raise sufficient capital than it is to actually learn how to trade. Just remember that it is infinitely harder to come back if you bust out. So just trade 1 lots or 1 share at a time until you have gotten consistently profitable. The goal in the beginning is not to make money (although that is nice if it happens), but rather to avoid tapping out before you have gained enough experience to learn how to trade.
If you don't want to borrow, then another possibility is to get a fellow trader to back you - preferably someone who knows you well. For example, I lent a bit of capital to two people, on the understanding that they put their own money on top and take all losses from that, then stopped if they draw down to the last couple of thousand. In return I got 50% until they quit and had enough to start out trading on their own. Both of them eventually quit (one after going from 5k to 100k, then back again), but I didn't lose a thing and still got interest on the capital.
A key bit of advice I would give is, before approaching anyone for money, imagine being in their shoes and having someone come up and say "hey buddy, can I have 10 grand of your money to trade with?" Wouldn't you just tell them to get lost? You need to be able to demonstrate credibility, that you at least have some chance of success. Offer to risk your own capital, and just use theirs to get the minimum necessary to open an account and avoid PDT or margin limitations.
Finally, if you love trading then in many ways it can be harder to raise sufficient capital than it is to actually learn how to trade. Just remember that it is infinitely harder to come back if you bust out. So just trade 1 lots or 1 share at a time until you have gotten consistently profitable. The goal in the beginning is not to make money (although that is nice if it happens), but rather to avoid tapping out before you have gained enough experience to learn how to trade.
Our company is a private investment firm in Miami, Florida. We work with institutional investors, such as pension funds, insurance companies, banks, brokerages, etc. I am in charge of evaluating different types of investment opportunities for our institutional clients.
I am a trader myself and I am the first to admit that I don't have enough of a track record yet in order to trade for institutions. If you know someone who is a serious trader with a track record of more than two years, please contact me directly. I am sorry, but I don't log on this board too often, so I would appreciate it if you could contact me via e-mail directly, if there is a need for a serious business talk. Thanks -- I.P.
I am a trader myself and I am the first to admit that I don't have enough of a track record yet in order to trade for institutions. If you know someone who is a serious trader with a track record of more than two years, please contact me directly. I am sorry, but I don't log on this board too often, so I would appreciate it if you could contact me via e-mail directly, if there is a need for a serious business talk. Thanks -- I.P.