raising funds

[traderwann]

Quote from heech:
The answer makes perfect sense, you just don't like it.
You might believe that "in 36 months of live trading you wouldn't need any further funds" and therefore waiting that long is "irrelevant", and you might even be ultimately right about your "talent"... but no one living outside of your skull is going to take your word on that. Period.

If it makes sense please explain. I can just contradict too and say "no it doesn't" and claim you don't like it, we can go back and forth. My reasoning, the part you didn't quote, was an either or situation. Either it works and I don't need funds or it doesn't work. Now I assumed an extreme in both situations. So being more objective now, yes, with $100k and getting 10% - 20% per year is different, but this brings us to the unanswered part of how to find that original $100k or so? No one has answered that yet.

Two months of double-digit returns is completely unconvincing to me. 12 months of double-digit returns (er, triple digit compounded at that point) is still completely unconvincing to me. So, go trade 36 months

Ok so how do I do this live with about $100k, the unanswered question that came about after the first few replies in this thread?

 

[heech]

Win the lottery? Find a rich uncle? Work really hard at a day job and save up? Be like neke (circa 2006-2009)?

I get the feeling you think this is some how unfair. Well, no one I know passes out $100k like it's candy. The answer everyone is giving you, which you dont like, is that you simply do not raise your first $100k off of 2 months of hypothetical results.

If you want a legitimate roadmap, heres my answer: go work (flipping burgers if you must) until you have $20k in the bank. Trade that in a dedicated account for 3-4 years, track daily/weekly returns over that time period, and then pray you meet the right gambler at the right time. Or just go trade prop with your $20k, make your 30% a month (after leverage)... And in a few years, remember to send us pictures of you with your yacht.

 

[syrre]

lol - no 'strategy' generate gains of '6% - 15% per month'.
if you said per year i would take you much more serious.

 

[traderwann]

Quote from heech:
The answer everyone is giving you, which you dont like, is that you simply do not raise your first $100k off of 2 months of hypothetical results.

I don't recall that being said specifically before. What can you raise from hypothetical results then in your opinion? $1k? $30k?

If you want a legitimate roadmap, heres my answer: go work (flipping burgers if you must) until you have $20k in the bank. Trade that in a dedicated account for 3-4 years, track daily/weekly returns over that time period, and then pray you meet the right gambler at the right time. Or just go trade prop with your $20k, make your 30% a month (after leverage)... And in a few years, remember to send us pictures of you with your yacht.

Thank for giving an answer, although I was able to come up with those myself. Let me share one of the reasons I can't see $20k bet / $100k pool being anywhere close to the risk level it is being given here.

I recently came across a story of someone with little experience but who could talk a good talk. First time creating any mechanical strategies ever. Had some good results but never tested live. There was IMMEDIATE interest based SOLELY on the projected returns. Something like 10% for a month and if it works ramp it up. One person who listened to the pitch was a small fund manager. Nothing major has happened since, but the point is things moved forward, legal talks started, all that boring stuff, so of course it may not work out still. That is irrelevant to the point. The interest to move forward was the point. This is real, actually happened. That certainly contrasts with what's been said so far. Main difference is mechanical vs discretionary.

 

[traderwann]

Quote from syrre:

lol - no 'strategy' generate gains of '6% - 15% per month'.
if you said per year i would take you much more serious.

Yes there are some top traders that generate that much, monthly and annualized. I recently spoke to a sales guy (wasn't a sales call, total coincidence) from some fund or something who was telling me about a trader that made 300% or something like that last year. I have no idea of the year over year return, I can only state what is here so far. I can't do the impossible, wish I could sometimes.

 

[syrre]

6-15 means 2-500 annual, if you did that you would be one of the the richest guys around in few years.
I think your best chance to attract some kind of funding is to lower those numbers drastically

 

[heech]

Quote from traderwann:

I recently came across a story of someone with little experience but who could talk a good talk. First time creating any mechanical strategies ever. Had some good results but never tested live. There was IMMEDIATE interest based SOLELY on the projected returns. Something like 10% for a month and if it works ramp it up.

Is this the source of your confusion? You think this person, whoever he is, is being funded because he "projected something like 10% for a month"?

I can guarantee you no remotely sophisticated investor will EVER select an investment believing a projection of "10% a month". However, the amazing thing about mechanical strategies is that they CAN to, some degree, be back-tested using historical data. All of a sudden, you end up with something that at least resembles 3-5 years of historical performance data... That's something you assert you can't do. The difference between your situation and his situation is truly night and day.

And even then, before any remotely sophisticated investor signs on the dotted line, they will be digging through the mechanical strategy with a fine-tooth comb (a lot of the question Martingoul submitted early on): how was back-testing conducted, how does the strategy actually work, risk management, slippage / transaction-cost assumptions, performance persistence (in different market conditions), manager pedigree (does he have academic credentials in the hard sciences) etc.

And when you keep talking about 200-300% annual returns (or 6-15% monthly) being remotely possible, you're really just showing lack of maturity in this industry, which any sophisticated investor will immediately pickup as a huge red flag. It's as if my doctor promised me he could cure cancer by sacrificing farm animals... I would label him a quack and move on. I could care less about hearing more about his "talents".

 

[FrankSlaughtery]

in the interest of anyone who clicks on this thread, can we please wrap it up with the following summary:

if you're making high absolute returns everyone else can f*ck off there is no need for investors

if you're making lower returns and need investors, you need to cater to their wants such as looking at the backtests results in detail as other posters said.

no one will give you a penny based on a few months hypothetical performance. the poster who said you should save up money and trade for 3 years was dead on.

promising high absolute returns to investors, esp based on small sample size, is asking to get laughed out of the room and not get your parking validated. they will immediately say to you "if you're making such high absolute returns why do you need my money?"

 

[Martinghoul]

Quote from traderwann:
I recently came across a story of someone with little experience but who could talk a good talk. First time creating any mechanical strategies ever. Had some good results but never tested live. There was IMMEDIATE interest based SOLELY on the projected returns. Something like 10% for a month and if it works ramp it up. One person who listened to the pitch was a small fund manager. Nothing major has happened since, but the point is things moved forward, legal talks started, all that boring stuff, so of course it may not work out still. That is irrelevant to the point. The interest to move forward was the point. This is real, actually happened. That certainly contrasts with what's been said so far. Main difference is mechanical vs discretionary.

The keyword here, traderwann, is that this is a "story"...

I agree with pretty much everything that heech has said. Like heech, for purposes of this thread, I fall into a category of people that could, in theory, be a potential investor. But, as I keep trying to tell you, I wouldn't touch anything like what you describe with a 10ft bargepole. And, please, don't take it personally, as it's got nothing to do with you. You appear to be a smart and capable guy, but, believe you me, that means next to nothing in the mkt. So, again, I wish you the best of luck.

 

[Swan Noir]

If you really believe in your system you need to leverage the trust that friends and family already have in you. The other posters are correct when they say no one with sophistication will back you. Take another six months at least and see if you can continue to produce those returns with acceptable risk. If so get backed by those who already have respect for your character and ability.

All of that said, you must understand that your bet is much larger than theirs. Most of these systems blow up at some point and those nearest and dearest to you will, in that circumstance, take losses. And if they take those losses you will then get to see their character. Have the rope, a chair and a sturdy place to rig from because once you lose even a small amount of their cash most people will simply aggravate you to the point where suicide is preferable to hearing a snide remark even one more time.

REALITY 101 ...