raising funds

Quote from Martinghoul:

Well, you used the term "story", not I. I didn't realize from your description that it's something that actually happened. Moreover, even if it did, in fact, happen, it doesn't really mean anything, other than the existence of random dumb luck, i.e. a matter of a lottery ticket that I have alluded to a number of times.

Dude, you have seen many different people give you a whole bunch of answers. Different "solutions" have been offered. None of them seem to be to your liking. Nobody is trying to shut you down, you have to stop thinking like this. What you're being told is a reflection of reality as people have experienced it. That you don't like it and find it too negative is neither here nor there.
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Martin you are being so defense instead of just admitting you are wrong. That's not usually expected from a trader. Anyhow. Yes I used the word "story". SO WHAT? That was followed by the words "this is real, this actually happened." You are trying to blame me for using a word instead of accepting responsibility for not reading and making a mistake. That's the reality. If it doesn't matter why even say it's a story in the first place? Seems like you really want to say anything to deny it rather than accept that it happened, and may not be a lottery ticket. I don't know if it is or isn't, you seem way too sure. When presented with evidence, you dismiss it.

As for "solutions" you are taking that word waaaay out of context. Your comments are inaccurate because it appears once again you haven't really read or followed along. Your pulling the nonsensical "to your liking" BS again. I've already addressed that specifically, I can copy and paste if you like. Do you want me to or are you not really here to actually address any actual points I make, resulting in unproductive conversation? Sorry to be blunt, but don't shoot the messenger. You doing what you are here (ignoring, avoiding, etc) is part of what I mean by shut me down. Either it is happening or it is not. Deal with the facts, nothing do to with "thinking this way." The last sentence is really really strange. Let's see, tell that same thing to a slave a few hundred years ago and see how people react today? Tell that to anyone who's ever made a historical change for good (in hindsight) against either majority or significant minority opposition. CHANGING THE STATUS QUO FOR THE BETTER IS NOT NEGATIVE AND IS VERY MUCH HERE THERE NOW AND EVERYWHERE. Completely void of any intellectually and emotionally competence is that statement. Don't shoot the messenger and good luck arguing otherwise. I suggest it is easier to just admit one is wrong when presented with the evidence.
 
Ultimately raising small $$ is more of a pain than it is worth. These numbers show why.

Quote from heech:

You know, after having done this for a few years... the other question is, why does anyone ever *want* to raise $100k?

Let's assume you meet the right combination of rich/dumb, and bring in a check for $100k. If you do the math, assuming 2/20 and "reasonable" (somewhat sustainable) returns of 25% a year... you're going to make $7k a year off of that $100k you manage to raise. (And that's ignoring the audit/tax/admin expenses you will subsequently have to pay for.)

I mean... really? All that work and ass-kissing and hand-holding for an extra $5k a year? Unless you're raising $5 million at a time, IMO, it's all pretty pointless.
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Quote from heech:
Some day, perhaps years from now, you'll be self-aware enough to laugh at your own posts in this thread. What's your solution for my dream of dating Megan Fox? And no, I don't want a three year plan. I want a SOLUTION!
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Who are you to say this again? I could say the same to you, then what? Cmon. As for your analogy it is spurious at best. If you can come up with something just slightly relevant I'd be glad to answer. You're not comparing apples to oranges, you're comparing, uhmm, ok usually I'm better at this. :) You're comparing asteroids and apples. Ok, that sucked but you should know what I mean.
 
Quote from traderwann:
Martin you are being so defense instead of just admitting you are wrong. That's not usually expected from a trader. Anyhow. Yes I used the word "story". SO WHAT? That was followed by the words "this is real, this actually happened." You are trying to blame me for using a word instead of accepting responsibility for not reading and making a mistake. That's the reality. If it doesn't matter why even say it's a story in the first place? Seems like you really want to say anything to deny it rather than accept that it happened, and may not be a lottery ticket. I don't know if it is or isn't, you seem way too sure. When presented with evidence, you dismiss it.

As for "solutions" you are taking that word waaaay out of context. Your comments are inaccurate because it appears once again you haven't really read or followed along. Your pulling the nonsensical "to your liking" BS again. I've already addressed that specifically, I can copy and paste if you like. Do you want me to or are you not really here to actually address any actual points I make, resulting in unproductive conversation? Sorry to be blunt, but don't shoot the messenger. You doing what you are here (ignoring, avoiding, etc) is part of what I mean by shut me down. Either it is happening or it is not. Deal with the facts, nothing do to with "thinking this way." The last sentence is really really strange. Let's see, tell that same thing to a slave a few hundred years ago and see how people react today? Tell that to anyone who's ever made a historical change for good (in hindsight) against either majority or significant minority opposition. CHANGING THE STATUS QUO FOR THE BETTER IS NOT NEGATIVE AND IS VERY MUCH HERE THERE NOW AND EVERYWHERE. Completely void of any intellectually and emotionally competence is that statement. Don't shoot the messenger and good luck arguing otherwise. I suggest it is easier to just admit one is wrong when presented with the evidence.
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Dude, honestly, let's stop this nonsensical back-and-forth... There's no point in me responding, so I won't.

I have already wished you the best of luck in your endeavors. That still stands. However, one thing I will tell you as a potential investor. Your attitude is all wrong and I personally wouldn't dream of allowing you anywhere near my money. Take it whichever way you please.
 
Here's something new I asked but I think it got lost a few pages back:

A hypothetical mechanical and discretionary strategy, both are similar with good results, decent ratios and other measures. Any faults can be traced to one aspect. Half the trades go in the wrong direction about 2 or 3 times the expected profit, sometimes the profit is higher than expected as well but not always. There is no identifiable pattern so not possible to reverse or change without affecting rest of strategy. Most trades end up positive or close to it, and the rest take care of themselves. There are few losing days but when they come they can be up to 5 times the average daily profit. On a monthly basis this leaves the worst months around break even or small loss, rest take care of themselves.

What is the advice and would it differ for mechanical vs discretionary? Is this an alarm bell issue or is it somewhat normal or is it even a problem?

Example: Short 5 contracts gold and 5 silver into the close. All indicators point to drop, if I was neutral I would short but no more RTH left. I monitored position when it opened after hours. I was -$13k on one contract and -$6k on the other. Everything I expected happened. Right at open after hours both trades were working in my direction, by 8pm I was around +$6k and +$2k, which was the expected profit on first, second one came a bit short. Trade out. Doesn't always happen so smoothly but the numbers are usually in about the same ratio.
 
Quote from Martinghoul:
Dude, honestly, let's stop this nonsensical back-and-forth... There's no point in me responding, so I won't.
Your attitude is all wrong and I personally wouldn't dream of allowing you anywhere near my money. Take it whichever way you please.
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I called you nonsensical and I explain in detail. All you do is contradict. A contradiction is not an explanation. If my attitude is "wrong", please explain exactly but take into consideration everything I have said. I would LOVE to stop the nonsensical back and forth, it is up to YOU though. You are not explaining and you are making mistakes! Then when pointed out, you say my attitude is wrong? I don't think so mate, good luck with that in front of anyone objective! I asked you not to shoot the messenger, and you do it anyway. How do you benefit by doing this? How does anyone benefit?

Let me guess, as an investor when you do things that don't make sense I should not point them out, doing so is part of the "bad attitude"? :D You sound like a King or Queen of ages past, a dictator who can't be contradicted, who can't do anything wrong and pointing it out is "insulting" instead of "helping."

Cmon mate. Really? Do I really have to lay all this out in such detail only for you to not get it? Do you not see that if I am not correct we all benefit by a conversation, if I am correct we all benefit by admitting that until it is shown to not be so. Simple. Easy. Why complicate it will all the emotional stuff that blurs reality?
 
To the original poster:

I too believe going the prop route is your best bet. However, as mentioned, if you lose money, you lose your money. Not an investors.

Depending on your approach and who you meet, despite what most are saying in this forum. You can get money without a track record. It is a tough road, but it can be done. You just have to know the right people to get you in front of the right investors. There are hundreds and maybe thousands of wealthy people in the US that would like to take a chance, rather than gaining a small % return from a savings account.

Your best best is finding a broker/dealer that can assist you in that matter. Finding 20 people to invest $5k is probably more realistic than 2 people investing $50k.


However, by going this route, you have to jump through hoops to be legal. You need to become an investment adviser, hire a lawyer to create the legal entities and the PPM. The attorney expenses are going to be $10k at least. And that is on the cheaper end.


The $10k you spend on attorneys can be spent at a prop firm to trade immediately and not deal with the legal hoops the government is going to require you to jump through.
 
OP,

Firstly, most of what Heech has said is pretty spot on. I've been where you are, so I'll offer up my 2 cents.

FACT: You'll probably eventually find a crazy gun-slinger willing to seed you $100K on a completely unproven discretionary futures trading program, BUT the time required isn't worth the payoff. You have no way of knowing how many people you'll have to talk to before convincing one of them.

Ironically, if you started trading real $ right now, by the time you find a stranger crazy enough to seed you it will probably be your track record that convinces him. IOW, you'll likely be searching unsuccessfully for many months, and in the end the result would've been the same if you'd just spent that time trying to get a real $ track record together.

The fastest and most dangerous (in terms of personal relationships) way to get where you want to be is to have an open and honest discussion with a few family members who together might be able to seed you just enough to implement the strategy. Unfortunately, it is very likely that you won't be able to charge them a fee. But at least you'll be trading the program and getting a real performance history together. If you choose this route, YOU MUST UNDER PROMISE AND OVER DELIVER. None of this 10% monthly stuff! I can sympathize with you there, and I'm not saying at all that I don't believe you. But you really need to focus on suggesting something more in the realm of 2-3% monthly. That is a good enough return for anyone who might be interested and they won't be expecting >100% annual.

Also, your time is worth something, and because you have no $ right now, you must trade your time for $ in the most efficient means possible. That might be either trading or getting a job, or both.

You could scrape together $10K and get with a reputable prop firm like others have suggested. If your results held true, it would take less than a year to build a $100K personal account and strike out on your own, but probably the same amount of time you would've spent looking for that previously mentioned crazy gun-slinger.

In any case, the goal is to build a performance history AND a personal bankroll. As Heech mentioned, even if you raised $100K, the fees aren't enough to live on. Not even if you were getting 200% annual. It doesn't matter what route you choose, you are absolutely going to need to get a real swing-shift or grave-shift job. I did it, and many others have as well. Believe me, the process of raising capital and launching a successful trading program is much easier when you don't really care whether any particular investor signs on.

When I sit across the desk from Joe Millionaire, I'm doing him a favor by offering him a good place to invest his capital. Whether or not he takes the opportunity is completely up to him, and it really doesn't affect me greatly either way. It was always like that, because I always had another steady income that didn't conflict with my trading. I never had to "sell" anyone on anything, and I was always able to be perfectly honest and even undersell the program. The reaction is much better when you're not needing to force the sell.

....................

Now a word of caution. I'm assuming that if you were lucky enough to find an investor that you'd want to charge a fee. If you actively sought out this person then you just disqualified yourself from the section 4.14 (a)(10) registration exemption for CTAs. (Notice that I didn't say CPO, as a CPO would not have even a remote chance of survival with such a small amount) This means that you'll need to pass the Series 3, register with the NFA, and assemble approved Disclosure Documents. These must be completed before you go soliciting funds. FYI, this process will take 3-6 months. It will also cost you $3-10,000 depending on the way you choose to set it up.

So, you can see that you have a bit of a road ahead of you regardless. Feel free to ask questions, but remember that this industry is filled with unfortunate answers.
 
Quote from earlyexit:


However, by going this route, you have to jump through hoops to be legal. You need to become an investment adviser, hire a lawyer to create the legal entities and the PPM. The attorney expenses are going to be $10k at least. And that is on the cheaper end.


The $10k you spend on attorneys can be spent at a prop firm to trade immediately and not deal with the legal hoops the government is going to require you to jump through.
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Absolutely DO NOT become an investment adviser! If I remember correctly he trades futures, and the fee structure of an investment adviser is not what he is looking for.

He would probably be looking to form a CTA or CPO. Good thing about a CPO is that you are right about finding 10 people with $10K, rather than 1 person with $100K. It is easier, and possible in a CPO, but the cost and hassle of setting up and running a CPO are much higher.

The CPA will cost less to setup and less to run, but each client would need to meet that $100K minimum he talks about. Obviously, this is tougher, but my CTA has a higher minimum than that and finding clients isn't too tough.
 
Thank you for the replies in this thread. All prop firms I've talked to want a deposit that I could just put in my own retail futures account. It seems there's no benefit, some have even said this to me straight out. Some have said they'd rather not take a percentage cut of my earnings since I should just trade on my own (as if it would be unfair to help me in this situation). Ooook. People say all kinds of stuff.

I was expecting that since props hire newbies, one of them might see less risk here. I managed to find one individual who does this kind of thing and the response was the proposed ROI isn't good enough. I almost choked, but whatever, people say all kinds of stuff.

I've heard stories of making 100s of calls a day soliciting funds. I've done cold calling, that's not what I'm about to do with my time. The results have continued for 30 trading days now. I know I'm crazy, but there's this thing called a free market, where people exchange skills and capital. I know it's nuts, like lunatic asylum material, but I thought we had enough of a free market where this can happen.
 
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