start up cash
- Thread starter scotch750
- Start date
i don't plan on making money for the first 6 months. if it takes longer than that great. if my account goes below the PDR amount, then I'm out and will go back to paper trading the markets. I remember reading the thread you started about beginning to trade. only a fool thinks he will make money out of the gate...i agree I don't plan on making money, but i don't expect to be losing my shirt off either. Our approaches will be completely different. I'd prefer to bleed to death while I gain experience than to lose as much as you did on your first trade. There is no way in hell i'd watch the price of my stock plummet so many thousands of dollars before closing the position. Losses will be exited immediately at predetermined points, and then I'll reassess as to when to reenter based on my plan. By no means am i invincible to the big loss, but I'm going to do whatever I can to limit it.
well then.....you will be starting off much more prepared than i did... good luck to you
I'm wondering why you even bothered to "give a little background about yourself". As if being a graduate student would have anything to do with trading success. For your edification, your education will not be of much help in trading.
I wish you luck and like most of the other posts urge you to try it with your own money before you soak your professors, or atleast wait until you have your degree and aren't relying on their good word to succeed in your field.
I wish you luck and like most of the other posts urge you to try it with your own money before you soak your professors, or atleast wait until you have your degree and aren't relying on their good word to succeed in your field.
I guess its a lose lose. Other people have been slammed because they asked questions without letting people know their situations. Either way, it was there for the taking. I don't think I claimed that I will be successful because I am a graduate student.
Your right about one thing, the MBA will not make a world of difference in my trading. Maybe managing the paperwork involved in running a business, but that's about it. On the other hand, many people have posted the importance of psychology in trading. I belive that my training can be helpful in my trading activities.
Frankly, trading is harder and will take more training to be successful than getting a PhD in Psychology. However, if you are willing to work as long, as hard, and to pay as much in tuition to get your 'degree' in trading as you did to get your other degrees then you can expect to be successful..... eventually. If not you are road kill waiting for a big rig to come along and smash you into the pavement. There are fewer professional traders in the U.S than there are professional athletes. Would you wake up one day and decide you want to play for the Packers? Would you expect to be successful?
If you are being paid to manage someone else's money (ie the incentive fee), then I believe that you need to register with your state's regulators unless your state does not require it (eg FL) or you are excluded for some other reason (eg you fall under the definition of hedge fund or private equity, but even then you may still have to register with your state). You may want to look into that.
It won't be the slightest bit helpful. No classroom can prepare you to handle fear when you are trading OPM and your trades go south.
Also, you are putting yourself in grave legal jeopardy when trading OPM unless you cover yourself with a good contract. Your opinion that this is play money for your friends is naive, and they can quickly turn ugly when you trash their accounts, which is more than likely.
You can sometimes get away with trading for an individual if he is high net worth and close to you. But when you go beyond that, state and federal regs expect you to be registered as an investment advisor with a series 65. That will require an exam and registration costs. You will also need to put together a business entity to protect yourself, and an associated bank account. (You thought this was going to be easy, didn't you? Nothing is easy anymore, when advising or investing for others.)
So you should begin by covering this with a good attorney versed in these issues, and don't assume that you can't be held liable for losses. The meager profits you can make from a percentage of 40K isn't worth the risk. And after looking carefully at the regulations and associated costs, even for a good contract, you will probably decide it isn't worth the expense, either.
dogen3, thanks for your post. I hear trading is tough, and I do expect to work hard learning and training to be successful in this field. I don't expect to get rich quick. I did post that I would charge a 15% fee after 6 months, but I am not making the assumption that I will be profitable by then. It would be nice to break even or down slightly.
truthteller, i didn't say that the classroom will prepare me for trading, i stated my training can be helpful...a general comment about my overall training. classroom learning is only a small portion of the training. real experience applying classroom knowledge is the best education you can get. as stated earlier in this thread, getting my feet wet is the next step. another point you mentioned was coping with fear. i believe fear is one of easier negative emotions to control. you can predict, to a certain extent, when this emotion will arise and prevent/counter it. losing some trades is a part of life. knowing how much you are willing to lose on each trade can help determine your threshold of fear. exit at this point and your fine. people who freeze in the headlights and not exit at or before that point will become fearful and then roadkill.
sorry a little off topic...back on track.
how do you think things would change if i took their money as a loan with no interest attached and used that money to fund my account. then if i made a profit, I'd gift them so much money (e.g. 5-15% of net profits if there were any). would i still need to be registered as an investment advisor?
I'm still investigating the legality of the whole situation and any more leads would be appreciated. i don't mind putting in the grunt work looking up the law, but when it comes to security law, it seems that paying the lawyer fees may be the best way to go. as you stated, it might not be worth it overall.
truthteller, i didn't say that the classroom will prepare me for trading, i stated my training can be helpful...a general comment about my overall training. classroom learning is only a small portion of the training. real experience applying classroom knowledge is the best education you can get. as stated earlier in this thread, getting my feet wet is the next step. another point you mentioned was coping with fear. i believe fear is one of easier negative emotions to control. you can predict, to a certain extent, when this emotion will arise and prevent/counter it. losing some trades is a part of life. knowing how much you are willing to lose on each trade can help determine your threshold of fear. exit at this point and your fine. people who freeze in the headlights and not exit at or before that point will become fearful and then roadkill.
sorry a little off topic...back on track.
how do you think things would change if i took their money as a loan with no interest attached and used that money to fund my account. then if i made a profit, I'd gift them so much money (e.g. 5-15% of net profits if there were any). would i still need to be registered as an investment advisor?
I'm still investigating the legality of the whole situation and any more leads would be appreciated. i don't mind putting in the grunt work looking up the law, but when it comes to security law, it seems that paying the lawyer fees may be the best way to go. as you stated, it might not be worth it overall.