Trading for a family member? Am I legally allowed to trade their accounts?

Zr1Trader said:
My best advice is be honest with yourself and grandpa. I'll be honest with you. Don't do it.

Your still really young, get a few more years under your belt trading, get a part time job on nights or weekends to help pay your bills while you learn, keep your expenses as low as possible. Scale yourself up to a meaningful level with a good track record before even thinking of managing other peoples money.
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Would you recommend me to try another prop firm for futures? I've been trying to get a job for about a year now that wouldn't interfere with my trading (5AM-3PM).
 
you already have all the leverage you need with futures. Prop firms where you put up a deposit are a scam IMO. They just want your deposit, commissions, and "education" fees.
 
Why would you even entertain the idea of trading other people's money if you're not even profitable yourself :confused:
You should have atleast five years of great profitability trading your own account, before that idea even pops into your head.
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TheNotSoGreatGatsby said:
I've been trading for a bout 2 years. I traded for an equity prop firm for a short 6 months but had a horrible experience. I sucked ass and switched to futures and I've been trading my own account ever since. Being 21 and still living with my Father, you can say I trade for a living as it's my own source of income, but with such a small account, I'm not making much after expenses to grow my account. I'm just trading 1 contracts /ES.

A family member wants to open an account and have me trade for him. My Grandpa to be exact. But he wants to pay me a salary, and not a profit split. He wanted me to come up with a contract and he'll let me know if he agrees with the terms. Am I allowed to trade his account like this? Is there an example contract of such trader for hire services?

Anybody who has experience with this, can you give me some pointers? We are located in the US if that matters, and I trade futures via NinjaTrader Brokerage (Dorman Trading). He invests through IB. I don't know if broker matters or not.
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If I were you I would keep this simple. Have your Grandpa create an entity where you are both managing members. He will be a capital partner and you will manage day to day operations. The LLC document provides your profit split and gives you the ability to open a brokerage account to trade in that account and a checking account to manage the cash. If your Grandpa is worried about his cash, the LLC document can provide only him access to the business checking account.

If all the trading is in a futures account, you might have to claim a CPO exception as the account owner has two members.
 
I would sign a power of attorney document and find a generic contract labor agreement and use that. As there is no performance based compensation and this is family, there shouldn't be any problems.
 
newwurldmn said:
I would sign a power of attorney document and find a generic contract labor agreement and use that. As there is no performance based compensation and this is family, there shouldn't be any problems.
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The authorized trader document that the FCM will require will cover that.
 
TheNotSoGreatGatsby said:
I wish I could say I have, but I've been spending most of my money, mostly on video games and pizza.
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This statement implies you should take trading a lot more seriously PRIOR to trading anyone's money.

Simply, stop the video games and pizza stuff so that you can grow your own account via moving from 1 to 2 contracts for a few months. If your account keeps growing...then go from 2 to 3 contracts for a few months and so on until you reach 5 contracts.

At 5 contracts and if things are still going well...tell your grandpa to open a trading account with your broker and then you LINK your account with his account so whatever trades you execute in your account will also simultaneously occur in his account.

The reason why I say to go slow is because MOST traders have a psychological problem when moving from 1 contract to multiple contracts especially directly from 1 contract to 10 contract...resulting in a negative impact on your trading. You can only find out if you're one of those traders or not one of those traders via moving slowly your trading account as described above (1 to 2, 2 to 3, 3 to 4 and then 4 to 5)...

You can only do such via growing your trading profits via a little compounding instead of spending your profits on pizza, video games and whatever.

Personally, I wouldn't let any one touch my money with your inexperience level of trading multiple contracts and after hearing what you've been doing with your profits so far instead using those profits to grow the trading account so that you're independent and taking life more seriously beyond pizza and video games.

I just think your grandpa sees what is going on with your life and he has some extra money laying around and it just offering to help you in hopes you'll take life more seriously via paying you a salary as if you had a job.

Simply, your grandpa is trying to motivate you and you should be thankful you have a cool grandpa.
 
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Have you thought about top step trader? It is a futures prop shop. Personally I would hesitate to go into business with a family member. (that's just me though)
 
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