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what is the best way to build a track record?
- Thread starter JM1987
- Start date
Quote from JM1987:
I've been trading strictly intraday for over a year now and I'm doing ok, but I've come to realize the real money is in swing trading. I've had a sim account for about a week now and I'm already up over 10%. How do I go about keeping a legitimate record of my trading to show a firm or hedge fund in the future ? Is there a site anyone hear uses or any other tool I should be aware of?
Thanks, JM
JM I'll make this simple. Go to covestor.com and signup now. Then, once they've tracked you for at least a year, and you've beaten the S&P the majority of the time, 50%, this is all you'll have to do to get your model verified with not just your results but your subscribers results. As long as you don't make any stupid moves, I got in with a -15% record with the S&P -33%. It's still beating.
So yeah. There is absolutely no legitimate reason not to explore your trading style on Collective2. For instance, if you were given the opportunity to trade high leveraged futures how would that change your money management strategies? I'm assuming you do have some kind of <i>profitable</i> strategy to promote, but as far as how you'll react only third parties can give that to you.
More likely before a year is up if you're good you'll get subs a lot sooner on collective2, but collective2 does not legitimize your trades at all. For that, you'll need to signup on Covestor right now and start tracking your trades for the year. Give them your login information at your broker and whenever you make trades it'll update. The problem is that they take cash out, so if you buy 1 share of something and that is all you own, they will allocate a portfolio with a value of 100% to that trade, which probably wasn't your intent. Keeping these rules in mind, it'll take at least a year to get your model up, and I'd like to see better traders on the site anyway.
Quote from Lucias:
Don't listen to the posers here. Building a track record will put you ahead of 99% of the posers even if it is hypothetical. If you have a backtested system with hypothetical estimates of returns and a real-time record that matches that then that's very compelling. Investors tend to prefer systematic strategies over discretionary methods but either way it will put you on the right track.
Now, honestly you will have difficulty because there are a lot of traders out there looking for funding. Your best bet is to save money while building a track record.
I really like collective2. It's not too expensive and works well. There are others such as timertrac and I'm sure others.
There is a lot that goes into whether an investor will desire a strategy and it is not just net return. This is a business. This is a career. Don't expect to get all the answers in one day. Work at it.. day-by-day..
Ummm, not sure that I could disagree more.
First, most of what people do on sites like C2 are all but useless. Any real money investors want to see real trade results.
Second, you really don't want to use hypothetical results to promote your trading program. The SEC, NFA, CFTC, etc. really don't like you to use hypothetical performance. They allow it, but then make you jump through all sorts of hoops that make it very difficult to raise capital.
If you use hypothetical performance, then you must include results from all your personal trading accounts for the last 5 years. This is absolutely damaging, because the results of all the proprietary trading accounts is never the sort of trading that a trader would use to promote himself. He is usually experimenting with different strategies and never intended for these statements to be used as a track record. But if you use hypothetical performance ALL of this info must be disclosed.
If your proprietary accounts demonstrate good performance, then why on earth would you be using hypothetical results?
Lastly, sure there is more than net returns that investors are looking for, but returns really are about 80% of it. The other 20% is mainly investor confidence in the manager. Those who are not mainly interested in high returns are usually looking for money market type investments and the large institutions have that money all locked up.
Don't kid yourself. If you don't have the top tier pedigree or access to deep pockets already, you had better have outstanding returns. 40%+ annual, consistent, with a great risk profile. Start an account with the sole purpose of building the intended track record and you'll be able to use that on your disclosure document later, without having to include a complete 5-year comprehensive history of every bonehead experiment you ever implemented in your personal accounts. 12-months should be enough to start getting your documentation ready for marketing.
Quote from Epic:
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Start an account with the sole purpose of building the intended track record and you'll be able to use that on your disclosure document later, without having to include a complete 5-year comprehensive history of every bonehead experiment you ever implemented in your personal accounts. 12-months should be enough to start getting your documentation ready for marketing.
I really should've made it clear also that I was referring specifically to starting a CTA in the above statements. The rules are different for a CPO, and even with some real money prop history, you'll still have to disclose 5-years of history from all accounts traded. In a CTA the 5-year history is only required when using hypothetical results.