What would you do with $1 million?

M

MickMason

I don't mean how would you spend it.....how would you trade it? Who would you put the account with? Would you trade spot, futures, or ?

I'm just about to be overfunded, help!

I've been trading a small account for someone over the past few months and they've been happy with the returns. They've now decided it's time to increase their investment by a staggering $1 million. In the scheme of things that's probably small potatoes but to someone like me who has been trading 100k it's a very big transition.

Where would be best to place the account? What kind of deal should I be looking for? Will I have problems getting filled? I'm an intraday trader, even a scalper at times, will I have to rethink my strategy?

This is a whole different ball game for me, although I'm looking forward to having those kind of funds available it's with some trepidation!

Help and advice very welcome!


Mick
 
Keep doing what you were doing prior to that. I don't believe you clients want you to change dramatically your trading style.
 
Quote from MickMason:

I don't mean how would you spend it.....how would you trade it? Who would you put the account with? Would you trade spot, futures, or ?

I'm just about to be overfunded, help!

I've been trading a small account for someone over the past few months and they've been happy with the returns. They've now decided it's time to increase their investment by a staggering $1 million. In the scheme of things that's probably small potatoes but to someone like me who has been trading 100k it's a very big transition.

Where would be best to place the account? What kind of deal should I be looking for? Will I have problems getting filled? I'm an intraday trader, even a scalper at times, will I have to rethink my strategy?

This is a whole different ball game for me, although I'm looking forward to having those kind of funds available it's with some trepidation!

Help and advice very welcome!


Mick
More...

Where to put the million, that's the question. I would be inclined to trade with an outfit that provides the bucket shops with their liquidity.

If you stay with a bucket shop, they may not be able to tolerate your scalping 100 lots (the max leverage you'll get) and only staying in the market for a few minutes.

Best not to find yourself up 40% only to have the broker 'persuade' you not to withdraw your profits. I will have to withdraw $100K from an FXCM account in the near future. I will let you know how I get on.

I need someone to convince me that retail spot trading is scaleable given the reputation of the retail market makers.

I am sure this thread will attract a spectrum of views!

I am at the gloomy end.

Regards
Morty
 
you arent gonna like this..

but your reaction to the sum might indicate your readiness to handle it. ive noticed that when i overlaod a position, it impacts my ability to be objective. i also dont trade as big a size as i did years ago... i relaize now that i didnt know as mcuh then as i thought i did and that 5 years into the future i miht think the same about my current trading abilities.

good luck.

p.s. - you could always go on the lamb and have the best 6 months of your life. :D
 
Liquidity won't be the problem. It's the psychology behind managing a fund exponentially greater than what you're use to. Unless you are currently pretty "automatic", you will most likely trade differently. As the previous responder noted, the reaction you have to trading a larger account is a significant sign. If you do trade spot, I would shop around and stay away from the bucket shops. I wish you the best.
 
Quote from QQQBALL:

you arent gonna like this..

but your reaction to the sum might indicate your readiness to handle it. ive noticed that when i overlaod a position, it impacts my ability to be objective. i also dont trade as big a size as i did years ago... i relaize now that i didnt know as mcuh then as i thought i did and that 5 years into the future i miht think the same about my current trading abilities.

good luck.

p.s. - you could always go on the lamb and have the best 6 months of your life. :D
More...

This is my experience as well. One thing I do now is I think of everything in percentages. Initially, when you first step up, profits will look huge and negative positions will look devastating. This may tempt you to stray from your plan. Always convert what you see to a percentage so that you can make sense of it.

I wonder what sort of fee structure/profit take has been agreed with the client?

Morty
 
agreed...remember you can still blow up....what would you do then?


Quote from gkishot:

Keep doing what you were doing prior to that. I don't believe you clients want you to change dramatically your trading style.
More...
 
Sorry to be a bore but are you registered with the FSA ?

If not then if it goes wrong then you could be personally liable for all losses, or at an extreme face jail.
 
Thanks for the replies, I'll answer them all in this post if that's ok....

gkishot, it wasn't the client I was concerned about as he doesn't care how he's making money as long as I'm making it for him, I was more concerned about the marketmaker and how they would deal with the account. I would be happy just doing what I do, they may not :)

mortysill, yes that's exactly my problem, where to put the account to a) get the best deal, and b) get filled. Everyone promises great things just to get the account, what happens once they've got it is another story as you know. I can't change brokers easily because the client is in SA and it's a problem. Good luck with your 100k, I had trouble getting 10k back from CMC until I screamed compliance!

QQQBALL and Hlm You both make a valid point and it's a problem I had when I made the transition from a mini to a regular account several years ago. Confidence in one's trading strategy I think helps overcome the money issue, it can be a bit daunting at first when the stop is the price of a small car! Like mortysill I also think percentages instead of dollars and cents, it's the only meaningful number really. I've got the psychology issues sorted by now I think, failing that going on the lamb sounds like a good second choice!


ElectricSavant Blowing up isn't an option! I already adhere to strict money management rules so I don't think there's any reason why trading a million should be any different than trading a thousand from that perspective.....or am I missing something?


nik1033 Thanks niko I will.


Lon Eagle Good point, I don't like porridge! I already went into the FSA nightmare when he opened the first account, as an 'employee' of his business I'm exempt under the "absence of holding out" rule according to the FSA, and who am I to argue with God :)

I'd appreciate some practical suggestions regarding which broker to use, the kind of deal I should look for from the broker, and any problems I might face trading an account that size.

Thanks

Mick
 
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