Where can I go for funding?
- Thread starter Hookway
- Start date
I've traded futures for 50 years, and used computers to trade, having run millions of tests on various U.S. futures.
I looked quickly, and I doubt anybody would fund based on those results:
1. One year is a short period, but more significant is that there are only 12 trades;
2. I assume the trades were from the long side -- in a year when most stock markets were also higher, or if short, many markets -- SP, crude, grain, cocoa, sugar, coffee futures -- were trending.
3. But above aside, the major negative is the 83% winning trades. Other than micro-second computer traders, the best human traders maybe are profitable on 50% of their trades; 1/3 is more likely.
4. In the real world, over time, almost nobody has 83% profitable trades, nor only goes through a 3.9% drawdown, nor has 100% winning months.
In my futures trading models, if any system produced more than 75% profitable trades, I immediately discarded it, knowing if it worked in future, it would be just briefly.
BTW, if you have "achieved similar results for years," I would think you would have sufficient trading capital.
Ty for the reply, regardless of the individuals tastes and preferences for batting averages etc, I'm more concerned with what the avenue is for funding, i.e. say it did have the track record you expect. No, I have sufficient trading capital to get by on, not flourish on, obviously it depends on the size of the bank in the outset.
I get where you’re coming from. Trading other people’s money and getting a percentage of the gains (…and not sharing the losses) is the best scenario that a trader could be in. If you can trade 10x your personal account size using OPM while keeping 20% of the gains for yourself it would double the rate of return on your funds. The only problem is market volume. When the AUM gets large enough some of yours strategies may not be possible due to volume. You’d have to spread it out over additional trades and that will likely drop your performance.
There are funding solutions but the high prices they charge combined with the demands and aggravation to get approved will likely make you think funding is not worth it. You might check out https://percent.com/ I don't know what % they will expect but i can share my experience apart from stock trading funding.
On my regular business we pay 6% per month to ad agencies for a line of credit to buy media (online advertising) with most payments due 30 days after the month of activity. Even at that rate it's not easy to get approved.
Or amounts to 6% per month. Some agencies I must prepay and when I send them $100k they credit me for $94k. Credit is expensive because of the risk involved.
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(Regarding online prop firms) They run a business, not a charity. So the most logical reasoning would state they need to turn a profit to stay in business. Also the major prop firms that have been around do pay out:
---- Topstep(they will even eventually move you live)
----- APEX(Not as clear on when they move to live)
------Earn2Trade(Will also move you live and eventually give a generous FIXED stop loss. No live trailing and no end of day.
------Uprofit is another smaller but never had any issues or heard of issues of them not paying.
All these companies have a great track record of paying.
If you're using a mathematical and skill approach, it's fairly high probability that what you're doing should work on nearly every tradable asset including futures. Otherwise its most likely you're just leaning on the same things as most everyone else to generate a return(Time, bullish bias of major US equities, account/position size and etc). Also if you have to hold overnight, same thing as above.
The glorified scam thing is really only true if you can't intra-day trade at a high level. Isn't that a dumb point though? If you truly can't trade you wont make long term money on any account anyways. So, how is it truly a scam if they pay out?
If you think the drawdown is an issue the a solution could be you could copy trade multiple accounts and just use 1 micro on each. That way you can trade more size, while still having plenty of room to let your edge play out.
Does this really matter for most people though? If he has the skill he says he does and isn't just using time, general bullish bias of major US indexes, account and/or position size to turn a profit, than by the time AUM becomes a factor he will have all the money he needs and wants (unless maybe he's trying to purchase and maintain yachts). Again I don't accept him trading lower volume instruments or not trading futures. If he understands how the markets work, than he can trade the higher volume instruments. Otherwise he's likely just finding some temporary niche or using the above things I mentioned and in that case his edge is a lot less likely to last because whatever he is doing is in a vacuum and if context changes, most likely so will his results.
There is a lot of money out there wanting to be traded. If he wants a 24 hour solution (which there is one that isn't even a bad deal **if you can actually day trade at a high level**) than the very simple, straightforward and cost effective answer would be choosing whichever well established online prop firm best fits his needs.
If he needs to hold positions overnight and rely on time and other factors to turn a profit not necessarily related to day trading skill, than he is going to need to get creative and pound the pavement networking and building relationships by surrounding himself with other people that trade, are in the financial markets or have risk capital they are looking to apply somewhere. Has to make himself stand out by doing something like trading live in front of people, having a really good pitch or explaining in a unique way what separates him from everyone else. It is do able but of course you may have to aggressively network for a year before an opportunity arises.
Otherwise he is left with his current option. Continue to trade his own money and build results. If he still isn't where he wants to be or wants to grow more than the more results he builds the greater his odds are of going a more traditional route.
Good Morning Q.E.D.,
Great response
Few questions for you:
1. When you back test, are you back testing from 2000 to current day in back testing?
2. What are you 2 biggest regrets in futures trading throughout your career?
3. What are the 2 things you happy you did in futures trading throughout your career?
Thank you.
Good Morning Concinnity,
This very true. Very true. I have a friend live in Nigeria sitting on 3 million cash, he trades a bit in forex not very good at it, but he do anything to grow that captial in a real trading edge or someone who can grow it for him.
I have always believed that the trading game is the best business in the world.