How to find private investors for currency fund?

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  1. #1
    Young Gun is offline Member
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    Default How to find private investors for currency fund?

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    Last edited by Young Gun; 12-22-2014 at 02:28 PM.
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  2. #2
    A.D
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    Relationship building is the key. Start small, and be happy if you find clients with 7 figures but only entrust you with 5 because it's a long process before they're comfortable to really back you. One or two big clients snowballs into several if you're good because they're often highly networked people. Build your goals based off 3 years from now.

    I will say this, you won't get any big players if you're returning 27% a month. There isn't a market in the world which will gift you with 27% a month (per month repeatedly) if you're following proper risk management guidelines. I would have to assume you're highly leveraged which is a smart money repellant. Be careful out there
    Last edited by A.D; 12-21-2014 at 03:03 PM.
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    Last edited by Young Gun; 12-22-2014 at 02:28 PM.
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  5. #4
    A.D
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    Forget 2:1 risk reward ratios for a minute. Your risk is way too high. There isn't a reputable fund in the world ($1bn+) who would openly risk 5-8% per trade. That's ludicrous. That means in worst case scenario situations, with 5 trades per week, you could essentially lose half your clients money in a 5 day period. You are heavily over leveraged. I personally think you shouldn't be leveraging at any more than 2:1 on your money (ie, $100k account, trade $200k lots MAX) in which case you'd need to make roughly 1350 pips per month in order to return 27%. That's 16200 pips per year to do it every month. If you're only trading forex this is near impossible without a team of people. Also, 2:1 leverage would only be reserved for the higher quality trades, not all of them.

    I work off risk of no more than 3% on client money. 90% of the time, it falls below 1.5%. This is with a maximum of 2:1 leverage which isn't used often. Higher net worth clients aren't silly nor greedy, if you give them 15-20% per year they're ecstatic and it leaves no room for scepticism as it would with your strategy. And guess what, to return 20% a year trading 2:1 leverage you only need to make 1000 pips A YEAR. It's incredibly simple. If you want to double the account and pocket the money for yourself, it's 5000 pips. Still a third of what you would need to make to maintain your returns, but you'd be doing it on multi million $ accounts and not a few thousand which is all you'd attract with so much risk. See the difference?
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  6. #5
    A.D
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    I was just looking at your fx book thing (I've never used it so I can't speak for its accuracy) and it says you have a 37.5% chance of making 5 consecutive losing trades and losing 20% of your money. I don't know an investor in the world who would be interested in so much risk. I know I sound really negative, I'm not trying to knock you but building a fund should be a long term investment in yourself and your clients. Having a 63% chance of losing 10% of your clients money on 2 trades isn't long term profitable.
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    A.D
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    Also, looking at your trade history, your highest winning trade was 40.8 pips. When you look at what I said above re making 16200 pips a year, you wouldn't be able to do it. I've made trades which have profited 1000-2000 pips each over a period of 1-3 months more often than you'd think. You need to aim to make pips/points, not dollars.

    By the way, that 40.8 pip trade you made profited $80,000. You're trading $2000 a pip, meaning 250 points in losses and you wipe out your entire $500k account. The Dow Jones moves 250 points in less than 4 hours on some days, think about that for a second.
    Last edited by A.D; 12-22-2014 at 02:24 AM.
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  8. #7
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    Quote Originally Posted by A.D View Post
    Forget 2:1 risk reward ratios for a minute. Your risk is way too high. There isn't a reputable fund in the world ($1bn+) who would openly risk 5-8% per trade. That's ludicrous. That means in worst case scenario situations, with 5 trades per week, you could essentially lose half your clients money in a 5 day period. You are heavily over leveraged. I personally think you shouldn't be leveraging at any more than 2:1 on your money (ie, $100k account, trade $200k lots MAX) in which case you'd need to make roughly 1350 pips per month in order to return 27%. That's 16200 pips per year to do it every month. If you're only trading forex this is near impossible without a team of people. Also, 2:1 leverage would only be reserved for the higher quality trades, not all of them.

    I work off risk of no more than 3% on client money. 90% of the time, it falls below 1.5%. This is with a maximum of 2:1 leverage which isn't used often. Higher net worth clients aren't silly nor greedy, if you give them 15-20% per year they're ecstatic and it leaves no room for scepticism as it would with your strategy. And guess what, to return 20% a year trading 2:1 leverage you only need to make 1000 pips A YEAR. It's incredibly simple. If you want to double the account and pocket the money for yourself, it's 5000 pips. Still a third of what you would need to make to maintain your returns, but you'd be doing it on multi million $ accounts and not a few thousand which is all you'd attract with so much risk. See the difference?
    Quote Originally Posted by A.D View Post
    I was just looking at your fx book thing (I've never used it so I can't speak for its accuracy) and it says you have a 37.5% chance of making 5 consecutive losing trades and losing 20% of your money. I don't know an investor in the world who would be interested in so much risk. I know I sound really negative, I'm not trying to knock you but building a fund should be a long term investment in yourself and your clients. Having a 63% chance of losing 10% of your clients money on 2 trades isn't long term profitable.
    This is why I told this guy why my money is managed by people with Master degrees in Finance and 20+ years experience and why I would not give a single dollar to a 23 year old with just a high school education.
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  9. #8
    A.D
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    One very large factor I'd also like to point out is that trading a demo account (which you're currently doing on fxbook) is very different to trading real money. The transition is NOT seamless.

    I don't want anyone to mistake my information in this thread as a bash on the OP. I'm doing my best to educate rather than criticize despite how it may sound.
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  10. #9
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    Quote Originally Posted by Young Gun View Post
    I'm more than willing to start small but even then that is proving to be a challenge. Some are unsure of the forex market in general and hear all kinds of horror stories of people losing their life savings and whatnot. The only serious investor I've come across said he wanted me to trade $1k for a year then he would *MAYBE* give me more. That is laughable for the amount of hours staring at charts this takes. I think most people think it's just about placing a buy & sell and don't take into account the technical analysis, keeping up on any world events, following what the FED does, etc.
    Everyone who is serious about money investments does that, none stop. But you don't have the cridentials or life experience to understand the implications of world events, politics and international markets or basic knowledge that a first year Finance Major would have learned. U have the drive, I sugest u don't look for investments that will laugh at you, instead go to school, get a BA in Finance and be ready to have your horizons and aportunitys blown wide open
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  11. #10
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    Quote Originally Posted by A.D View Post
    One very large factor I'd also like to point out is that trading a demo account (which you're currently doing on fxbook) is very different to trading real money. The transition is NOT seamless.

    I don't want anyone to mistake my information in this thread as a bash on the OP. I'm doing my best to educate rather than criticize despite how it may sound.
    Good catch, he told me he was trading with real money
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