Ever tried trading other people's money?

Hey… I tried… It was just like demo trading, no fear of losing money… lol… And truly der r more chnces to win when trade emotion free, tens free…

We’re all trying to reach professional trader status for one reason and one reason only: Independence.
We all have the same inner desire to create our own freedom.
We don’t want to have to answer to anyone but ourselves.

I feel that whenever you’re accepting funds from another individual to put to work in any type of market, you are no longer completely independent and free from having to answer to someone. If a friend gives you $10,000 to trade with, you are now responsible for protecting your friends money and answering him/her whenever they have a question based on profit/losses.

Sure, when the money is rolling in, all will be fine and dandy.
But, to the lay-person completely unaware of wins/losses being randomly distributed and the potential to lose 3,4 or 5 trades in a row equaling 5-10% of their money, when the money is rolling out the real fun starts.
You’ll be getting phone calls, emails, text messages asking when the account will go back green- they’ll most likely start to panic and say they want their money back, etc etc.

This will put a strain on you as the individual trader, and potentially lead to over-trading to try and recoup the funds quickly.
Contract or not, it doesn’t matter.
When that balance turns Red, you better be expecting to explain yourself every day or so.
Rarely will you have a partnership which turns out where the investor really “doesn’t bother you”.

It’s just not worth it to me.
Save all the money you can, inject it to the best of your abilities, and focus on small gains month over month.
Eventually, if you don’t over-leverage yourself and keep a cool head, you can build up a nice little account balance.

I did it for a while for a lady from work. I didn’t like it. She was constantly calling me at all hours asking for updates. Plus I felt a lot more pressure which compromised my trading to an extent. I would only do it again as a favor to a family member or friend but still wouldn’t feel very comfortable with it.

But how long have you been trading live ? do you have a profitable system in place to trade someone else’s money ?

I would ask those questions myself first before trading for someone and its very unlikely that I will except for a family member. Like you mentioned I think there’ll be an added pressure if you’re going to trade for other people why not just set up your own trading firm ? Thus the pressure will be less and you can make yourself a regular income just like as if you were working for someone else. But the freedom will be less compared to if you were trading your own money.

All in all though I haven’t tried I don’t think I would trade other people’s money.

Thanks for all your inputs, guys. This is a more common problem than I thought!

I decided to refuse my friend for now. Bottom line is, she doesn’t have enough finance background to understand the limits of risk management on profits. She’ll likely end up checking on me (often) to see how much I’ve made for her and I’m not sure I can give her consistent gains yet.

I’ll stick to trading my own money but I’ll also keep records so I’ll have something to show to potential “investors” in the future.

Huck

I was trading live with fibs pretty successfully at that time. I’ve since gone to a more mechanical type of system. She just gave me control of her scottrade account. I wouldn’t know how to set up a trading firm lol.

I would never do that. Even by common agreement, losing your friends account will create hostility between you and your friend. Do you really want to jeopardise your relationships. IF you really trade good, open PAMM and enjoy anonymous investments…

I see you’ve gotten an idea of the pitfalls so I’ll try not to be redundant, but I have a real-world case-study of the issues, i.e., me. We used a pretty fair algorithm and let’er run. There were surprises at every step even though it had been tested to our satisfaction. Among our pitfalls were:

  1. Used only close friends’ money. I lost a valued friendship and fractured others’. We all basically left town.
  2. We told them to invest “only what they could lose” - which they did lose- all of it. However, some put in their life savings and his daughter’s college money, which I didn’t know - leaving them hurting financially and relationally with those depending on them.
  3. It was one of the most stressful times of my life, and I pretty much lost my fiance because of it. Its one thing to lose your own money but to lose that of friends and loved ones is a horrible, horrible pain I never want to face again.
    I can’t say I won’t ever do it again, because I might. I’ve learned such an enormous amount of valuable, essential life lessons in the process I feel I might approach it from a more sage attitude.
    All the best,
    Jonathan

yeah. we should trade with our money. we will has good status. we will not have pressure. i think this is a factor to success of trader.

As I am not a professional trader not trade for any other person. My focus is my own trading. I trade only my own account never tried for other people’s money , Forex trading is risky I will avoid to use other’s money , It may loss for them.

Nope, I like to trade with my own money as when we trade with other’s money, and we lose, it becomes very hectic.

Yes I tried many times to trade for other people. They trust me in trading . I got most of the time profit for them. I think with other’s account we remain more conscious and careful . Now I do my own trading or for one of my friend account.

Greetings. I can only speak from my experience but I would strongly advise against it. A lot would depend on where you are with your trading and one would have to be brutally honest about that supported be a rigorous review of your performance (and performance review on the back test).

Using other people’s money added a lot of unnecessary pressure to what I was doing at the time and it was especially difficult dealing with people that were completely clueless about trading.

Best advice - stay away, objectively prove your performance. Self finance where possible; rather owe the bank that jeopardize relationships. But that’s just my opinion.

I have never traded with any other person’s money and also I will never do, as it makes it even more worse when we lose by trading with that money.

I agree with the previous posts. I would not do it. This will put a lot of pressure and will affect the trading in a negative way. When the process is affected like that, the result will be only one, certain loss which will eventually jeopardize the relationship. If you don’t have any professional experience with that, there is no point on doing it. It would be better to teach and show the other person what you are doing and how he/she can developp his/her own base and keep learning. Otherwise the risk will be too big and eventually not worth it.

I think it is not advisable to trade with other people’s money else it will just make it worse when we lose and can’t repay them.

I, personally, would never be comfortable to do that. I am responsible for myself, my choices, my money. Being responsible for somebody else’s is a daunting task. Especially if that person is a friend. In my opinion, it’s not a good idea to involve money and business where friendship is concerned.

I know exactly how are you feeling as I was trading money that there weren’t mine and the stress is bigger. You have the responsibility of their money and your crisis on the remaining time will not be correct.

Yeah, it is better to trade a little with our money, than to trade with others money. Today or tomorrow you’ll face loss.

One really needs to think long and hard before they decide whether it’s worth taking a the kind of risk that could jeopardize one’s friendship in case they lose the money.