Starting your own hedge fund

Hello traders,

Rather than boring people with information about myself or my trading history I was hoping I could get your personal opinions on how I should startup a hedge fund. I don’t spend much time on forums however I’ve noticed that if there is one distinct divide between most of the traders here it is that there seems to be a clashing opinion on whether you can or can’t beat “the market.”

I’m looking at (potentially) starting a youtube series which shows the investments I make as a swing trader over the course of a year to illustrate that making 40% to 80% p.a. with relatively low risk isn’t quite as difficult/hyped up it sounds to be. The way I see it, nobody has consistently done this with a low risk method and shown the proof of it. I don’t intend on becoming a youtube celebrity nor do I intend on divulging my strategy, my intentions are to simply show that it can be done in a live environment with real proof of the trades that I make (time, day, size, currency pair, tp, sl, etc) and hopefully this will market my ability enough to draw investors by the end of the 12 months.

I’m hoping you could give me your own personal opinions as to whether you think this kind of endeavour would be worth my time and whether you think this would attract a typical retail/wholesale investor.

Great idea! hope it works out for you.
Which country are you in? Biggest problem to getting investors is you need to be regulated or partner with someone who has a financial license.

Thanks for the input comstrader :slight_smile:

I’m from Australia and am aware of the licensing/red tape that comes with fund management.

You’re going to need so much highly specialised legal advice, so much set-up capital (the professional fees alone will come to tens of thousands), and such a good, impressive and independently-verified trading record that I think a beginners’ trading forum is really unlikely to be a helpful place for you to seek opinions.

I am in Brisbane. I was looking at the application for an AFS license a few days ago. Its a lot of red tape. It might be achievable…
there is a lot of money floating around in Australian at the moment from super funds. An AFS license should give you a great start to set up a fund. You could also partner with someone who already has a license.

Other then that , you could sell the signal? myfxbook, mql5, etc?.. Or have an overseas company?

If i was investing in a fund, it would have to be in Australia, usa, Uk, etc… I would also check that they were regulated and responsible. If you want to make the big bucks with a fund, i am not sure if there are any real shortcuts that would work.?? If you find one let me know :wink:

Thanks for the input lexys. As i’ve previously worked as a financial planner I understand the legal/cost implications of starting my own fund. My motivation is to get peoples subjective opinions on whether marketing my forex experience online will be worth it or not. I do not require a professional opinion for this rather simple honesty.

Fair enough … sorry that it’s not what you want to hear, but my own suspicion is that it’s very much “odds against”, partly because there’s enormous competition for that, online, in a complicated and frankly murky industry, and partly because in order to attract investment substantial enough to be worth talking about, the standard of independently verified/audited “history” required is so very high and demanding.

Have you thought about raising trading capital through a “funded account” of the type offered by TopStepTrader? That would avoid all the legal and other complications, and would be hugely quicker and easier, if you can pass their “Combine requirements” (and without the skills to do that, or something very like it, the whole thing’s kind of “academic” anyway?).

Thanks again comstrader, I know some people in the business who have their own AFSL and in most cases ive heard it is a long and hard road, very few people I know were able to take shortcuts along the journey.

Thanks again lexys, I keep a monthly record of my trading history which is provided by my broker. Marketing myself online would simply allow me to strengthen the validity of my performance over time but also hopefully give me exposure to potential investors after the 12 month period. Im still however looking at my options.

In some contexts, it’s of some value, of course … but it’s not necessarily quite as persuasive an item of evidence as one would like, because of the widespread awareness that people can have 5 or 10 different brokerage accounts, and can therefore fairly easily produce a profitable one when it’s needed. (It’s what many people do at “those sites” where they sell signal services for copy-trading, etc. etc. I’m “just saying” …).

I agree, definitely something to think about. Thanks for your time and response lexys.

I some times hedge my position to save me from a big loss. Staring at hedging is boring specially when market is slow . You feel now you are locked with money . Neither close sell positions nor buy positions. It is also a difficult technique to handle .

Have you actually read the OP’s question and the rest of this thread???