I was offered a profit/loss deal from a friend, who has just recently started forex but knows it better than I do. I don’t want to take on a lot of risk, and he knows that. The offer is that, we’ll put in the same amount of money, say $1000 each. Now, here’s the flesh:
For each trade -
If 5 or fewer pips are won, I’ll take them all.
If 6 or more pips are won, I’ll take 5 and he’ll take them all.
He’ll bare the first 5 pips lost, but I’ll take the losses between 6 and 10.
If the loss is greater than 10, he’ll also bare the rest.
From my understanding, this is similar to having TP set at 5pips, but the reward per pip is higher here because the amount bought is doubled, right? I’ll be safeguarded if small losses are regularly made, which SL doesn’t seem to achieve.
With the accounting and honesty issues aside, does it sound like a safe deal for me? Is it fair for both of us? Is there already something like this out there or something he made up? Does it have any point?
Please let me know if I’m missing any crucial details!
Take both your money, and hit the nearest Horse betting track, put the $2 grand on the fastest horse to Show, Means the animal must come in 1st, 2nd, or 3rd to win cash…
Sounds like a headache of a business partnership. If you want to bear a small amount of risk, learn how to trade (from your friend if you think he’s savvy to the markets), and risk FRACTIONS of a % on each trade. Trading less often also decreases risk further. You have total control over how much risk you bear in these markets
Why HE wants to bother with your $1000 is beyond me… especially if he knows what he’s doing, like you say
Your better off both starting $500 or less fx accounts and compare notes for your losing trades. Other than that it just seems like a piggy back scheme and once the account grows I am willing to bet things will change between you two
Is the guy somebody you want to keep as a friend? Then don’t do it. There is no possibility of profit and a high possibility of emotional trauma. As someone suggested, take the money and visit a casino with your friend. Again no possibility of profit, but little possibility of a broken friendship. You might already have something more valuable than any amount of money - think about it.
The person making you this offer is not your friend.
My bigger concern is why you are ignoring your gut instincts (if it was such a sound and great offer from a “friend” you would not be here).
Advice wise, only one thing matters. Get your “friend” to sign a promissory note with respect to the entire capital you lay out or provide a contract covering the flesh you spilled above. He can lose your money in a week and say your loss is 5 pips but you will still want your money which I presume your “friend” does not have sitting in his bank account ready to cover. You’d end up taking his ass to court. No note/contract no money as judge says you accepted the nature of market risk
My favour to you in a tip - do not cut corners in Forex. The market has an imposing mountain of financial and social casualties (broken friendships and marriages) who thought the casual flirt wouldn’t hurt.
Step back and reconsider your relationship with the market.
If your “friend” does 10% a month that’ll be 100 bucks. Use 100 bucks of your own money and trade microlots and learn - better yet go and trade demo and become better than him. You have to be your own man/woman if you want to make it in capital markets using your own money.
If your “friend” is so confident he is willing to underwrite your losses, he would find $100 and trade it up to $1000 before long.
Most people who “recently started” exhibit irrational confidence. Don’t become a casualty of this my man
Because I believe there is more confidence in the fastest horse coming in at least third, then there is knowlegde in Forex trading with your friend combined.
It just dont sound right, even write it on paper, it still looks strange.
Whats this guys past results from his last 2000 trades?
Whats his strike rate?
Average pips per day?
Time in forex?
There are varibles, but with what you gave us, and how you write your threads, and the things you ask, Im on the fastest horse for 3rd place,
And, its not even a gamble, because the averages of the fastest horse coming in top 3, is prety dang good. Trust me, I followed them for 12 years before Forex…
