Don’t bite bro lol 
1% a month??! = LOL + SMH.
I think the only way for a small trader to make it happen is to put together a consistent portfolio with a good ROI. The trader can then leverage their portfolio with a larger firm’s capital. Instead of trading with $1000 of their own money they can trade with $10,000 of someone else’s and take a small cut. Even a cut of 10% would yield 100% more on the month.
eBay has made me considerably more profit than Forex and takes much less skill and risk…There are other ways to “diversify” one’s portfolio.
See post #155.
Ok, but first thing first: For anyone to even come close to some high shot hedge fund would mean an Ivy League degree or a 1 000 $ to 1 000 000 $ track record. No hedge fund is gonna hire you without one of the former two. They have too much of their own traders these days, and even there are lay off’s in trader circles on Wall Street.
Second you are mixing the institutional trader with retail trader. They don’t have the benefit of a 1:100 nor even 1:50 leverage as we do.
Trading other peoples money, who will give you money without that track record? You need 5 years to build a good track record.
Then about the system…I never dealt with them because I’m just trading using a methodology as what you call it, and constantly adapting to the market conditions, but from what I have read there is no system that can do what you are claiming. On FF there are a couple of institutional traders and they never used any system, one even claims that he spent tens of millions of $ to try and develop the best system man can develop and all systems eventually lost money.
In the end the only reliable system these days is High Frequency Trading. Anything else just comes down to you as a trader and what you can do in the market.
You know, not everyone is cut to be an astronaut, just as not everybody is cut to be a trader. It’s plain and simple really. Someone want’s to be a basketball player and has the right physique but he is just bad with the ball on the field. And unless they make a robot out of him he will not make it. It’s the same with the markets.
Now if you have a system that works for you. I say go for it.
I guess trading OPM is the only way of really making a living trading forex. Either that or you inherit $1M+ in which case you don’t need OPM.
It is a fact there are automated systems that make 20%+ per year - year after year. For example, Jaffray Woodriff, a self-taught programmer, has averaged more than 110% per year for over a decade in his personal trading account using a fully automated system that he coded himself. I think the 3 billion in client accounts he manages earn around 12% or 15% per year but leverage in those accounts is highly restricted. Of course he is one of the best, but it proves that it’s very possible to earn 20% or more per year with an fully automated system. There are also options other than starting a fund or working for a fund to speed your success. Becoming a signal provider is an option. If we know anything, it is that the trading world is in desperate need of reliable signal providers. You don’t even need a track record. You only need a simulated track record.
And I’m sure there are that more traders out there manual trading and making 20% a month…
At the end of the day you have to do what suits your personality the best…Woodriff said in his MW interview that he’s trying to emulate Paul Tudor Jones, but that from the start he didn’t see himself trading discretionary.
+1
I think this mistake ranks right up there with the major mistakes. For both traders who give advice and traders who get advice.
Simon Templar said something one time that applies to a lot of these debates what’ better etc. You are entitled to your own opinion; but not your own facts.
You’d be guessing wrong. No matter whether you are trading one million or one hundred the answer is the same. Trading method, Money management, discipline and patience. You need to bring your A game no matter what every day. Same goes for leverage. The only difference is the numbers you’re working with.
The problem comes when you want cake and eat the cake as well. You can not make a living starting with $100, and if that’s what you’re starting with, you need to set goals that will increase your bank account and protect it as well. With a million you need to set goals that will increase your bankroll while at the same time protecting it.
If you ask most people that have been to prison; “How in the world would you do 20 years?” Most of the time the answer is the same. . .“One day at a time.” Think about it trading is the same way. So whether you start with $1 or 1 million, take it one day at a time. Before you get to a million you have to get to $200 while protecting your bankroll. That’s my 2 cents
Gp
I think this debate is just going around in circle. Discretionary trading or not. Mechanical
Trading or manual trading. Who cares. I believed there are so many ways you can make money.
Bottom line is. How much did you make this year? If you haven’t been on net positive and still on a negative return, develop and see your progress you are making. One dimensional is not going to work sometimes. Flexibility is needed as well specially if the strategy doesn’t work on occasion. A trader know how to adjust when it’s needed and not being stuck on one thing only.
Woodriff was smart enough to realize that a wildly successful manual trader like Tudor Jones is one in a billion. If Jack Schwager only wrote about system traders he wouldn’t sell any books because their stories are typically not very exciting. Most traders aren’t interested in learning programming. It’s too much work. I never claimed that you can’t make money trading manually. I only said that you can’t test a manual trading methodology the way you can test an automated system, so your odds of success are higher with a thoroughly tested system.
[QUOTE=“aceofpips;664642”]You are right. There is no consistent short term edge in forex. The most consistent way to make money here is to bank on divergent central bank policies and this could take 5-6 months and a 300pip drawdown before fruition and this is how the big players do. Now, are you going to quit or keep trying?[/QUOTE]
Absolutely truth. It’s how I trade. Stop scalping, guessing tips or bottoms. Find the long term trend based on economic divergence, wait for a nice pull back and enter a position. It’s not hard.
Matter of fact the success I have had didn’t begin until I stopped trying to use a crap ton of indicators, signals and OPINIONS from other people and instead trade price action in big movements based on long term economic waves. Anything else to me is no different than gambling. With little effort I can tell you that KISS makes more money then constantly fidgeting and making stupid trades for the sake of “trading”
You bring up a really good point regarding who’s money they’re trading. We all know it’s true, but most people are less careful with someone else’ money. The fact is, institutional traders hold trades longer than we do, take risk (perceived risks) such as buying on huge dips when most are scared etc. Its because of this that a lot of retail traders loose compared to institutional traders. Matter of fact, I can say with full confidence that I’ll never be able to get the same gains my LIVE account that I do in my paper trade account. Been trading simultaneously for over a year. One account (live) is my conservative account where it’s my real money and I am fairly accurate and make money every month. However, truth be told I tend to be less risky. I also wind up trading smaller lots even when I KNOW it’s a sure bet. On the other hand with my paper trade account, I hold longer (no emotional attachment) and a lot of times see through my trade and I have yet in the last 16 months been able to beat the returns I get on my paper trade account with the returns I get in my live account.
My goal is to run the test for 24 months, analyze my winners in my paper trade account and start to take on a bit more risk appetite in my live account to match what I am doing in my paper account…
Just my opinion though, no single trader has all the answer or can single handedly make you good… Hopefully my feed back in these forums helps at least 1 person
The best hedge fund managers actually take on far more risk in their personal accounts than client accounts because these managers have intimate knowledge and confidence in their thoroughly tested trading systems and are willing to take on more leverage and endure larger drawdowns than clients (who don’t understand the inter workings of the trading system) would accept.
If I may, let me further clarify my opinion. Hedge funds are slightly different because it’s not uncommon for a hedge fund manager to be one of the original investors (think of Soros for example). I think for guys off the street or from college who get a job trading forex for an institution the rules are different… These guys are not bank rolling 10 billion dollars, and I’d like to believe (not that wanting to make it’s truth) these guys treat their own money more carefully than of their clients… Would you agree Burt that a non-wealthy institutional trader is going to work different then a filthy rich hedge fund manager?
The problem with making statements about hedge funds is that there are so many you will be able to find a few that ‘prove’ your theory. But hedge funds come in all shapes and sizes. Jaffray Woodriff, for example, tried to start his own hedge fund 2 or 3 times with very little money. On his final attempt he took 300K of his own money and (before opening the fund to outside investors) turned that 300K into 6 million dollars in 18 months. He had no intention at that point of actually opening the fund to outside investors. He was just going to keep trading his own account, but someone heard about his success and the outside money began to pour in. Of course, when client money did pour in Woodriff was far more conservative with client funds. I don’t believe all hedge funds have magical powers the little guy doesn’t have and I don’t believe that all hedge funds are reckless with client money.
You guys are all talking here about hedge funds like you all worked there at some point in your life…how many of you actually know the inner workings of a hedge fund or central bank or some other bank for instance…
You are all just speculating like this Burt fellow…for all we know they could be throwing darts on a buy and sell chart and go with it…
Burt what are the systems they use at hedge funds? Can you elaborate on just one? What kind of risk management do they do? How many are there working in a team or individually? How are they trained? Too many questions, answers : 0
Let’s turn the tables for a moment. What exactly do you know that we should all be so impressed by? Instead of attacking people who are sharing information, please enlighten us with your vast well of knowledge.
Before the pissing contest gets too much further…
http://www.forexfactory.com/showthread.php?t=486128
An interesting read and insight into the topic of institutional traders.