Hi - firstly, sorry I am not spending as much time reading comments on trade journals as Id like. Still have to spend 8 hours a day at a boring job.
secondly - with only about 8 months experience I am still very much a beginner. I have made my mistakes. It wouldn’t in my mind be reasonable for me to be part of any collective project in a trading sense, but may like to be part of it from a organisational point of view, if that were even relevant. Until I have proven my trading to myself, I will keep any opinion and comment to myself in that regard. By the end of the year if I have been consistently successful and turned my balance into as much as it can become, then I may comment on trading. In the meantime its the psychology of it which is relevant to everyone, and I enjoy investigating all avenues, inclucing a joint venture.
Do you plan on trialling the cooperative trading in a demo account first - to get used to how it may work.
Do you have any rules or plans on how it may work at all,
As I write this - I think the following. To start with - how about a demo account with 3 subaccounts (or however many people are chosen to participate)
Lets say you start with a total of $300, $100 each in 3 accounts. Each trader will start off trading ONLY in their subaccount. The proof of their worth will be in what they can do with that subaccount in 2 or 3 or 4 months.
Risk means different things to different people, acceptable risk to 1 trader is not acceptable to another. If you end up blowing your subaccount - clearly Risk management was not part of your plan. This affects other traders in the joint venture.
But actually knowing what risk was involved I suppose could be witnessed on a daily basis by the other traders seeing what trades exist in each others subaccounts and what the level of risk was.
If many months had passed I guess you trust each other enough to go live, or if you chose not to wait that long, and just dive in and go live with whatever amount was agreed upon, then so be it, but trust will still need to be developed.
How will you handle one trader consistently doing very well on their subaccount and another doing a mild return. Will everyone have equal claim to an exact equal share of the profits.
Do you set aside a 4th account to actually grow the nestegg, and may not be touched by anyone?
and if subaccounts is not what you had in mind, then if trading occurs in a single account, how would you reach agreement on trade entry. may be difficult to co-ordinate mutual meetings for discussion.
Subaccounts may be more practical, because ecah trader does whatever they do best, and dont need agreement from others.
How do you control the withdrawal of funds. Lets say at some stage one trader has run into personal problems and needs to extract their share. can they? when is that an option?
If for argument you settle with 8 traders to do this with, after 6 months 2 have lost interest, 1 wants their share, 2 are doing mildly, 3 are doing well. Does this at this point represent the best that could be done with the multi trader strategy?
or more optimistically, 4 traders all doing acceptably well, after 6 months still doing well,a few hiccups, the account is growing nicely, some traders more active than others, but it doesnt matter. after 1 year, account balance quite healthy. what now, everyone happy to continue as such? for how long? when do withdrawals get done, or put more simply, when can traders start drawing a "salary"
how do you treat applications from other traders? can people join in after a year? I would guess not, unless they can buy in at the current value of 1 share. So lets say after 1 year the account is $40000 and has 4 traders. Each is entitled to $10000, so a fifth trader would need to buy in at $10000, but is the level of trust there?
The security of the venture will also need to be controlled, as you now have multiple people with access to ALL your equity. Imagine the catastophe if one person goes rogue?
Should there be an overseer? or are 4 traders able to do their duty without an overseer?
Well thats a lot to chew on. I like the idea. Its exciting and has great potential!! Lets see!
and if a trader ruins their subaccount - are they out? or can they buy their place back into the team?
Is there a penalty for not managing risk and blowing your subaccount? because really you are affecting the nest egg of everyone involved. I use the term nest-egg loosely, but you understand my meaning.
Regarding beliefs and trading, let’s see if I can say this politely and not ruffle any feathers. There is a simple common sense scoreboard in trading, the account balance is increasing, decreasing or holding flat, period. Might be valuable to base our beliefs, expectations, potential and goals on how many points we’ve scored, not how many we think, hope or dream about.