Question of the Month, August 2008

[Dollar-Reaper]

John,

That's hard to say from the info given. I don't know if this guy has a trade plan and wants to adapt traders to it or if he wants to take good traders and make them into a better team. Each concept does have its merits.

The Turtle Traders were taught to follow a strict and successful set of rules for options trading. In the Diamonds room, I've seen Sir Pips and others work together to do more than each could alone. Of course, I'm sure there are more than enough examples of abysmal failures with either concept too.


$ Reaper,
Self-respecting brokers are always happy to have someone else manage accounts at the brokerage. Some may require a minimum level of qualification or registration, but most don't. They just want as much money in the system as possible. Of course, the bucketshops prefer that whoever is trading the accounts to be losing, since this benefits them more.

Personally, I prefer to make or lose my own money, but there are a lot of people out there who are more than ready to turn control of money or an account over to an account manager.



Of course, the question on the table today isn't whether someone should do this, but how could a person best approach doing this.

Pharaoh, Yes, thank you. I have just returned from a trading break, lots of exciting things are happening and I am happy to be back.
You are absolutely correct, in that context; and I fully supporter your way of thinking. My statement was more in the context of my own situation as a single trader, rather than a firm.
I think your own statement also supported this view that you prefer to loose or make your own money.
It is strange how most people would hardly trust their bankers, or insurance brokers to manage their money, but they will give a forex or a managed brokerage carte blanche, it simply floors me!

 

[Pharaoh]

I am similarly floored. Look at the number of people who have lost their life savings to HYIPS that promise impossible returns. The very fact that HYIP rating sites rate on "Still paying" vs. "not paying" should trigger all sorts of alarm bells.

People need to do proper research before trusting money to any company.

Hopefully, the person who submitted the question is honest and wants to create a good service.

 

[Ken Long]

I have a question relating to this. If one were to do this on a personal level, not as a company with employees, or a trading group, just as an individual managing multiple accounts for family and freinds. Is there a particular broker that anyone prefers and recomends. I know of a few that offer this ability, but I havent compared the services yet. Mostly I was wondering if one broker was better set up and easier to work and manage multiple accounts from.

 

[Dollar-Reaper]

Ken, I think Pharaoh is better equipped to deal with your question. I for one would never recommend a broker to somebody else. I think it is one of those choices you have to come to terms with yourself after doing proper research. Recommending is risky, but there again, so is managing accounts for family and friend. My opinion.

 

[Ken Long]

Ken, I think Pharaoh is better equipped to deal with your question. I for one would never recommend a broker to somebody else. I think it is one of those choices you have to come to terms with yourself after doing proper research. Recommending is risky, but there again, so is managing accounts for family and friend. My opinion.

Reaper,

I wasnt asking anyone specific, and I wasnt expecting any specific answers. I was just putting the question out there to see what opinions lurked. This is something I have looked at in the past and continue to be interested in, but it's more of a long range goal for me.

As I think I mentioned on this thread, (or maybe anouther), my idea of managed accounts is to grow my primary trading account to the size where I can divide it and create accounts that I manage for several others. I havent reached this point yet, but I am working on it and looking at the possibilities, and several brokers seem to offer tools to assist in managing multiple accounts. I'm not sure how far these tools go, or whether one has a better system for this than the others, but it is a definate interest..

 

[Pharaoh]

I think Ken's question is a good one. If someone wants to recommend one or more brokers, they can do so. I never recommend a specific broker, since with my luck I'd make the recommendation the day before the CEO raids all the accounts and retires to Tahiti.


What would be needed is a broker that is as honest as possible, and that makes trading multiple accounts as easy as possible. A lot of MT4 brokers support methods to trade multiple accounts simultaneously, and there are similar tools at many non-MT4 brokers. You should also check what the broker would require in terms of an LPOA, even if you are only trading for friends or family members. For some, it could be a simple 1 page form that's faxed or emailed in. Others might require a lot of paperwork or even that the person managing the accounts be registered with the NFA (or other regulator if the brokerage is in another country).

Never try to trade another person's account or let someone trade your account without checking those LPOA requirements. If you violate them, the broker can use that as an excuse to legally cancel all the trades. Of course, this cancellation seems to have a much higher chance of happening if the account is profitable.

 

[Ken Long]

Thanks, I've never even considered what an LPOA is, or any of the legal considerations. And I certainly wasnt considering managing someone elses money. My first unbreakable rule is, dont lose someone elses money!!!

I was really considering doing this from my own funds. Its not too difficult to give someone 5K and ask them to deposit it into a trading account for you to trade in their interest.

Since anyone with a password can access and place trades on an online account, who's to say who is or isnt allowed, and how could they possibly tell who's been doing the trading?

This isnt managed accounts in the professional sense, its more like joint access accounts, where I am an invisible benefactor. The actual management of the account, deposits, withdrawls, taxes, etc would be out of my hands.


I would love to be able to show off for my freinds, perhaps pay my wife back for putting up with me while I'm learning this business, create Coverdale IRA's for the kids, and hopefully create a little extra money for everyone.