Will setting up a hedge fund be a good idea?
I have never traded real money. However, for the past three years, I have studied stock trading and developed my trading strategy on stock trading simulators, such as investopedia. My last investopedia's portfolio, which I started in April of 2015 (just 10 months ago) with initial virtual cash of $1mln, currently has an account value of almost $6mln. and annual return of almost 1,000% (mostly US stocks; long/short only; mostly trend following / momentum with using technical / fundamental screens, developed by myself at finviz and tradingview; trading in real time, on real stock prices, and with real data). This accomplishment has impressed me so much that I have decided to make it a business (I'm in Boston area). I am looking for starting financing of $1mln. What kinds of companies might be interested in funding such initiatives? Whom would you suggest me to contact first?
P.S. please, if you can:) refrain from irrelevant responses, such as why don't you find a trader job first, or why don't you get a loan from bank, relatives, or etc.
If I'm reading it right - Less than 1 year of trading 'experience' with virtual portfolio wants to set up a hedge fund
Even though I have no real-life trading experience, my common sense suggests that investment managers value their traders not for the duration and quality of trading experience per se, but for the real profits their traders bring. For my virtual portfolio, I have no more than 10-15 stocks in total at any time, being fully invested almost all the time. If I've been able to generate almost 1,000% return, turning 1mln into almost 6mln in just 10 months via long/short trades only, surfing the tides of recent market's ups and downs on simulated yet based on real prices/time trades, I'll be able to generate very high returns on real trades as well. So why not to set up a hedge fund to do in real life the very same trades I do in virtual life?
Investment managers value their traders first and foremost for their ability to use basic logic and common sense (ironically, a term that you have used). It appears to me, judging from what you have written above, that you haven't really focused on that particular aspect of your character. Your inexperience is perfectly understandable and can be easily overlooked. Your inability to appreciate the unfortunate silliness of what you have written above, well, that's an entirely different kettle of fish...
So 12 year olds playing Need for Speed should become race car drivers?
i'll put in a few dollars
how "few" did you mean?
"Accomplishment", eh?
Did you really say that you impressed yourself with your accomplishment?
Allow myself to introduce....myself.
It is said that fear has big eyes. And it is sad that your professional background and experience brings so much fear into your analysis. See my response to astfin-juki ("If I'm reading it right ...") for details.
What's your alpha?
investopedia doesn't have tools to calculate it
I can't understand anything you've said but shut up and take my money!
Virtual gains aren't the same as real market gains. Friend turned 1m into 25m in a month using a glitch on marketwatch.
This is actual laugh out loud funny.
I just joined this site, and found this thread. I'm an independent trader, and can tell you that real money trading is completely different than paper trading. When you have nothing at stake, your emotions don't come into play. I've been trading futures and futures options for many years, and both made and lost a lot over the years. I've finally gotten a handle on proper risk management and position sizing, and am now consistently making money, +140% in about 500 trades over the last 6 months.
I have no doubt there will be difference in return when I trade real money; but I also have no doubt that if my strategy, and stock picking ability, works in real-time/real-data simulation, it will work in real life. Based on how our life works, it just cannot be otherwise.
At this stage of my life, my emotions don't come into play to the levels of actually distorting my principles/logic/judgment/outcomes, whether I have anything at stake or not. It may sound blatant and unbelievable for guys like you, but it is so. It's very difficult to achieve this, but possible with a lot of practice. I cannot prove you this online - just believe me that having at stake either $1, or $1k, or $1m makes the same emotional impact on me. Since the stock picking is mostly about the level of your corresponding skills than about luck or fate, it's not impossible to remove emotions from decision making. You can read more about it in my response to Novak in the similar topic (Turning Amateur Trading Into Business) of Trading forum.
If you understood basic statistics, you'd know that with the amount of risk you'd need to take to make 10x in a year trading only stocks, your probability of blowing up and losing everything is nearly 100%. I'm hoping this is pure trolling because it's even sadder if it's real and OP actually thinks this is an accomplishment. Please go away.
I started a $1 million virtual account ten days ago and it is now worth $100 million. That is much better than your mediocre results.
I also opened 23 other $1 million virtual accounts over the past couple of years and they're all worth about $0. I guess I'm learning.
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