Hedge fund traders/decision makers here?
Trading has been my life for over 10 years now. I’ve got my masters in finance from a top college. I know several programming languages. I know machine learning and statistical analysis. I’ve worked at one of the “big 4 top banks” (non trading roles but semi mid-level roles). Eventually I left the bank to work on building my own track record bc as I said, trading has been my passion. I absolutely crushed the market.. made about 800k off 10k investment (thousands of trades over a course of 2 years, smooth equity curve.. small drawdowns). The goal was to build a track record and then get a job as a trader at a hedge fund bc I don’t really want to work out of my lonely office for rest of my life or build my own investment management company. So here’s the problem:
1)getting a job at a hedge fund: I’ve been applying for the past 4 months. I’ve had zero calls back. What gives?? I’ve been around the finance industry for a long enough time to know that my returns are better than 90% of traders. I did manage to get a hold of one recruiter and he basically said.. hedge funds only hire from another hedge funds and that bc I’ve traded a much smaller account than traders at hedge funds. SURE. I’ve traded a smaller account and that’s BECAUSE NONE HAS GIVEN ME A CHANCE!!! The most frustrating part of it all is that when you actually look at many of these traders at these firms.. it’s amazing how half of them are coming with liberal arts degrees.. but somehow manage to get a trader role within 5 years post graduation. What gives? Why can’t I get a chance? BTW- I trade foreign exchange markets so liquidity isn’t an issue for me nor am I day trading.
2)Start my own company..: I’ve reached out to many investors that heavy pockets... nobody cares... I haven’t traded a larger account. And I come from a fairly poor family & friends and I can’t really “tap” into daddy’s investment funds either....
So like seriously... what does it take man? And pls don’t come back with... oh I had to be graduating from MIT with PHD in both mathematics and physics and had been previously been a rocket scientist who walked on the moon and then flew to mars and came back and now trades from Venus. That is b-s bc I’ve looked at my competition on LinkedIn... most of these dudes arnt the smartest people or with the most accredited backgrounds
hegde funds look for all different types of relative value traders / strategies that have proved performance at scale.. Your size / strategy seems more in line with a prop shop....so i would suggest you go that route.
Can your strategy work with just CME FX futures?
I sort of just threw term “hedge fund” blindly. I’ve had the same results with prop shops/hedge funds/CTA etc. And no, my strategy is mainly traded on spot fx... because commission cost is cheaper on spot vs futures and risk can be managed proportionally rather than the fixed contracts notionals offered in the futures markets. What is your background?
i am a rates prop trader (i traded at a bank on a rates desk before i went prop). I worked in IT at a bank before i started trading, and i did some work for the FX desk so i'm familiar with a handful of FX bank traders, and i have some 2nd and 3rd degree connection to some others. Depending on your strategy, i might be able to make an introduction. I'm not asking for the secret sauce....but how many pips is your avg win / loss, and how many trades do you make on an avg day? How many pips is your stop/loss? How long do you tend to carry positions, etc...?
That’d be great! Good question.
My avg win/loss is 5:1. My avg holding period is 1-3 months. I reinvest my unrealized profits as the position moves favorably. My stoploss is risk based rather than a fixed pip.. ie.. my position size decreases if the stoploss is wider and increases if my stoploss is narrow. I can actually send you my disclosure document that has not all the secret sauce but enough for you to understand my underlying reasons behind my executions. I’ll send you a PM. Can you actually send me a PM instead? I can’t because I’m a new user and I have to wait 2 days!
for some reason...i can't send PMs either.
However, the 1-3 month holding period won't fly at the bank FX desks anymore. They are more intraday flow traders than position traders (that's more a macro hedge fund). On a % basis, you must go thru drawdowns. What has been your max intra-trade drawdown? What was your worst drawdown (pips and % AUM) and time to recover from that? Can you insert an image of your daily returns?
for your position hold time...i think you would actually be better off doing FX strategy at a bank (and in the meantime, start a public blog /email service and flood the market with your ideas...just like a strategist would)...which will allow you to create a public track record as an "in" for the macro hedge funds. Or, you can try to goto a multi-manager fund...but they have very tight risk limits (1% daily stop loss...5% yearly stop loss)...so you would have to trade so much smaller than you are accustomed to, to prevent getting stopped out.
yet you say that you have 1-3 month holding period (as per above)?
Also, you managed to turn 10k into 800k over the course of two years, that's a realized yield of 220% (continuously compounded, not that it matters). Since your holding times are 3 month, you have zero capacity constraints. Why look for a job? You will playing with billions soon enough.
Hi RealityCheck2201. First of all, congrats on your achievement! Hope I perform like that someday. Just out of curiosity, if you have the skill to turn 10k into 800k, why not just keep doing what you are doing and live off of it? I mean 800k is not a small amount of money and like you said you trade fx so scaling is not an issue, right? I guess if you grow your account a little more at the current return rate, you might as well invest it in Treasuries and forgot about it. Thanks and best of luck.
That’s a really good point. I think everyone has different goals and aspirations. My goal is to have 100m+ under management one day. Hire people, give back to the community etc. As lucrative as it may sound to work for yourself.. trust me it’s a blast at the beginning bc you have no boss, you set your own schedule, you can travel etc.. over time it gets boring. I need human contact. I mean I have friends and family but nearly everyone you know will always be working a 9-5... so 80% of the time if you’re working for yourself.. you basically are isolated and on your own island. And the other thing for me is that, for whatever reason, I have it in my head that I haven’t “made it” until I get hired as a trader by a hedge fund/CTA and trade their funds... it’s just a dream ive has for the past 10 years.. hence all the hard work I’ve put in it to try and prove to the world that I am worthy of this position... but yea..I’m very much close to just giving up on that and continue to leave my systems running for my personal account In the background and put my focus on other projects outside of finance. Hence this post... other reason is... I understand how unpredictable markets are. I’m not someone to ever say “oh I’m good and I can make money in the market” nor would I think ANYONE can say that.. anyone who says that... hasn’t been around the market long enough or is flat out lying. Why risk your own capital when you can risk investors capital? I think that’s the ultimate goal for any trader.. to trade investor capital... 20% performance fees for a 100m is much more than a 100% gain on 1m. So to bring it all together lol.. getting a job at a fund that manages tons of money would allow me to be more marketable in the future for my own fund... I mean that’s the only reason I spent 100k for my masters so I can be more marketable... learned NOTHING during my masters TBH
Ok I see... thank you for sharing your perspective in detail. It is really interesting to hear that from a person who I think "made it" (=know how to trade well). Surely, money is not everything, and no man is an island!
You are off-base. A lot of the macro guys started out on their own funds or funds of a partner or two. Ptj did that and even after he launched for years he invested $1 for every $2 he raised.
If you are as consistent as you say you are then a hedge fund wouldn’t make sense. They will only pay 15%.
If you turned 10 into 800. Then now with 800 you should be able to put up another 800-1.6 a year and grow organically. You can do that at a prop firm too. Plus trading on your own you get special tax rates. You can reduce your taxes down to like 25%. If you are at a fund you are most likely in a high tax rate paying ordinary income.
Start to do that math in order to have the same take home pay at a fund....assume they pay out 15%. You need to be up about 9 million to make the same after tax you make if you are up 800k in your own.
To take that hit you need to explain the resources a fund would provide you besides prestige. since you already have a bankroll.
You need to explain why you want to share alpha with a fund. And there are good reasons. Just tax inefficient.
i agree with commenters recommending a prop shop/bucket shop. There is substantial risk, and the payout compared to risk is not great, but if you believe in your strategy, it is a good way to start out. Why should an established fund take a chance on your strategy if you won't? A few years and some good luck at one of these shops and you can either get your foot in the door with larger funds or attract your own investors.
If i could turn 10k into 800k
I could turn 800k to 8mill
and repeat
Then start your own hedge fund
How old are you? If age isn't a factor, then why not repeat and start your own fund after another 10 years?
Without a verifiable track record, I throw monkey at you, if you have a verifiable track record then I think you are competent, I throw a golden banana.
Perferendis ipsam labore quis velit ad. Est reprehenderit voluptas voluptas. Sunt omnis rem dolorum quas enim quae porro. Consequatur animi qui aut. Fuga facere nostrum id culpa magnam. Eos ex dolores consequatur nostrum voluptatem ut ad velit.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...