In this episode of Truth About FX, Walter talks about how to take advantage of other trading opportunities even if you don’t want to trade forex for yourself. He outlines several options like having a person who has good track record and tested trading system as a trading partner.

Hugh also shares his recent experience with his trading buddy and as a trend follower.

http://media.blubrry.com/truth_about_fx/content.blubrry.com/truth_about_fx/TAFX_-_EP14_Hiring_Other_Traders.mp3

Download (Duration: 05:00/ 5.72 MB)

In This Episode:

00:48 – matching up your goals

01:00 – looking to diversify

02:06 – tricky part

03:50 – savvy funds

Tweetables:

You have to be upfront about where you want to draw the line. [Click To Tweet].

Am I really gonna be able to withstand the drawdown?  [Click To Tweet].

Do not to jump into the bandwagon after a really good stretch. [Click To Tweet].

 

Hugh: Hey, Walter. How’s it going?

Walter: Great, Hugh. How are you today?

Hugh: Oh, pretty good. Today’s question is: I figure out that I’m not really interested in trading for myself but I would still like to take advantage of the opportunities in forex. What should I do?

Walter: This is a good question. From my point of view, what I’ll do in this situation is I will send people to my students who have a really good track record if you’re interested in matching up of your goals with the style of someone I know who’s quite good.

In fact, I just got this request last week where a trader that I know who actually trades quite well is looking to diversify with the money that he’s collecting. I’m hooking him up with students that I know who are consistent and profitable. That’s one thing that I’d do.

Here’s the thing — here’s the tricky part of this — you really have to be upfront about where you would draw the line and say “I’m going to stop investing in this person or in this fund or whatever.”

There’s a lot of ways to do it. Probably, when someone is first trying out they don’t have a lot of money. You have to line up with someone who’s a trader, who has a full fund that they trade but, it’s a little bit more complex. You have to be honest with yourself and say “am I really gonna be able to withstand the thirty percent drawdown or ten percent drawdown or whatever?”

Then, ask that person that you invest with historically, what’s their drawdown bond? What I like to do is trying maybe to double it or add fifty percent to that. They tell you they have ten percent drawdown max over the last five years, you might just assume that you’ll gonna hit a fifteen percent drawdown in the future or twenty percent drawdown. Ask yourself if you can sit through that.

That’s the tricky part because when it comes to managing money, the clients often will draw a straight line to the moon. They just think “okay, they made ten percent last month” or, like you’re saying, Hugh — before this, we were talking you were up seven percent this week or last w...