You got me a bit confused now TN7 - your earlier posts seem to refer to serious size, a need for good levels of scalability in the future etc, but yet you appear to be scratching around talking about the types of shop that look a bit low end for all of this.
That's why I call it homework. I won't know who is low-end until they reveal themselves to me as being low-end (or, until I uncover them as such). All I did was quickly scan the site - I have several leads for Prime Broker.
Then you start talking about starting a serious search for a good prime broker later on in the year.
If the truth be told (and I stated this in another thread on this forum), I really don't need to leave the so-called "Retail" world of FX. The reason is simple: Leverage. FX Leverage has allowed me to grow my capital geometrically. Can't produce the same growth curve on what Deutsche Bank, Cita, UBS, etc., provide their so-called "Institutional" customers.
I think I made two posts stating that I'm approaching the $17MM level. Deutsche Bank requires $25MM just to get "credit approved" - whatever the heck that means (Sarcasm intended). At $25MM, I am the one who should be running 'credit checks' on the BANKS! Not them on me! In my phone conversations with Deutsche Bank about their AutobahnFX platform and in my phone conversations with UBS about their "new and improved" trading platform, it was almost as if they were telling me that they would prefer that I go through a Prime Broker, rather than the legal minutia that would be required to establish a relationship with them. That tells me that they don't like dealing with "new money." They would prefer working with household names and not private individuals of high net worth.
But, it also makes sense, too. Through a PB, I get access to multiple, deep liquidity pools and a choice of trading platforms that better suit my needs. But, most importantly (at least to my mind), I can retain a higher grade of leverage, while keeping my margin requirements well below that which most of the Banks I know would necessitate. Relatively higher leverage coupled with relatively lower margin requirements equals an opportunity for geometric growth of capital. I can trade on AutobahnFX at what amounts to approximately 10:1, which is precisely what will slam the door on my current growth rate.
When I began looking into Institutional account requirements, I began to realize that I'd have better opportunity to sustain my current growth levels (or, close enough) by going Prime Broker instead of straight Bank. But, even that remains to be seen, as I won't have made enough PM contacts until later this year to know for sure. Once I have the data from both side-by-side to study, then I can make a decision.
Most Retail Traders don't have this headache - and yes, it is definitely a headache. I like my growth rates and I don't want to be forced to give them up, just so I can proudly say, "I trade direct with a Global Bank." Big deal, if my growth gets stunted. And, yes, I know the ultimate market limitations - I can't grow this way forever, else I become the market - not going to happen.
I would like to push the edge of the envelope on getting $1 - $2 BLN under private management across a 52 trade schedule each year (52 trade profiles launched per year). But, that is of course, Phase 3 of my three (3) stage plan. Right now, I'm still in Phase 1, which is to get to $225 MM as quickly as possible. Then, I can slow things down a bit and give-up leverage for more stabilized and slower growth rates, because the cost basis per trade profile will be large enough to sustain a good overall rate of growth that I'm comfortable with on an annual basis.
1) What size are you currently trading?
Typically between: $100k - $5.2 MM (cost basis/equity in position) per week. However, this figure depends heavily on the strength of the trade signal. The system determines the cost basis in the trade and which pairs will participate in the weekly profile.
2) How are you executing (physically i.e. platform etc and also what is your trading and execution style)?
Signal generation is 100% automated. Trade execution is 100% manual. I fly the aircraft. The system engineers the Flight Plan and sometimes acts as the auto-pilot once the cruise profile begins at altitude. But, typically, I hand fly the aircraft from departure to landing, including all ground operations.
Ultimately, I make the decision on all flight cancellations, aborted take-offs, emergency procedures after take-off, in-flight emergencies (including emergency descent profiles for: fire, engine out or rapid decompression) and all aborted landings including holding-pattern procedures.
3) What are you looking to scale up to in the medium term size wise (say 6m out)
That's about where I am right now (cost basis/equity in position) at the top-end, but as I said, the system can downgrade anything at anytime. My current notional range is about the $550MM level (max) but, I have not seen a ton of those over the past 4+ weeks, given the systematic downgrading that I've seen lately. There's a lot of downgrading going on right now. However, all that says is that there is something about the market that the system does not like. She's being very protective right now and I like that about her.
The JPY is causing most of the problem, I suspect - but that's another thread.
4) What makes you think you're going to need this scalability?
I figure that if I can reach the $1-$5 BLN (notional) range, then I could generate between $7MM to $35MM per round trip/per week with the same model and just a few tweaks to make it work.
Taking the average of that range puts the weekly run at about $21MM or $84MM per month. At that clip, 11.9 months would put $1 BLN net/net in hand and about one year later, $2 BLN.
I can take care of all my other non-trading related projects (non-profit) with a stable $1-$2 BLN (equity) annually through 52 small trades per year. The rest would be simple math at that point. Once you have capital in this business, it is far easier to make more of it. Growing it, is the hard part.
I have no problem answering these questions as they only describe some of my goals and only small portion of what I'm actually doing to date.
Did you read the article?
TradeSMART, by Managing your Positions. :smart:
