huge returns on managed accounts-advice needed

[Hotch]

I guess I'll try and lend support.

Look at it this way ikeano, what is his incentive here? I can only see a few options;

1-He's a scam artist
2-He's being really greedy and wants more money then the silly amounts he is making already...

...Is he really going to bother having to work with other people, and go through all the hassle, just to become a billionaire a few weeks earlier. I wouldn't. I reckon a bank, personal friends (who have so many advantages over you) or the broker would stake him, if he hasnt got money from these, then why, and if he has, he especially isn't going to bother with you. The only possible thing i can imagine, is that he needs your money now because he needs money for some live saving operation, again, someone would stake him/makes it more dodgy/etc.

3-He is penniless, has a rubbish credit rating, and no friends (to be quoted out of context for years to come)...

...I guess he could be genuine then, but then are you going to trust someone who has lost all his money and friends? Could there possible be a reason for this?

Sorry, gotto weigh in with a "it's a scam!" crew.

 

[lewtz]

This thread has been much more amusing than I thought it would be.

 

[Mathemagician]

pedro-maybe you are right,perhaps the thread titIe is a bit ott-i hadnt done a thread here before and thought that a catchy titIe wouId at very Ieast get a high IeveI of response and hence my questions answered satisfactoriIy-but i can see where youre coming from with that comment .

to adress your questions-

1)i saw an ad that he had put on an angeI investor website that i subscribe to-its a site where mostIy businesses ,start ups ,property deveIopers etc,,, advertise their proposaIs seeking in most cases seed capitaI ,expansion capitaI etc,,,for their business startup or expansion-
some days there can be 20 proposaIs by emaiI,In most casaes i just deIete as i have NO interest in investing in startups the other side of the worId,any way -i answered this one and got chatting by emaiI and skype before i asked for a reaI time demo account to be traded.
2)the broker he uses is atc,avaiI trading corporation-
they are reguIated and weII known in the industry.
the demo account was set up by them-
i spoke with the boss there and he verified that the demo account and statements that i have received are reaI-this was yesterday-he did make some other observations which are not reIevant to this forum.
3)50 k was used as starting capitaI by the demo account as i think thats a standard figure when setting up demos.
there is no arrivaI at a figure as yet-how can there be,i have not satisfied myseIf as to the authenticity of this arrangement and untiI i do ,there can be no decision on an amount to invest.
some of the accounts that he manages now started at 50 k,some at 10k.
4)i have asked the trader for his personaI detaiIs ,such as irs number adress,date of birth etc,,,, and am getting a check done on him to ensure that he is not a scammer,
aIthough the broker says that he has known him for some time it is better to run the check - the trader had no issue with giving me these detaiIs and understands why i need that done,
5)i am traveIIing over to meet him in 3-4 weeks ,i want to see the system being traded and get a feeIing for it,as i said before i have some issues with the money management ruIes being used with it and i need to understand the thinking behind those-it is too earIy for me to comment on those untiI i see the system-i aIso need to tinker with different stop ruIes and assess how those may affect potentiaI returns,

now-does anyone have any other suggestions as to what eIse i couId do to assess this -
i think that i shouId ask for the system to be automated for 2 reasons-
1-it wouId be much easier to test different money mgt ruIes and assess their impact on profitabiIity and win rates etc,,, if automated it shouId not be optimised,the broker has said that he couId do that for me ,but obviousIy i need the traders permission
2- it wouId take the emotion out of the trading,at the moment ,there may be a human tendancy to chase the market at times when it wouId be wiser not to-

any other suggestions pIease,
thanks -brian

Maybe I'm just a cynic.

Anyway Ikeano - you haven't told us as few things about your trader friend that we should perhaps know:

1 - How did he find you or how did you fnd him ?
2 - What's the name of the brokerage (this is in no way confidential nor will it lead us to your man - it's just a brokerage name).
3 - Who arrived at the sum of $50K to invest & why ?

Cheers

It's cheaper, more efficient, and more reliable to just give the guy 10k and see what he does with it.

jj

 

[Linmuppet]

Hi Ikeano,

I am pleased you put this out before you acted on it. I have been a trader for many years and am pretty sure the perfect trading system doesnt exist in the medium to long term. And the key is the timeframe. His indicators may work at the moment but I guarantee that as soon as you crack a near perfect system, the market evolves to make it obsolete. This isnt as bizarre as it sounds. When you get the market then you can guarantee others will too, or that one person will start trading large. This then affects the market, the flow, what other people are seeing and the market changes.
Shame but keeps things interesting.

Also if you cracked the market, like this guy claims he has, would you share it? Would you tout for business on the internet?

I doubt it. More likely you would share iit wth friends and family and from a small stake make a lot of money very quickly.

Finally have you considered how easy it would be for this guy to just use your money to hedge his own positions. so for example he buys 10 futures for himself. And sells 10 for you. The market goes up, he makes money - you lose money. Or the market goes down, he loses money but makes back 3 futures per point. (30%). All he needs is 4 clients and he is always a winner. (20%)

Then he could show new potential investors all the traders that went right, because when you buy and sell at the same price one of em has got to win hey. (plus the brokerage).

Save your money. If you havent got the time I agree dont do it yourself. Put it in a high risk fund if you like, but be careful its too good to be true. It is.

I have had a lot of fun over the years investing in ostrich farms (a liffe floor tip), film making companies, penny shares etc. But I ddnt make any money out of them cos they were always too good to be true.

Best regards

 

[fifty2aces]

Finally have you considered how easy it would be for this guy to just use your money to hedge his own positions. so for example he buys 10 futures for himself. And sells 10 for you. The market goes up, he makes money - you lose money. Or the market goes down, he loses money but makes back 3 futures per point. (30%). All he needs is 4 clients and he is always a winner. (20%)


Best regards

Actually, he only needs 2 clients. He can trade the 2 accounts in opposite directions, and since he takes a share of the profits, but not the losses, he can expect to make money on one of the accounts. Then once one of the accounts blows up, show potential investors the statements for the profitable account.

Alternatively, he could get some talent and either trade his own money, or go prop and get a considerably bigger profit share without the hassle of having to deal with retail customers.

 

[Linmuppet]

Good point fifty2aces.

I think we are on the same page though

regards

 

[martscan]

hi all-
hope you are all trading well,personally i never seem to have enough time to devote to the art ,so in that regard i have been seeking someone to manage an account for me,
i came across(on a wbsite that i subscribe to) a trader who is based in the usa 3 months ago,he said that he has traded eminis for the past 8 years or so and that 2 years ago ,he noticed a pattern that recurs with amazing frequency in the markets-on that basis he has honed ,tinkered with and improved the trading methodology to a point where he currently gets 90 % of his trades correct,
on that basis ,i asked him to open a demo account and trade it for a few months-so that he could prove his claims to me-he did this with an established brokerage and within 2 months had turned a demo account from 50k to 460k.
this balance did not include brokers comissions ,but i estimate that if it did ,the balance would have been 350 k approx based on comissions charged.
he sent me a number of account statements where he had done very well both trading real money and backtesting his system on an automated system.
he also noted that these were based on the original system which he had now improved,
he has now started to trade real accounts for a few people and he sends me the account statements daily ,again the results show extreme consistency and show excellent returns,
50k to 75 k in a week on one account started 5 days ago-
i am now at a stage where i would like to check out this person,
he is not sec registered as he is new to this scene and is an individual who has as he says has through years of hard work and frustration eventually stumbled across a very reliable set of indicatrors.
the deal would be that he would trade an account under a limited power of attorney agreement ,and a s ssuch he would have no access to the money in the account-he gets paid in the region of 30% of profits etc,,,
my questions are as follows
1-how can i check this guy out to ensure that he is not a scam artist?
is there an economical and reliable way of doing this in the usa?
does anyone know?
i intend to travel to meet him in a few weeks but would like to have a reliable check done on him beforehand if possible.
2-i am based in ireland-what are the tax implications on futures-is it a capital gain or income tax?
this is not a serious issue for me at the moment as i can ask a tax advisor here anyway-
q1 is more important,
3-with futures and eminis it could be possible,albeit unlikely that an account could be wiped out or even worse if the markets gapped or was suspended on a castastrophic event such as 9-11,is there any way of limiting ones potential liabilities here-i know that stop losses can be put in place but what about an llc or some such vehicle and if used what would the tax liabilities be?
i would be most grateful for your comments,
brian

Brian: Do yourself a favor and get as far away from this fellow as possible. There are several ways of checking on futures' industry participants' backgrounds, complaints, disciplinary actions, etc. via the CFTC (Commodity Futures Trading Commission) and the NFA (Natl Futures Assn.). However, if this fellow is not registered in any capacity with a regulatory agency as a Pool operator, CTA (commodity trading adviser), IB (introducing broker), etc..and he is holding himself out as an "adviser" or manager of some sort...and participating in profits...he is already illegal. Ask yourself some simple questions: These are extraordinary gains, why? Is this too good to be true? My answer is, of course.How can a trading statement NOT show commissions? What is the basis of your estimation of $110,000 commissions in 2 months? I'd say an account of $50K would pay no more than $7 a trade...more likely $3 or $4, max....call it $5....22,000 trades in 2 months? No way jose. Any account doing this volume wouldn't pay more than $1 per trade...which would make this proposition more preposterous. As to producing valid, profitable statements, it is a simple matter of constructing such an account by merely giving it the winners from discretionary accounts. You'd be doing other, unwary, potential investors...suckers...a service by reporting this crook to the aforementioned authorities.