Jump to content

Welcome to the new Traders Laboratory! Please bear with us as we finish the migration over the next few days. If you find any issues, want to leave feedback, get in touch with us, or offer suggestions please post to the Support forum here.

  • Welcome Guests

    Welcome. You are currently viewing the forum as a guest which does not give you access to all the great features at Traders Laboratory such as interacting with members, access to all forums, downloading attachments, and eligibility to win free giveaways. Registration is fast, simple and absolutely free. Create a FREE Traders Laboratory account here.

Trader J

How to Deal with Large Sums of Money?

Recommended Posts

With a $ 10.000 account, it seems almost everybody “knows” what to do with it. With a $100.000 account most people again know how to deal with it. A $100.000 nowadays does not seems that much money.

 

How does one trade a larger account, for example 10 million $ or 100 million $, or even more?

 

Does one just shift to a higher time frame, for example to a weekly time frame? Does one split it up in for example 10 parts and have each part traded by a different trader and strategy?

 

Is there anybody with experience that would like to share his/her knowledge? (private or public)

Share this post


Link to post
Share on other sites
...

Does one just shift to a higher time frame, for example to a weekly time frame? Does one split it up in for example 10 parts and have each part traded by a different trader and strategy?

....

 

I dont think I would try to scalp with that much money

Share this post


Link to post
Share on other sites

Generally yes - go to higher time frames which is where the real money is to be made anyway.

 

Also diversification. I dont mean stocks, bonds, cash, gold, etc, I mean if you want to go long oil, you buy futures, you buy forwards, you buy swaps, you buy calls, you sell puts, you buy shares in BP, Shell, Total, you trade anything that will give you exposure to rising oil prices with a good correlation. Of course it's a bit more planned out than slamming any market you can think of - you need to think of correlations, volatility, liquidity, open interest, average daily volumes, etc.

 

Its surprising how much extra alpha you can generate over the course of a year with careful execution.

Share this post


Link to post
Share on other sites

Well I was going to ignore this, but I have to say something

 

I thinks it wonderful to assist folks asking for help...good job...

 

Now to put things in perspective...while its POTENTIALLY profitable to place a number of positions in related financial instruments...when you do this, you incur risks....and unfortunately those risks are "non-linear" (especially if are talking about options)

 

Once again not interested in putting on a seminar...but the short version is as follows

 

If you learn enough to know that you can profit handsomely by placing a series of related positions....then you are a danger to yourself....what you need to know IN ADDITION is how to characterize the risk (all the risks that you are exposed to) and "what to do" in case things go south.....are we clear....? (probably not)....

 

OK so let me make it "crystal" clear....when you put on a series of correlated investments that include options, (especially if you sell options) you have put yourself in a position whereby you can lose not only your entire position, but much more than that.....are we clear now....?

 

No personal criticism intended Dude....one hears the same recommendation all the time from others....and why not...risk is how we make money....for the orignal poster, just be clear on what your risks really are, and learn how to manage them first....otherwise at some point you will find out what the word "surprise" really means.....

Edited by steve46

Share this post


Link to post
Share on other sites
With a $ 10.000 account, it seems almost everybody “knows” what to do with it. With a $100.000 account most people again know how to deal with it. A $100.000 nowadays does not seems that much money.

 

How does one trade a larger account, for example 10 million $ or 100 million $, or even more?

 

Does one just shift to a higher time frame, for example to a weekly time frame? Does one split it up in for example 10 parts and have each part traded by a different trader and strategy?

 

Is there anybody with experience that would like to share his/her knowledge? (private or public)

 

Reality check...an individual with $100 million dollars would not be trading with it. In contrast, he/she would retire and take it easy for the rest of their life. Further, if they do decide to try to use "a little" of that $100 million...they would most likely hire someone and that someone would recommend art collections and such.

 

I think the ceiling for an individual trader is $10 million or less. That's the amount where the trader would still consider trading. Thus, anything more than that...the individual is thinking of other opportunities that's not trading related, early retirement and pleasures.

 

With that said, with a trading accounts LESS than $10 million, most would only use a small portion (e.g. 250,000 or less) for trading purposes.

 

The rest of the money, some smart person will sniff out the trader...get married...then divorce and take whatever the trader had left that hadn't already been spent on love. That's reality. :rofl:

Share this post


Link to post
Share on other sites

This whole concept is putting the cart before the horse. After you are successful in trading you realize that you don't need 10 million or 1 million or 100 thousand in a trading account to make a damn good living. In a futures account anyway.

Share this post


Link to post
Share on other sites
With a $ 10.000 account, it seems almost everybody “knows” what to do with it. With a $100.000 account most people again know how to deal with it. A $100.000 nowadays does not seems that much money.

 

How does one trade a larger account, for example 10 million $ or 100 million $, or even more?

 

Does one just shift to a higher time frame, for example to a weekly time frame? Does one split it up in for example 10 parts and have each part traded by a different trader and strategy?

 

Is there anybody with experience that would like to share his/her knowledge? (private or public)

 

It depends. There are people or companies who chose like you suggest to 'spread' their risk by backing multiple traders/strategies. The trouble with this is trying to get a level of independence between them. I remember a big prop firm in London who had a lot of different traders but were they really doing drastically different things in the market? Apart from anything, from what I knew many of them were trading the same or similar products with size.

 

If you're just a really big trader or even otf (other time frame - the guys trading as pointed out already, over weeks and months) then I guess your major concern is your ability to enter and exit the markets. Size moves markets and traders look to piggy-back on that size. So getting involved at price levels where there is likely to be enough support or resistance to get in or out without moving the market greatly or where there's likely to be greater trading activity is likely to be beneficial.

 

Either this or you pay some quants and programmers to design some shit hot HFT and hope it doesn't do a Knight.:doh:

Share this post


Link to post
Share on other sites
This whole concept is putting the cart before the horse. After you are successful in trading you realize that you don't need 10 million or 1 million or 100 thousand in a trading account to make a damn good living. In a futures account anyway.

 

What would you suggest as a minimum to make a living trading futures with normal retail leverage?

 

BlueHorseshoe

Share this post


Link to post
Share on other sites
This whole concept is putting the cart before the horse. After you are successful in trading you realize that you don't need 10 million or 1 million or 100 thousand in a trading account to make a damn good living. In a futures account anyway.

 

Not to steer the thread away from its original thrust, but I am curious as to how much you think a skilled future's trader needs in account to make a damn good living, based upon your background in prop trading, etc.

Share this post


Link to post
Share on other sites
Well I was going to ignore this, but I have to say something

 

I thinks it wonderful to assist folks asking for help...good job...

 

Now to put things in perspective...while its POTENTIALLY profitable to place a number of positions in related financial instruments...when you do this, you incur risks....and unfortunately those risks are "non-linear" (especially if are talking about options)

 

Once again not interested in putting on a seminar...but the short version is as follows

 

If you learn enough to know that you can profit handsomely by placing a series of related positions....then you are a danger to yourself....what you need to know IN ADDITION is how to characterize the risk (all the risks that you are exposed to) and "what to do" in case things go south.....are we clear....? (probably not)....

 

OK so let me make it "crystal" clear....when you put on a series of correlated investments that include options, (especially if you sell options) you have put yourself in a position whereby you can lose not only your entire position, but much more than that.....are we clear now....?

 

No personal criticism intended Dude....one hears the same recommendation all the time from others....and why not...risk is how we make money....for the orignal poster, just be clear on what your risks really are, and learn how to manage them first....otherwise at some point you will find out what the word "surprise" really means.....

 

Sorry Steve, I dont quite get what your driving at - youre saying you've got to understand the risks right? I would have thought that was gratis. I mean you're unlikely to have $100m if you dont have a pretty good awareness of risk right?

Share this post


Link to post
Share on other sites
Not to steer the thread away from its original thrust, but I am curious as to how much you think a skilled future's trader needs in account to make a damn good living, based upon your background in prop trading, etc.

 

Define a 'damn good living' please?

 

a nice house, 4 houses round the globe.

2 cars, 20 cars?

 

You may have read the story in the papers about a trader who retired recently at 41 with 420 million. Apparently, despite his wealth, mansions around the world etc, he still wasnt happy.

Share this post


Link to post
Share on other sites
Define a 'damn good living' please?

 

a nice house, 4 houses round the globe.

2 cars, 20 cars?

 

You may have read the story in the papers about a trader who retired recently at 41 with 420 million. Apparently, despite his wealth, mansions around the world etc, he still wasnt happy.

 

Yes, that phrase can mean just about anything! If you noticed, I was repeating the phrase "damn good living" from Colonel B's post, I was leaving it up to him to define, since he was the one that used it.

 

I suspect that my definition would be less money than many posters, I don't need some huge amount of money to be happy, much more important is having control over my life and my time! I've known many very wealthy people who are miserable, including one half-sister.

 

I look forward to Colonel B's reply regarding capital, for I hear figures all over the map regarding how much capital is realistically needed in the future's market. I have my own opinion, but want to hear some additional corroborating evidence, based on actual trading returns with a certain amount of capital over a sustained period of time.

Share this post


Link to post
Share on other sites
How does one trade a larger account, for example 10 million $ or 100 million $, or even more?

 

Does one just shift to a higher time frame, for example to a weekly time frame? Does one split it up in for example 10 parts and have each part traded by a different trader and strategy?

 

I met a guy once who manages almost $5 billion (and has well over $100 million himself), the majority of which is in a futures program. They trade a lot of markets (indices, interest rates, currencies, metals, energies, and agriculturals). Their average hold time for a trade is about a week.

Share this post


Link to post
Share on other sites

Hi Trader J,

 

You can do following things.

 

1) Divide your capital into 5 parts of $2 lac

2) Diversify your investment among different asset classes like Equity, Commodity, Real Estate, Fixed Income Plans and Retirement Plan

3) Breakdown your Equity Capital into three categories as Low risk, Medium risk and High risk

4) You should use your High risk capital for Intraday or scalping, Use your Medium risk capital for Short term trades ranging from 5 days to 10 days and use your low risk capital to invest for medium term period of 3-6 months by following Warren Buffet style.

5) Invest your Commodity capital in parts i.e make a rule that you would buy Gold whenever it dips 5%-10%. Remember being disciplined is very important.

6) Invest your Real Estate capital in buying a peace of land or invest in some business which can give you regular returns.

 

Do let me know if you need any other help.

 

Have a nice day..

Pushpa

Share this post


Link to post
Share on other sites

First, you have to determine your goal. Growth or preservation or realization? From this you can start to make some decisions....

 

In general, traders with large sums of money are rightfully more concerned with preservation and as such they'll be more risk averse. Strategies generally involve diversification and risk reduction. In order to understand this, look up the utility value of money... if you have 100 million then gaining an additional 100 million isn't going to be worth as much as the first 100 million. As such, most people will be more inclined to protect the first 100 million then to gain the next 100 million.

 

In actuality you'd need a lot of money before you couldn't day trade in the futures markets.

--

Curtis

Home - OrderFlowDashPro

 

With a $ 10.000 account, it seems almost everybody “knows” what to do with it. With a $100.000 account most people again know how to deal with it. A $100.000 nowadays does not seems that much money.

 

How does one trade a larger account, for example 10 million $ or 100 million $, or even more?

 

Does one just shift to a higher time frame, for example to a weekly time frame? Does one split it up in for example 10 parts and have each part traded by a different trader and strategy?

 

Is there anybody with experience that would like to share his/her knowledge? (private or public)

Share this post


Link to post
Share on other sites

If i had a million $ ,i would have invested it in multiple investments ..20% in real estate ,20% in hedge fund or mutual fund, 20% in stocks ,20% in options and 20% in forex/commodities...

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.


  • Topics

  • Posts

    • I am willing to share the subscription cost. Let me know if you are interested 
    • My guess is that the COT numbers are based on Tuesday figures. So a weekly chart wouldn't distinguish between the different numbers on Monday and Tuesday.
    • 4 months in and Marketsmith has done really NOTHING for me......still waiting for that stock that will make the year worth it and pay for the $1500 dollar price tag......the paper has become virtually useless......especially since I used it for Political mostly political reference with Issues and Insights.......the rest of the paper is mostly geared to Stock advisers.....not the regular guy........way to boring saying nothing but how to treat guys like me.........this could be my last year.
    • Date : 22nd July 2019. MACRO EVENTS & NEWS OF 22nd June 2019.No deal Brexit risks will continue to unsettle markets next week as the two candidates hardened their rhetoric in end stages of the party elections. The ECB however will stand out as the event of the week,with Brexit uncertainty an important part of the overall outlook. Have a look at the most important events of the coming days in our usual weekly publication. Tuesday – 23 July 2019   The announcement of the next Prime Minister of the UK – Event of the week – Original Brexit campaigner Boris Johnson remains the front runner in the race and is widely expected to be confirmed as the new Prime Minister next Tuesday. Housing Data (USD, GMT 14:00) – A steady rate is anticipated for existing home sales in June at the firm 5.340 mln pace seen in May. The median sales price is estimated to ease to $275,000, for a y/y gain of 0.4%, down from 4.8% in May. In Q1, we saw an average sales pace of 5.207 mln. In Q2, a better 5.297 mln pace is expected. Wednesday – 24 July 2019   Services and Manufacturing PMI (EUR, GMT 07:30) – Preliminary Composite PMIs for Eurozone and Germany are expected to fall in July, to 51.8 and 52.5 respectively, while the Manufacturing PMIs are forecasted at 48.0 and 45.4 respectively. Services and Manufacturing PMI (USD, GMT 13:45) – Preliminary Manufacturing and Services PMIs are expected to decline in July, to 50.4 from 50.6 and 51.0 from 51.5 respectively. Thursday – 25 July 2019   German IFO (EUR, GMT 08:00) – German IFO business confidence is expected to slip to 96.7, after it held steady the past 2 months around the 97 barrier. Event of the week – Interest rate Decision and Conference (EUR, GMT 11:45) –The ECB is meeting on July 25, – shortly after the confirmation of the new PM in London and ahead of the Fed, which is widely expected to cut rates again at the end of the month. On balance, markets see more merit in keeping official rates unchanged next week, while moving to an official easing bias and promising that rates will be at “current or lower” levels well into next year. ECB Monetary Policy Statement (EUR, GMT 12:30) -The July meeting will clearly be a “live” one with doves and hawks battling it out over when to deliver the now widely expected easing measures. It is expected that the majority will see more merit in keeping policy settings unchanged, but change the guidance to introduce a clear easing bias. Durable Goods (USD, GMT 12:30) – Durable goods orders are expected to rise 1.0% in June, after a -1.3% figure in May. Transportation orders should rise 2.7%. Boeing orders rose to only 9 from just zero in May, with weakness due to the hit from problems with the Boeing 737 Max that prompted buyers to delay new purchase commitments. Vehicle assemblies should ease to 11.1 mln from an 11.3 mln pace in May. Durable shipments are expected to rise 0.5%, and inventories should rise 0.6%. The I/S ratio is expected to hold steady at 1.67 since April. Friday – 26 July 2019   Gross Domestic Product (USD, GMT 12:30) – Gross Domestic Product is expected to grow 1.8% in Q2, with a sturdy 2.4% growth rate for final sales thanks to solid growth rates of 3.9% for personal consumption and 4.3% for government purchases, alongside a big $27 bln unwind of the Q1 inventory pop. Always trade with strict risk management. Your capital is the single most important aspect of your trading business.Please note that times displayed based on local time zone and are from time of writing this report.Click HERE to access the full HotForex Economic calendar.Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!Click HERE to READ more Market news. Andria Pichidi Market Analyst HotForex Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
×
×
  • Create New...

Important Information

By using this site, you agree to our Terms of Use.