How to deal with large sums of money? - Psychology and Money Management | futures io social day trading
futures io futures trading


How to deal with large sums of money?
Updated: Views / Replies:2,489 / 12
Created: by Trader J Attachments:0

Welcome to futures io.

(If you already have an account, login at the top of the page)

futures io is the largest futures trading community on the planet, with over 90,000 members. At futures io, our goal has always been and always will be to create a friendly, positive, forward-thinking community where members can openly share and discuss everything the world of trading has to offer. The community is one of the friendliest you will find on any subject, with members going out of their way to help others. Some of the primary differences between futures io and other trading sites revolve around the standards of our community. Those standards include a code of conduct for our members, as well as extremely high standards that govern which partners we do business with, and which products or services we recommend to our members.

At futures io, our focus is on quality education. No hype, gimmicks, or secret sauce. The truth is: trading is hard. To succeed, you need to surround yourself with the right support system, educational content, and trading mentors – all of which you can find on futures io, utilizing our social trading environment.

With futures io, you can find honest trading reviews on brokers, trading rooms, indicator packages, trading strategies, and much more. Our trading review process is highly moderated to ensure that only genuine users are allowed, so you don’t need to worry about fake reviews.

We are fundamentally different than most other trading sites:
  • We are here to help. Just let us know what you need.
  • We work extremely hard to keep things positive in our community.
  • We do not tolerate rude behavior, trolling, or vendors advertising in posts.
  • We firmly believe in and encourage sharing. The holy grail is within you, we can help you find it.
  • We expect our members to participate and become a part of the community. Help yourself by helping others.

You'll need to register in order to view the content of the threads and start contributing to our community.  It's free and simple.

-- Big Mike, Site Administrator

Reply
 
Thread Tools Search this Thread
 

How to deal with large sums of money?

  #1 (permalink)
 Vendor: www.futrac.com 
Paphos, Cyprus
 
Futures Experience: Advanced
Platform: CQG;Genesis Trade Navigator
Broker/Data: RJ O'Brien
Favorite Futures: Futures
 
Trader J's Avatar
 
Posts: 15 since Apr 2012
Thanks: 0 given, 10 received

How to deal with large sums of money?

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)

Reply With Quote
 
  #2 (permalink)
Quick Summary
Quick Summary Post

Quick Summary is created and edited by users like you... Add FAQ's, Links and other Relevant Information by clicking the edit button in the lower right hand corner of this message.

 
  #3 (permalink)
Elite Member
@ Germany
 
Futures Experience: Beginner
Platform: NinjaTrader
Broker/Data: Mirus Futures/Zen-Fire
Favorite Futures: FDAX
 
Posts: 441 since Nov 2011
Thanks: 254 given, 369 received


I can only speak for futures trading - but i think that you can invest/parking huge amounts of money in the stock market. It's hard to place the full amount in futures trading accounts, because you can't scale up unlimited due to leak of counterparties and market impact. As you say you should extend your number of instruments and use ALL timeframes. Spread Spread Spread! My solution was from going from minute based trading to range bars based trading.

But you really don't have a problem! You could ask any big financial adviser and he would show you all the worlwide possibilities to invest your money. You can only trade a little fraction of the whole amount.

Reply With Quote
 
  #4 (permalink)
Elite Member
Luxembourg
 
Futures Experience: Advanced
Platform: NinjaTrader
Broker/Data: IB / Kinetick
Favorite Futures: ZN
 
Fadi's Avatar
 
Posts: 482 since Apr 2012
Thanks: 650 given, 625 received

Diversify to the max, stocks, bonds, currencies, and futures to say the least. but also real-estate, metals, and so on...
Such amount of money should not in my opinion be traded in its totality in the markets, rather just a small part.
With such amounts you can also negotiate interest rates on saving accounts with banks, and it doesn't harm either to block some for a guaranteed annual return even though it is much lower than you would get with trading.

Of course you can move to higher time frames, but for me the same logic holds on any amount and any chart and time frame.
Max 10% of capital on any position, and max 1% of capital risked on any instrument.
I determine my position sizes as such. And if talking of margin instead as in futures, then margin requirement shall not exceed 10% of capital per position.

Finally, I would be dedicating a fair large part of the portfolio to dividend plays and long term blue ships ownership "à la Warren Buffet" if you want. This guy really knows how to make money ;-)

Just my 0.02
Cheers

Successful people will do what unsuccessful people won't or can't do!
Reply With Quote
The following user says Thank You to Fadi for this post:
 
  #5 (permalink)
 Vendor: www.traderrach.com 
Auckland, New Zealand
 
Futures Experience: Master
Platform: MetaTrader
Broker/Data: Pepperstone
Favorite Futures: Forex
 
TraderRach's Avatar
 
Posts: 21 since Oct 2012
Thanks: 8 given, 26 received

How To Trade Large Trading Capital Sizes

Hi TraderJ.

With large trade sizes it usually takes a team of people to keep the money fully employed.
  • Different strategies - a variety of strategies and timeframes so funds are employed at different price levels
  • Different markets - funds can be utilized around the clock, for example, on the DAX, FTSE, ASX - different exchanges at different times of the day (there is usually some market open)
  • Different people - with so much going on it's usually too much for one single person to trade the whole amount, so a team of people will be required otherwise performance may drop off

With that level of funds you can afford to employ Quantitative Analysts to thoroughly test the strategies. However, with testing comes a whole stream of limitations. However, with large trade sizes it's good to know you're starting with the expectation of a good system edge.

With the forex market there is no central exchange. Theoretically you can trade with different brokers accessing different liquidity pools and not compete with yourself. Because the prices slightly differ by broker the same strategy may yield slightly different price levels when strictly applied.

With that amount of capital it's a good idea to diversify yourself with more than one broker so that should something bad happen on a trade, the broker goes bust, or some other poor broker performance issue, you are not left at a moments notice moving that size of money to another broker. Time out of the markets can be costly.

All the best.

Cheers Rach

Reply With Quote
The following user says Thank You to TraderRach for this post:
 
  #6 (permalink)
Market Wizard
Las Vegas, NV
 
Futures Experience: Advanced
Platform: Abacus, Slide Rule, HP-65, Metastock, TOS, NT
Favorite Futures: Futures
 
aligator's Avatar
 
Posts: 3,424 since Aug 2010
Thanks: 1,053 given, 5,822 received
Forum Reputation: Legendary


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

@Trader J,

As most everyone noted, diversification is the key, and we already know that (so, talking in general). But then it depends on who owns the money and what the objectives are. If it is Romney's Company, they would go into venture capital and buy and salvage rundown companies. Statistics of car junk yards are amazing; they make huge money buying a car $100 or tow it for free and sell hundreds and thousands in parts. A person I know sold his ten pizza shops and bought a car junk yard operation.

On a not so adventurous side, an Apple employee with million$ of AAPL shares is more likely looking for capital preservation with a reasonable return to beat the inflation. He may diversify into a few retirement funds that will mature on his retirement and beyond, invest in prime waterfront real estate properties (yes, they can wash away, but somehow they retain better than relative value) and use a safe chunk to trade if he has a big ego. In real estate these days, cash is king.

There is no safer place to invest money anywhere but in USA for long term, just due to the sheer size, might, and resources. Despite all the current problems, USA would be the Last survivor of any global financial collapse (provided we learn to be frugal). Europe's past colonial powers are now consuming wealth gained from their colonial era and as we see are falling one after another as their carrying capacity tips down. So, I will only invest in mighty $.

If one has that much money and wants to play it safe, one has to invest in basic things that people need. These are food, energy, basic minerals, materials, or collectively put - Commodities. That is how Jim Rogers is adding to his millions, by trading for long term, and not day trading. He spends his time spanning the world with fancy toys.

A local Fidelity or Schwab shop in neighborhood shopping center would be more than glad to draw a free plan for any one with a big chunk on money.

May the Million$ keep coming.

Reply With Quote
The following user says Thank You to aligator for this post:
 
  #7 (permalink)
 Vendor: www.futrac.com 
Paphos, Cyprus
 
Futures Experience: Advanced
Platform: CQG;Genesis Trade Navigator
Broker/Data: RJ O'Brien
Favorite Futures: Futures
 
Trader J's Avatar
 
Posts: 15 since Apr 2012
Thanks: 0 given, 10 received

How to deal with large sums of money?

I would like to thank the futures.io (formerly BMT) members that responded to my question.

There is some food for thought which will keep me busy in an evolving process. I will stay open-minded for suggestions.

Thank you!

Reply With Quote
 
  #8 (permalink)
Elite Member
Washington DC
 
Futures Experience: Beginner
Platform: NinjaTrader7
Favorite Futures: ES
 
Posts: 71 since Oct 2010
Thanks: 98 given, 76 received


Trader J View Post
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)

Hedge funds. They have a lot smarter people who can, like someone else said, engage in different investment strategies that are a lot more complicated than most people can understand or even know how to implement. They can also pretty easily swap large lots of stock with other investment houses which makes volume on stock charts look high, but if you are in the "know," it is inconsequential.

Reply With Quote
 
  #9 (permalink)
Elite Member
Dartmouth NS
 
Futures Experience: Intermediate
Platform: MC, MC.Net, NT, TWS
Broker/Data: IB / IQFeed / Kids
Favorite Futures: Forex, stocks
 
bnichols's Avatar
 
Posts: 638 since Feb 2010
Thanks: 64 given, 459 received

One extremely opinionated fund manager I read from time to time appears to manage accounts of that magnitude by treating currency and commodity markets like a massive range trade, presumably because in theory currencies and commodities are unlikely to "go out of business" and tend not to stray too far from some median except over very long time frames (decades). It looks like e.g. he begins acquiring inventory on some basis (i.e., via a system that may have a relatively blunt edge) in a series of 10's if not 100's of purchases when prices are seriously (historically) oversold and starts unloading what may amount to 10's or 100's of 1000's of contracts when prices inevitably begin to reverse, selling all the way up (and vice versa for short trades).

I suppose his heartfelt opinions and predilection to share them about politics, the markets and the economy stem from self confidence that in turn comes from making money

Reply With Quote
 
  #10 (permalink)
Elite Member
Philadelphia
 
Futures Experience: None
Platform: corded black telephone
Favorite Futures: ticker tape
 
Itchymoku's Avatar
 
Posts: 2,892 since Apr 2012
Thanks: 1,681 given, 3,622 received


Go On Vacation

Reply With Quote

Reply



futures io > > > How to deal with large sums of money?

Thread Tools Search this Thread
Search this Thread:

Advanced Search



Upcoming Webinars and Events (4:30PM ET unless noted)

Jigsaw Trading: TBA

Elite only

FuturesTrader71: TBA

Elite only

NinjaTrader: TBA

Jan 18

RandBots: TBA

Jan 23

GFF Brokers & CME Group: Futures & Bitcoin

Elite only

Adam Grimes: TBA

Elite only

Ran Aroussi: TBA

Elite only
     

Similar Threads
Thread Thread Starter Forum Replies Last Post
The Ascent of Money - The Origins of Our Feast or Famine Money System Victory Trader Off-Topic 2 October 8th, 2012 04:34 AM
Deal or no deal, Iran may be bombed – Israeli minister kbit News and Current Events 0 May 23rd, 2012 08:53 PM
Why is Jon Corzine still at large? GridKing News and Current Events 5 March 28th, 2012 07:07 PM
How to identify large trades? PeterOhlson The Elite Circle 9 September 7th, 2011 11:50 AM
LAW OF LARGE NUMBERS tigertrader Psychology and Money Management 15 December 28th, 2010 02:51 PM


All times are GMT -4. The time now is 11:37 PM.

Copyright © 2017 by futures io, s.a., Av Ricardo J. Alfaro, Century Tower, Panama, +507 833-9432, info@futures.io
All information is for educational use only and is not investment advice.
There is a substantial risk of loss in trading commodity futures, stocks, options and foreign exchange products. Past performance is not indicative of future results.
no new posts
Page generated 2017-12-17 in 0.15 seconds with 19 queries on phoenix via your IP 54.221.73.186