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Would you trade with a relatives money?
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Would you trade with a relatives money?

  #21 (permalink)
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kevinkdog View Post
but I'm guessing that is in the top 1 or 2% of traders.

ya i don't really know about that either. my mentor just wanted to make sure so that i follow through to the game plan.

more often than not when i'm really green, once i enter a trade - set my TP and SL, he would told me to get out of the room and come back later when the trade has been completed. this was a real trade with real money and im not allowed to see how it develops until it has been really over. i guess i learned discipline with his weird method?

anyway back to the topic - what artemiso & GFIs1 said would be applicable if my counter party is reasonable and would share the same concept with me. maybe im being selfish but i really wanted to do this independently. just enjoy my youth and my trading. be able to take vacation when i wanted it without somebody pestering me how their money is doing. one thing i cant accept is when im falling sick the first question asked by this particular family member is: so when are you going to resume your trading. i almost said something inappropriate to someone whose age is double from me.

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  #22 (permalink)
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jacqudy View Post
If you want your family to benefit from your trading, why not just give them cash? Or pay off their house. Or buy them medical insurance. Send 'em on a cruise. That's my plan once I've scaled up and taken care of my own.

But to expose their older, more brittle sensibilities to the risks that have taken me years to weather and put into perspective? That would be pretty inconsiderate and irresponsible.

+1

I agree completely and really subscribe to that !

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  #23 (permalink)
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mwtzzz View Post
Shouldn't trade with any money you can't afford to lose. In my opinion, any money you put in a trading account should be earmarked "for disposal." This is a way of recognizing and taking responsibility for the unpredictability and volatile nature of the markets.

This has nothing to do with this topic, did you even read the question?

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  #24 (permalink)
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@artemiso, I have witnessed personally and agree that in some situations trading OPM can be very beneficial for a trader. I am primarily talking about something like TopstepTrader but I've also known other situations such as being fronted sizable funds from a non-family member/non-relative.

But I think it is different once a relative is involved.

In the case of an unrelated source of funds, let's say a multi-millionaire who has staked you 50k, you can clearly demonstrate your past results, clearly demonstrate the risk and agree up front it is a business transaction.

But with a relative, that is virtually impossible to do. If you lose them money you are going to feel responsible for it. It is not possible to have the same "business transaction" mentality (both parties) when it is family.

So I think this thread is all about relative's and not just general OPM.

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  #25 (permalink)
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kevinkdog View Post
You need to be congratulated for doing 8-15% per month, consistently. That in itself is pretty remarkable, regardless whether you share with your relatives. You should be starting a fund instead!

how many months in a row has that figure been happening? The answer says a lot: if it's three or four months, it's not statistically relevant. In other words it has little to no meaning going forward. On the other hand, If it's like two years or more through different kinds of markets, then it probably means something.

Actually its not time which is relevant, it's how many round turns you do. But most people don't realize this, they quantify their results in terms of time.

I'm not saying this to be a killjoy, but as a word of caution that you cannot say anything meaningful about a trading strategy based on a small number of trades. You literally have to look at the results from several hundred trades in order to have a good idea of where it stands. People often don't realize the large effect from chance/unpredictability in their results. For a small number of trades, there is no way to distinguish whether it was the result of chance or the result of any "edge" in the trading system.

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  #26 (permalink)
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mongoose View Post
This has nothing to do with this topic, did you even read the question?

Maybe I misinterpreted the OPs question, but it seemed that he's worried about losing his relatives money? My post addressed that issue. If anybody gives you money to trade, they need to understand and accept that it can be lost. Anybody who trades also needs to accept and understand this. My take on his post was that this was one of the things of concern ... I mean, this thread is in psychology and money management ...

Maybe I'm wrong?

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  #27 (permalink)
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IMHO

If you are a rookie, take only $2-5 K and tell them you will stop and reassess your edge after losing 50%.
Losing is very likely at the start. The money should be a gift and not a loan. A loan is undo pressure
to perform. The key is to have the mind free to react purely to the market. Especially stops in
price action based locations, Not in pain thresholds. Trade a market that you can risk 1% per trade
using a correct stop.

If you are a pro, take the money. You have already been psychologically purified in the crucible
of extensive live trading. At this point cash is cash. The money should still be a gift, so if lost, there are
no beaming glares around the Thanksgiving table.

In either instance, if you find yourself successful, I would place a little aside each week and
pay the $ back... with interest.... a perfect Christmas gift

Then, perhaps, a business arrangement could be discussed to lever up with a larger fund.

The lender should always be advised it all can be lost. No refunds.
Make sure the lender is mentally stable.
Make sure YOU are mentally stable.


AJ
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"Life On The Edge of SR"
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  #28 (permalink)
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It depends on a few things:

How much money they have
How much of it they want to invest
Their personality

If the person involved have $10M US and they wanted to throw $500k in the pot AND they are fairly streetwise, then I'd do it.

If it's someone with $50k and they wanted to give me $20k and I knew they would be a bag of nerves - no way.

In all cases, it would have to be a split. The poll mentions borrowing money from a relative and doing it for their benefit. I'd do it for mutual benefit.

DT

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  #29 (permalink)
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Poll closed, results:

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Mike

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  #30 (permalink)
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I think the fact that you're using borrowed money will screw up with the mind and cause losses

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