- Trade Like A Business
- Trading the Market Zones for a Profit
- Your Guide to Letting Your Profits Run
- Key Points to Accelerate Your Learning Process
- Discipline - Why You Don’t Have It. And How to Get It
- Transitioning from a Demo to a Fully-fledged Trading Account
- Why Traders Overtrade
- Learn to Trade the News Putting the Odds in Your Favour
- Setting Profit Goals: in Pips or Percentage Gain per Day?
- How time consuming is Forex trading?
- How to Let Profits Run?
- Get Prepared to Beat Your Previous Trading Achievements
- How to Trade the News Effectively
- Create a Trading Battle Plan
- Solution Focused Trading
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Five steps to becoming a professional fund trader
Many traders dream of becoming proficient enough in the markets to be able to work from home and provide themselves with a consistent income. My dream was to trade for a hedge fund… The only problem was that I didn’t have any Finance related qualifications and I certainly didn’t work for a bank or investment firm, so the path to my goal was sure to be an interesting one, and I wasn’t disappointed…
This article is a short introduction to the process of becoming a fund trader and trading professionally for clients, specifically if you have no prior background in the industry. Everything here is based on my own personal experience of making this same journey.
The first stage for anyone with this kind of goal is to first of all ensure their trading is in order, and this means learning methods and concepts until you find a strategy that you feel comfortable with and is going to fit in with your lifestyle, rather than the other way around.
I have met countless traders that find a trading system that sees them staying up through the night trying to trade, when this kind of behaviour is simply unsustainable over time.
Perhaps the most important element of the strategy stage is that of testing and proving the strategy before trading it live on real funds. This stage is crucial because it helps to eliminate the common killer of trading accounts, switching, when a trader trades a system for a short while until it experiences losses and then switches to another system and follows the same cycle.
Because the trader is simply trading the system to a losing position and then switching, the overall result can only be consistent losses.
Breaking this habit is, in my opinion, the single most important step any trader can make.
Creating your track record
Another often overlooked step to becoming a professional trader, which is particularly pertinent if you aim to trade for a fund or private clients, is that of creating a track record.
A track record demonstrates the performance of your trading and shows potential investors what they can expect if they decide to place some of their capital with you.
Perhaps the most important element of creating a track record is that of verifying the results within the track record so that investors can have full confidence in the integrity of the results being displayed.
Because this advice is aimed at people with little or no professional experience, and quite probably only a small amount of trading capital initially, the very best way to verify your trading results are trusted websites such as www.Myfxbook.com or www.Currencee.com where your trading account is attached to your profiling and your results win or lose are visible to everyone interested.
This small tip alone will save you lots of headaches later on, once you are trying to convince someone to place capital with you, when your word alone is not enough to secure it.
If you do not create a verified track record then this will put you at a distinct disadvantage when competing against established hedge funds with plenty of capital for professional audits.
When the time comes for you to start looking for capital and serious investors where will you turn?
Many traders, especially novices starting from the very bottom rarely have solid industry contacts that can help them onto the ladder of fund trading, so finding these contacts very early on is crucial so that enough trust is developed when the time comes to apply for capital to trade.
There are many tips and tricks to finding these contacts and the one I’ll share with you here is using professional networking sites such as Linked In and quickly establishing people within the industry that are qualified to find you trading capital.
Perhaps the most useful site for this is www.linkedin.com and when used correctly this can be a really powerful tool in connecting with professionals that can introduce you to clients with capital to invest.
Managing your image
Once trading consistently and in contact with industry professionals that can potentially bring you trading capital it is crucial to carefully ensure that your image is congruent with the service that you are offering to your clients.
This is important because when looking for a manager for their currency trading investment most clients are looking for someone that is successful, and someone that is successful has a successful image. A successful image puts the client at ease and allows them to more easily invest with you.
So what is a successful image?
There are many components to this but we will focus on the facilitation of your clients and their trading accounts here.
When dealing with a client the whole process should seem to flow like something you have done many times before, as if opening a new account for a client is something you have done many times before, even if in reality this is your first one.
It’s important to prepare the appropriate forms at the correct stage in the dealings you have, and make everything branded professionally with your company logo and that of the broker you are trading with.
There should always be an offline option for everything; doing everything electronically is certainly easier but not having offline options such as a postal address or a contact telephone number can appear ‘cheap’ or suspicious from a clients point of view, so make sure that all of these things are in place long before you need them.
Trading your clients accounts
Once you have clients and are trading their accounts it is very important that your performance is consistent with your published performance, because if there is a deviation, particularly if it negatively affects the overall performance of the trading, the integrity of your service can come into question.
Aside from this, unhappy clients will make their problems known to others, which can deter other potential investors from dealing with you in the future.
On the other hand if you have a happy group of clients that are getting exactly what they expect from you in relation to what was promised, then this can result in positive feedback being spread about you and your trading, which of course can lead to extra investment in your fund.