Can you take the 'Hedge Fund Challenge' ?
Everyone probably knows someone who claims to be an awesome trader, constantly boasting about their bottom line, or their hit rate or the risk/reward they 'always' get.
We know it's not true and probably just think 'uh huh ?' before moving on. This post is for those boasters, an opportunity to prove it. I call it 'The Hedge Fund Challenge'.
In a previous post I mentioned some stuff about hedge funds, who they are and what they do. The challenge is easy > If you're such a shithot trader/investor/gambler then why aren't you working for a hedge fund or investment bank trading millions ?
Serious retail traders know the only way to make money is to have more money. And when you get to a certain point and you're making profit, you realise the only thing holding you back is the amount of capital you have to invest. That's where financial institutions can be helpful.
The ultimate goal of a lot of traders is to work for an investment fund and trade a $100M+ account. And it's surprisingly not that difficult to achieve ! (providing you can prove you're a successful trader of course). It's a well worn path for many good retail traders.
If you claim to be making 1000% returns every week/month/year then why are you wasting time pissing around with a tiny retail traders account ? Wouldn't you rather be making hundreds of millions a year instead ?
If you're making more than 10% ROI per year, approach a hedge fund and ask them for a job. One years worth of trading history will certainly get you a telephone interview. Three years of trading history with your claimed 1000% ROI and they'll probably give you a $50M account right there and then !
Of course, you have to prove your success, you can't just claim it. You need a record of all the trades you took, the profit and loss. But most importantly, the reasons you took each trade. You can't just say, "I guessed and got lucky" or "I just followed what people on the internets said". You need to be able to prove you made good solid decisions that made consistent profits.
Even if for some reason you can't get a job at a hedge fund or similar (perhaps a criminal record or you live in another country) then sell your skills as a copy service. If you have a proven track record of making lots of money, people will pay a lot of money to copy your trades, even hedge funds and investment banks. You'll earn the same amount of money from renting out your skills, and still work for yourself.
So next time you hear some fantasist boast about how great they are, and how much money they make, and how many Lambos they have (lol) then ask them why they're not working for a hedge fund already and making 100x what they're making now. Why are they selling training videos for $20 each ? Why are they begging for upvotes on internet forums ?
So am I good enough to work for a hedge fund ? Perhaps... but I wouldn't last two minutes. Retail traders have one advantage over hedge funds and that's the ability to set our own risk management strategies. But when you're trading other peoples money, you need to control losses strictly. They'll have a dedicated risk manager who oversees all the trades and if you go over you're limit, you're out. No matter how good you are or how much money you make, it's that brutal.
I'm personally just not good enough a trader to work at a hedge fund. Sure, I can beat a lot of them on ROI but my risk level is way outside what they'd call acceptable. I would be sacked on the first day... I just don't have that level of discipline, I wish I did.
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hhhmmm. You make some good points. Honestly if there were really rich people who work on hedge funds they will likely not even come to steemit. The rate of earning on here far behind what they would likely make if they were working in a hedge fund.
I don't think anyone on Steemit earns more money than if they were just in a regular job working in an office somewhere. I guarantee that 99.9% of people here earn less than minimum wage on Steemit.
It's definately a hobby, not a career :-)
this is so true. I am now on here more to do with social blogging than anything else. I am giving up on the earning passive income on steemit. Realistically not going to happen.
If you have enough money to invest in Steem then you could do what other people do, buy votes and self upvote and get a positive return. Has to be quite a lot of money though I think.
That amount of money I would likely never have anyways. So going to do it the old fashion way. Work and save on steemit. I hope by the time I die I can have something to pass on to my children. ;)
Just give them advice, advice is free :-)
I am going to start telling people about my Lambo. I don't have one, but I say it enough, people will think I have one and give me enough money to buy one. I am going to hedge stupidity. I think that is a commodity that is predictable. I think you would agree.
Doesn't have to be a Lambo, just keep posting this -
"crypto is mooning today ! in fact, all crypto everywhere always moons every day !".
You'll get rich just as quick... ;-)
Very true. There is a whole business built around people trying to appear to have the "secrets" to trading. I have seen so many times people guaranteeing 30% gains per month. If I invested €100 at that rate, I would be more wealthy than Warren Buffet in just a year. This is a good test & it's also an interesting point you made about the trade off between trading in a hedge & trading for your own capital. Although, more capital will be gained, you will always have to trade something whether it be your personal schedule or some of your independence. Nice article. I will give a resteem.
Yeah the maths isn't too hard to work out when you calculate compounding.. it's easy to spot the fake claims.
One of my favourite adverts at the moment is a YouTube one about 'trading the London daybreak strategy' where you can 'make up to $5000 every day !'... So why only $5000 ? if it friggen worked then you could win any amount a day lolol.
Thanks for the resteem 8-)
Maserati's, Boats, Women (or dudes), vacations. I'll admit, I was sucked into that "lifestyle" when I first started trading. I wanted to trade from some remote topical paradise like they did. 30 minutes of market action in the morning is all it takes and you're done for the day! :)
All those promo vids are fake as shit. They hire a villa and a car for the weekend and take multiple changes of clothes and shoot a whole series in a couple days. Interviews in different rooms, with different clothes on. It makes it look like it's over a whole year, a 'lifestyle', but naturally it's all a con.
You can make enough money to live on a beach somewhere, but that's 'end goal' for most people, not starting out :-)
Great and informative post.