Personal trader: pros and cons of the service
Personal trader - is another type of classic customer-executor business model, which is used in the foreign exchange market .
In last week's article "Looking for a Trader"We talked about how investors are looking for traders to place their investments on . However, investing in the foreign exchange market is a mutual process, it involves not only the investor but also the trader. And if the investor invests his money, the trader invests his knowledge, his skills and experience of trading in the foreign exchange market.
Attracting investments for the development of your own business is a common practice, so every reasonable trader sooner or later comes to the idea of attracting investors' money for trading. What changes when moving from the trader category to the personal trader category and how does it affect trading?
Personal trader: looking for an investor on my own
To attract investments and turn into a personal trader, there are several options that have their pros and cons. The simplest is forums and specialized trust management sites.
For example, the same forum section "Looking for a trader.". After reviewing all the submitted ads and choosing an investor with suitable requirements and investment amount, the trader can contact the investor and, if an agreement is reached, receive money for trading and, accordingly, become a personal trader.
An alternative option is to post your details in the forum section "Looking for an investor.". A procedure that repeats the investor's search for a trader exactly in reverse. The trader posts data about himself and his trading, the investor, viewing this section, chooses a trader and contacts him. The result is the same - receiving investment for trading, prefix "personal".
Personal or Personal Trader service from the broker
To become a personal trader, there is another option. Now many brokers offer the service of trust management Personal or Personal Trader. Read more about the nuances of trust management on .
In order to become its participant, you need to contact the broker, provide your data, trade reports, copies of documents - each trust management platform may have different requirements.
If the trader is suitable for the company, his data is placed on the website so that a potential investor can familiarize himself with them. Ideally, the same result is achieved - investment for trading is received, the trader has turned into a personal trader.
Pros and cons of finding an investor on your own
1. When independently searching for an investor, the trader has the opportunity to choose a broker for trading and individually negotiate with each investor the terms of cooperation - the percentage of profit distribution, the acceptable level of drawdowns, reporting period, interactions, and more.
2. Additionally, the personal trader, by agreement with the investor, can add his personal funds to the investor's account, which will act as an additional confirmation of the trader's reliability.
3. Как правило, процент распределения прибыли при самостоятельном поиске инвестора для доверительного управления несколько выше, чем при участии в программе «Персональный трейдер» от брокера.
4. Naturally, it is not without its disadvantages. Investors are different people. For some people a monthly report is enough, and someone considers it his duty to bother a trader five times a day with questions "why did you open", "why did you close", "isn't it better like this...", "and I have read..." and so on. All this creates a rather nervous and tense atmosphere, which is not conducive to normal trading.
The whole point is that some investors do not fully understand the meaning of the term trust management, omitting the word "trust". An investor entrusts his capital to a trader in order for the trader to manage it, and not in order to manage the trader. As a rule, such an attitude becomes clear already in the process of cooperation, and it does not contribute to its effectiveness and long term.
5. A significant disadvantage lies in the word "independent". A trader with good communication skills and good trading results will find an investor much faster than a trader with the same or even better results, but who does not know how to communicate with investors.
6. Since communication between traders and investors is conducted on the Internet, it is not always possible to meet in person. Unfortunately, the network is full of examples of banal fraud, when the investor is left without money, or the trader is left without his profit.
Therefore, it should be noted that the independent search for an investor is a time-consuming process, and the subsequent work as a personal trader is associated with certain, not at all trading risks. An indispensable pledge of cooperation should be the legal formalization of the parties' obligations. We do not need to explain why this is necessary.
Pros and cons of using platforms for trust management
Cooperation in the Personal or Personal Trader project is quite interesting, but it has so many peculiarities that an ordinary trader does not even suspect.
1. Во-первых, в такой проект не так-то просто и попасть. Стиль торговли должен соответствовать требованиям брокера (наличие стоп-лоссов, уровень просадки и доходности и так далее), ну и, естественно, торговать трейдер должен исключительно на счетах, открытых у этого брокера. Согласитесь, трейдеру, который привык торговать у брокера «АБВГД-инвест», иногда довольно сложно торговать у брокера «ЕКЛМН-трейд» в силу различных технических характеристик торговых платформ, spreads and so on.
2. an unconditional plus is that the trader does not independently search for an investor. The investor works with the broker's manager, who offers him a personal trader in accordance with the requirements. As a result, the very communication between the investor and his personal trader is minimized, because in this case the broker acts as an intermediary.
3. very often the above described unconditional plus turns into an unconditional minus. When searching for an investor independently, the trading of a personal trader is practically unlimited, since the investor is only interested in the profit received. When cooperating through a broker, things look somewhat different.
For example, in order to incentivize an investor, a certain amount is credited to his account cash bonuswhich is turned into money only when a personal trader reaches a set volume. How can this turn out?
At direct cooperation of the investor and the trader remuneration to the trader is paid by the contractual way. At participation in the project Personal or Personal Trader, the trader's remuneration is accrued on the specially opened trading account. In practice, there were cases when the broker refused to fully withdraw the money earned by the trader, motivated by the fact that there was not enough volume traded.
4. In addition to this, the size of the personal trader's remuneration when working through the trust management platform is about 30%, while in direct cooperation with the investor it is at the level of 50%.
5. Nevertheless, the broker's intermediation is not an unqualified disadvantage. Choosing an investor independently, the trader assumes all associated non-trading risks. In the case of working on a trust platform, these risks are assumed by the broker.
If your trading on the currency market is profitable and stable, but you feel that within the current framework you are already cramped and it is time to develop, then it is quite likely that it is time to move to a new level - to attract investment and become a personal trader. And what method to choose for this - it is up to you to decide.