Can you pay someone to do your active trading for you? Yes, you can.
Some people love to trade - they love following the markets and the day-to-day work involved with trading. But it isn't for everyone. Not everyone wants to spend their time looking at the markets, and entering orders.
I like doing all this - but I am a bit of a geek. It's entirely possible you won't like doing the work of trading, but you'd still like to get the returns. You want the gain with less pain -and it's possible.
It's really common to pay people for active trading in the stock market. It's just called "Mutual Fund Investing" instead of "paying someone to actively trade a passive, low return/high risk system for me". (By the way, I don't like the word "investing" - I'll tell you why in a bit.)
In a Mutual Fund, the manager gets paid for selecting stocks, and charges fees to cover the costs of trading. So it's not much of a surprise you can pay someone to actively trade for you in other markets, too.
If you want someone to do all of the work of Trend Following for you, there are at least two strong choices:
You can hire a broker to "auto-trade" trading signalsYou can open an account and have a Commodity Trading Advisor (CTA) trade for you. Both options are more costly than doing the trading yourself. The extra costs might be worth it for you.
Entering the trades for a trend trading system is not hard work, and it doesn't require a PHD in Physics. It's certainly something most people can do if they put their energy into it.
But it does require consistent work. It does require time every day.
Some people don't feel like they have time to do this every day or they simply don't want to do the work. I don't blame them. The work can be boring, and some people just don't like doing it.
It's like changing the oil in your car yourself. It's not hard work, but there are about 1,000,000 things I'd rather do than change the oil in my car.
When I was a teenager, I changed the oil in my car myself to save a few bucks. I know how to change the oil in a car, and it doesn't take more than 15 minutes to do on your own.
But now I take my car to the quick change oil place. It's tedious, grimy work that I would much rather pay someone else to do. It costs a few bucks more to have someone change the oil for me, but it's so worth it for me.
It might be worth it to you to have someone do execute a trend trading system for you.
Auto Execution of Futures Trading Signals Many futures brokers will auto-execute a trading system for you. All you need to do is setup an account with the broker, and let them know what service you're using. They will do the rest of the work for you.
This is a good way to go if you still want to trade in your own account. You have the ability to place trades in your account when you choose.
The fees you'll pay a broker for this can vary widely, depending on the levels of service.
You'll need to sign some paperwork called either a "Letter of Direction" or "Limited Power of Attorney", depending on the exact system.
The Limited Power of Attorney gives the broker the ability to place trades in your account according to the directions given by a newsletter or other trading signal provider.
The Limited power of Attorney (usually) does not give the broker the ability to remove or transfer funds from the account. That's the "Limited" part. Please read any agreement carefully before signing anything .
You can use a Letter of Direction with a 100% mechanical system.
Commodity Trading Advisors You can also have someone simply do all of the trading for you. Commodity Trading Advisors - usually just shortened to CTA - take care of every part of the execution of a trading system.
CTA's are a bit harder to find.
CTA's can't advertise - they can only actively solicit people who have a rather high net worth. It's not like you are going to see internet advertising for different CTA's - you'll have to do nearly all of the legwork yourself.
Here is the good thing - many CTA's are trend followers.
Here the bad thing - most CTA's don't take small accounts. Many trend following CTAs end up being very successful, so they stop taking small accounts.
You'll need to search for someone who is both highly capable and just starting their trend following system to be able to invest less than $1,000,000 with a CTA. I don't like the odds of that.
If you are looking for a CTA, please let me know. You can find a list of CTA's over at a website called Autumn Gold. They have a large Buy ssd chemical in Europe list of CTA's, with contact information and returns for the last several years.
Mike
(P.S. I don't like the word "investing". Investing is a word that tricks people into thinking they are not trading, when they are still trading. Usually, if you hear someone use the word investing, you should hold on to your wallet. You're probably getting a passive, expensive trading strategy with almost no risk management.
Mutual Fund fees are actually very, very high for the service provided - as far as I can tell, there is very little or no actual risk management in most mutual funds. It's common to pay 2% fees for mutual funds - on a $100,000 account, that's $2000.
Copyright © 2012 Trend Following 101
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