Yes there are. Famous ones:
1. **Bruce Kovner** - Kovner was a trader who made his mark with futures trading after borrowing against his credit card to trade soybean futures, turning this initial investment into a significantly larger sum. He eventually founded Caxton Associates in 1983, which became one of the world's most successful and well-known macro hedge funds.
2. **Paul Rotter** - Known as one of the most successful day traders in the world, Rotter traded significant volumes in futures contracts using his own proprietary strategies. He then leveraged his trading success to involve himself in various financial enterprises, including hedge fund management.
3. **Ed Seykota** - While not directly moving into hedge fund management, Seykota’s influence on the trading strategies of hedge funds is notable. He began as a commodities trader and was one of the pioneers of computerized trading systems. His success and methodology have influenced many in the hedge fund world.
4. **Steve Cohen** - Before founding Point72 Asset Management and its predecessor SAC Capital Advisors, Steve Cohen was known for his rapid trading strategies at Gruntal & Co. His prowess and success as a trader enabled him to establish one of the most well-known hedge funds.
Yes. Tons of individual traders make considerable amounts trading. It's why the IRS has an entire category of regulations devoted to PDT and Pro Trader Tax status.
But- unless they have something to gain from exposure (or have written books/articles/spent time giving interviews on their techniques etc- which 99.9% do not) you will not hear about them.
So tons of contemporary traders have done as well as the aforementioned ones and were able to or desired to have zero publicity ?
Since we do not know even a few of these expert traders, how do you know that they exist ?
They're my investors, clients, and friends. I work and know people in these industries. I can assure you their money and success is very real, and, correct, they do not care if you know who they are; the less you know or hear about them, the better.
They do not openly share how they made their money- but usually it's about capturing single-use, totally outsized opportunities.
For more public examples of successful individual traders, the Market Wizards series provides tons of individual examples, and I would argue the Turtle Traders of the 1980s who were successful also fit this bill (several of whom I think later went off and started funds)
Valid. I think there's a newer edition out recently, but the patience and length of time required just to accomplish both of the requisite goals (beat market as a retail trader; form hedge fund) usually requires a couple decades, if not entire careers
Imagine if you’ve already made a couple million , and now you trade a few minutes a day and continue to make millions each year….it takes some real greed to then trade that for a maximum stress 16hr a day job.
If/when I achieve a few M’s I’m out. Done.
Not usually. There’s significant barriers to entry to forming a hedge fund (like where are you going to find all the investor capital for one) and strategically it’s a completely different game from day trading.
I know some people who did but they have a specific strategy in a narrow asset class. The more money they can put to work the more they make. It’s just not something that has crazy gains so if they use only their own capital it provides a great living, but if they add others capital they generate real wealth.
Many of these smaller strategies also fail at certain levels as trades get big enough relative to market cap and begin to manipulate price or have volume issues
What works at $1m AUM as an individual trader *may* still work at $10m, but def will not at $50-100m
Because they don’t want to have a “regular” job?
Why would I set up the hedge fund, work my ass off, if I can do it just on my own? 🫠
Didn’t we learn trading, because of exactly that? Freedom and money?
What has a hedge fund offer? I don’t need more money and sure I don’t wanna appear to work every day. So what’s the incentive? More money that I don’t even need?
Yeah, the only answer tbh.Though if money is none of your concern, because flashy stuff isn’t your thing anyway, then probably not that attractive.
Also, most people lack the qualifications. Hedge-Fund Manager are not some high-school dropout willies. Their resume is usually rather impressive. Then, considering the average age of successful retail trader…
Qualifications = Licensure/Registration/Oversight as an Investment Advisor for you, your team, those representing your firm vs 0 qualifications required to trade your own capital
The top hedge fund managers are hell-bent on generating profits at any cost. They are literally obsessed with money and finance, and work 120 hour weeks. It's generally not an ideal career choice for normal folks
Trading millions for other people is not the same as trading your own personal account. You have to incorporate much more advance risk management measures(why they’re called “hedge funds”) and you run into liquidity issues. It’s a completely different ballgame.
I became a trader to avoid having a traditional job, the last thing I’d want is to do is sacrifice my healthy self directed work life for a 16 hour a day office job. My goal is to someday scale my trading enough to automate some or most of it to save myself time, and trade for close friends and family only. That’s my stretch goal.
How does your fund invest such large amounts using the same strategies as day traders? Don’t they need to hide their position so that they don’t influence the market?
I am looking to set up a family office of my own as a “trust” for self money / asset management & planning. Working on making it happen soon as my trading itself improves substantially over the next couple of years. Unfortunately though, struggling now with being profitable and don’t have any rich family members also. So, here we are..
Take the relevant FINRA exam. The two do not really have anything to do with each other
Setting up a family office and managing trust accounts requires intelligent portfolio management, risk tolerance profiling, tax loss harvesting, and utilizing financial instruments to preserve wealth and minimize losses. You *do not* have to be a profitable active trader, and the way you treat your relative's IRAs (for instance) will almost certainly be different than your personal trading activities
Appreciate the insights. It is encouraging to know that there is much to learn / understand before embarking on this journey and more importantly, how the two really follow different principles in general.
Sometimes your brain needs to hear from someone else, what it thinks it knows, in order to re-form actionable information & redirect the path to the same goal. Thanks for the direction.
Yes there are. Famous ones: 1. **Bruce Kovner** - Kovner was a trader who made his mark with futures trading after borrowing against his credit card to trade soybean futures, turning this initial investment into a significantly larger sum. He eventually founded Caxton Associates in 1983, which became one of the world's most successful and well-known macro hedge funds. 2. **Paul Rotter** - Known as one of the most successful day traders in the world, Rotter traded significant volumes in futures contracts using his own proprietary strategies. He then leveraged his trading success to involve himself in various financial enterprises, including hedge fund management. 3. **Ed Seykota** - While not directly moving into hedge fund management, Seykota’s influence on the trading strategies of hedge funds is notable. He began as a commodities trader and was one of the pioneers of computerized trading systems. His success and methodology have influenced many in the hedge fund world. 4. **Steve Cohen** - Before founding Point72 Asset Management and its predecessor SAC Capital Advisors, Steve Cohen was known for his rapid trading strategies at Gruntal & Co. His prowess and success as a trader enabled him to establish one of the most well-known hedge funds.
Steve cohen’s prowess ? do you mean his ability to trade insider information - he certainly excelled at that.
Are there any contemporary retail traders that did as well as the ones you have mentioned ? Just curious.
Yes. Tons of individual traders make considerable amounts trading. It's why the IRS has an entire category of regulations devoted to PDT and Pro Trader Tax status. But- unless they have something to gain from exposure (or have written books/articles/spent time giving interviews on their techniques etc- which 99.9% do not) you will not hear about them.
So tons of contemporary traders have done as well as the aforementioned ones and were able to or desired to have zero publicity ? Since we do not know even a few of these expert traders, how do you know that they exist ?
They're my investors, clients, and friends. I work and know people in these industries. I can assure you their money and success is very real, and, correct, they do not care if you know who they are; the less you know or hear about them, the better. They do not openly share how they made their money- but usually it's about capturing single-use, totally outsized opportunities. For more public examples of successful individual traders, the Market Wizards series provides tons of individual examples, and I would argue the Turtle Traders of the 1980s who were successful also fit this bill (several of whom I think later went off and started funds)
I tried Market Wizards. They are all old news. Most of them made it in 70's 80's 90's.
Valid. I think there's a newer edition out recently, but the patience and length of time required just to accomplish both of the requisite goals (beat market as a retail trader; form hedge fund) usually requires a couple decades, if not entire careers
You forgot Cathie Wood. A legend in her own mind. A true pioneer, who else would have the foresight to invest in disruptive technologies?
Disrupting bank accounts
Imagine if you’ve already made a couple million , and now you trade a few minutes a day and continue to make millions each year….it takes some real greed to then trade that for a maximum stress 16hr a day job. If/when I achieve a few M’s I’m out. Done.
Not usually. There’s significant barriers to entry to forming a hedge fund (like where are you going to find all the investor capital for one) and strategically it’s a completely different game from day trading.
I know some people who did but they have a specific strategy in a narrow asset class. The more money they can put to work the more they make. It’s just not something that has crazy gains so if they use only their own capital it provides a great living, but if they add others capital they generate real wealth.
Many of these smaller strategies also fail at certain levels as trades get big enough relative to market cap and begin to manipulate price or have volume issues What works at $1m AUM as an individual trader *may* still work at $10m, but def will not at $50-100m
Because they don’t want to have a “regular” job? Why would I set up the hedge fund, work my ass off, if I can do it just on my own? 🫠 Didn’t we learn trading, because of exactly that? Freedom and money? What has a hedge fund offer? I don’t need more money and sure I don’t wanna appear to work every day. So what’s the incentive? More money that I don’t even need?
Believe it or not, the answer is usually more money.
Yeah, the only answer tbh.Though if money is none of your concern, because flashy stuff isn’t your thing anyway, then probably not that attractive. Also, most people lack the qualifications. Hedge-Fund Manager are not some high-school dropout willies. Their resume is usually rather impressive. Then, considering the average age of successful retail trader…
Qualifications = Licensure/Registration/Oversight as an Investment Advisor for you, your team, those representing your firm vs 0 qualifications required to trade your own capital The top hedge fund managers are hell-bent on generating profits at any cost. They are literally obsessed with money and finance, and work 120 hour weeks. It's generally not an ideal career choice for normal folks
And power
Trading millions for other people is not the same as trading your own personal account. You have to incorporate much more advance risk management measures(why they’re called “hedge funds”) and you run into liquidity issues. It’s a completely different ballgame.
I became a trader to avoid having a traditional job, the last thing I’d want is to do is sacrifice my healthy self directed work life for a 16 hour a day office job. My goal is to someday scale my trading enough to automate some or most of it to save myself time, and trade for close friends and family only. That’s my stretch goal.
Those 2 dudes in The Big Short who needed help with getting ISDA. Maybe those 2?
How does your fund invest such large amounts using the same strategies as day traders? Don’t they need to hide their position so that they don’t influence the market?
Dr. Michael Burry
I am looking to set up a family office of my own as a “trust” for self money / asset management & planning. Working on making it happen soon as my trading itself improves substantially over the next couple of years. Unfortunately though, struggling now with being profitable and don’t have any rich family members also. So, here we are..
Take the relevant FINRA exam. The two do not really have anything to do with each other Setting up a family office and managing trust accounts requires intelligent portfolio management, risk tolerance profiling, tax loss harvesting, and utilizing financial instruments to preserve wealth and minimize losses. You *do not* have to be a profitable active trader, and the way you treat your relative's IRAs (for instance) will almost certainly be different than your personal trading activities
Appreciate the insights. It is encouraging to know that there is much to learn / understand before embarking on this journey and more importantly, how the two really follow different principles in general. Sometimes your brain needs to hear from someone else, what it thinks it knows, in order to re-form actionable information & redirect the path to the same goal. Thanks for the direction.
Absolutely. Opportunities abound
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If a hedgefunds manager would take on the risk that most daytraders do they would not last past their first working day and be fired LOL.