Please email me with any additional questions you might have, which are not answered below. It will help me to keep this page updated for everyone.
1. What is the difference between the Trading account and the Investment account?
As the names suggest, the Trading account (@charityhedge) is for shorter term trades, where I try to capture technical setups. It may be in the same direction as my main positions in the Investment account, or counter to it. Trades are trades: some work out great, some don’t and I take my loss and move on. The Investment account (@chfinvest) is mainly long assets, sometimes hedged, but very rarely overall short. In the Investment account I try to beat the return on the S&P 500 by investing in a combination of stock ETFs, individual shares and fixed income and changing the allocation percentages between them to better time the market. I also run several option overlays to maximise returns. In the Trading account I try to take advantage of any setups that I think are attractive, with no overall benchmark to beat. The Trading account will trade almost daily, if not several times per day. The Investment account is quite passive and will trade not more than a couple of times per week, if at all, if we are in a strong equity or fixed income trend.
2. Do the Trading and the Investment accounts trade different instruments?
Yes. The Trading account uses mostly futures and options on futures. The Investment account uses mostly equity and fixed income ETFs (from all over the world but all traded on US exchanges) and options on those. They also have very different timeframes. While the Trading account might be short to medium term, the Investment account is very long term. Trades in the Trading account can be even intraday or for 2-3 weeks maximum, while the Investment account can keep core positions for years and hedges for many months. The adjustments here will be mainly in reducing or increasing leverage at swing points or when my models indicate Risk Off periods. You can follow some of the "run dumb" models on Riskdials.com
3. Do you post rationales behind your trades/positions?
Of course. I post regularly what my opinions are and why I hold them, together with charts and videos of why I enter a trade, and where the stop-loss to it should be. You are also welcome to ask questions on the relevant Twitter feed.
4. Do you trade a lot of options?
Yes. They provide the ability to enter positions with less risk and the ability to leverage without undue risk. If you are uncomfortable with options, or shorting options (writing), this is not the place for you. Or it could be a great place to learn how to employ them to your advantage.
5. What will I learn?
First and foremost: trade structure. Anyone can go long or short outright or leveraged. That takes very little skill. What takes skill and experience is the ability to structure a trade to minimize the downside while keeping most of the upside potential of the trade. Secondly: stop positioning. Thirdly: patience. Most people have far too little of it and their returns suffer as a result.
6. What broker do you use?
I use Interactive Brokers for both the Trading and the Investment accounts. I find that they provide me with the ability to trade all the instruments I wish to trade and provide pretty good options software to enable me to research strategies. All the snapshots/screen captures I post and the daily broker statements are from IB. But no, I have no affiliation with them. I just like their platform.
7. What do you trade?
I am a macro driven trader. In the Trading account mostly futures and options on futures on bonds, equities, currencies and gold. In the Investment account I mostly position ETFs on Fixed Income and Equities and individual equities, with a smuttering of options for protection, should I deem it necessary. A list of futures contracts I mostly trade can be seen here.
8. What kind of returns do you generate?
My trading tends to be pretty non-aggressive. My margin/equity ratio never rises above 30-40% and my leverage is hardly ever above 120%. Positions offset each other to maintain a very high Sharpe Ratio and low volatility of daily returns. I shoot for mid-double digit returns in both accounts per year, which is a reasonable return to average on a consistent basis with low volatility. But I will take what the market gives. Anyone looking for more should really not look to me. I am not a gunslinger. I am a professional who has been doing this for over 35 years without ever even getting close to a double digit drawdown on a monthly basis. For the innumerable people asking for precise numbers: I can make anything up, can't I? As it is not audited, what is there to stop me? But a good guide to returns is here. And in life there are no sure things. Suck it and see, as they say. No one who has followed me for years is disappointed. Come into the room and ask them.
9. Why $250,000 and $1,000,000 as account sizes?
Because I wanted this to be available and useful to a wide audience. I consider $250,000 to be about the minimum for a serious trading account. If you have more, you can easily multiply the size to arrive at the appropriate allocation for that account size. If you have $1m, all you have to do is multiply by 4, etc. The Investment account is larger because it holds mainly unleveraged positions and is designed as a "pension acccount". $1m is a nice round number and is easily divisible or multipliable by anyone wishing to replicate it.
10. How do I subscribe to your service?
Simply by filling out the Subscription Form. You will be asked to set up your reoccurring payment instructions via PayPal. You are free to discontinue your subscription at any time by simply cancelling your monthly payment instructions.
11. For how long must I commit to subscribe?
There is no "commitment". You are free to cancel at any time. However, it would be a waste of your time and money to just follow for a few weeks or months. You will learn next to nothing and you will invariably miss exciting investment opportunities.
12. It sounds like a lot of money!
Could not disagree with you more. Any CTA, hedge fund, wealth manager or private banker would charge you much, much more. Granted, you will be doing the work yourself. But the hard part is not in the execution, that should take you no more than a few minutes in total per week. The hard part is in the timing and here you will have someone much better that you can possibly find out there on your side. Naturally if you have a tiny account, it is a lot of money. But this service was not designed for people with tiny accounts.
13. Do you do FREE TRIALS?
No, I don't have the time to administer that. But for people who wish to see what and when I post, I will upload on a quarterly basis all the tweets on the Broker Statements page. That way you can download everything: the tweets, the broker statements and the resulting performance. Better than a time limited free trial, as you can see a much longer timeline.