#002: BUILDING A HEDGE FUND #1: FROM $2.000 TO A PRIVATE HEDGE FUND
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DISCLAIMER:  Futures trading systems and commodity trading bear a high degree of risk. People can and do lose money.
Hypothetical results have many inherent limitations. Past performance does not guarantee future results. 

 

ACTUAL RESULTS SHOULD BE VIEWED WITH CAUTION, BECAUSE PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. HYPOTHETICAL PERFORMANCE RESULTS HAVE MANY INHERENT LIMITATIONS, SOME OF WHICH ARE DESCRIBED BELOW. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN. IN FACT, THERE ARE FREQUENTLY SHARP DIFFERENCES BETWEEN HYPOTHETICAL PERFORMANCE RESULTS AND THE ACTUAL RESULTS SUBSEQUENTLY ACHIEVED BY ANY PARTICULAR TRADING PROGRAM. ONE OF THE LIMITATIONS OF HYPOTHETICAL PERFORMANCE RESULTS IS THAT THEY ARE GENERALLY PREPARED WITH THE BENEFIT OF HINDSIGHT. IN ADDITION, HYPOTHETICAL TRADING DOES NOT INVOLVE FINANCIAL RISK, AND NO HYPOTHETICAL TRADING RECORD CAN COMPLETELY ACCOUNT FOR THE IMPACT OF FINANCIAL RISK IN ACTUAL TRADING. FOR EXAMPLE, THE ABILITY TO WITHSTAND LOSSES OR ADHERE TO A PARTICULAR TRADING PROGRAM IN SPITE OF TRADING LOSSES ARE MATERIAL POINTS WHICH CAN ALSO ADVERSELY AFFECT ACTUAL TRADING RESULTS. THERE ARE NUMEROUS OTHER FACTORS RELATED TO THE MARKETS IN GENERAL OR TO THE IMPLEMENTATION OF ANY SPECIFIC TRADING PROGRAM WHICH CANNOT BE FULLY ACCOUNTED FOR IN THE PREPARATION OF HYPOTHETICAL PERFORMANCE RESULTS AND ALL OF WHICH CAN ADVERSELY AFFECT ACTUAL TRADING RESULTS.

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#002: BUILDING A HEDGE FUND #1: FROM $2.000 TO A PRIVATE HEDGE FUND

An interesting thing happened to me in February 2014. I was just sitting on the roof of famous Marina Bay Sands Hotel in Singapore - the one with the big rooftop pool. I observed this modern, breath-taking city from above and thought about the limitlessness of human creativity and human possibilities. Building something amazing like that needs not only financial means but also courage, diligence, perseverance, and vision.

 

I was on a 100-day cruise around the world and we stopped in Singapore for 3 days.  The more time I spent in this ultra-modern city that doesn’t have any “boundaries”, the more I felt the strange inner satisfaction about the fact that a man can really create absolutely anything: futuristic gardens like the ones in Avatar movie, beautiful parts of the city that used to be just a sea a couple of years ago and incredible wealth in a place that only had small importance a couple of decades back. Is it really possible that a man can really create anything he wants? Is it possible that the only boundaries are in our heads?

 

My answer is conclusive YES. It’s been my life motto for my whole life and, by following it in the last decade, I’ve evolved from an inexperienced and frightened trader with a 2.000 USD account, living in a constant fear that I could lose all the money anytime, into a completely free man who lives (thanks to trading) a life that he had never dreamt of.

 

If a man can do whatever he wants to (I already live the life of my dreams), what should my next life goal be? Why don’t I keep on moving ahead? Why have I stopped moving forward and become satisfied with my current status? Is this caused by getting lazy as soon as we reach a certain financial level? Or when we have all our dreams fulfilled, should we leave off dreaming and planning a better future?

 

As I thought more and more about these questions, I had to admit a fact: My professional life was losing power. I started to live my trading life by the rule “if it is not broken, don’t fix it” (sometimes I didn’t even fix the things when they started falling apart), I started to reconcile myself with the fact that I was an average guy (this might be because I come from a post-communist country called the Czech Republic, where mediocrity is exalted and success is punished). Financially, I was doing OK, I wasn’t missing anything and even though I had on my list millions of other things I couldn’t afford, I wasn’t sure if the extra effort was worth it. I was on a luxury cruise around the world, had lobsters almost every day for dinner and on the land I slept in the best hotels. What else could I ask for? Am I ungrateful for what I already have when I start to think to get a little higher? So why doesn’t this city let me relax, makes me feel a constant shiver I haven’t had before?

 

And I suddenly realized what was behind it: this city has something which I also used to have, but I’ve lost it in recent years of financial stability:  a vision, a challenge, an urge to go further, not for money or fame, but for the sake of myself by feeling I can overcome  obstacles, win and move my inner boundaries further. Also, this vision would let me be more creative, find new ideas, use ways that I’ve never used to build something new from the beginning, meet new people, involve them in this project, try to change their lives for better future and, most importantly, grow as a person through experience, whether it’s good or bad.

 

It made me think what could my next vision be. I found out pretty fast that I’m not particularly skillful. In little over a decade, I got some insight and experience in trading, learned something new, understood new things but didn’t get many others ( but it isn’t that bad overall ). I’m also able to motivate other people and give them a push to reach their dreams. But with time, I’ve realized that I don’t really enjoy doing this. Most people just passively wait for someone to keep pushing them and to do the work for them, and they do nothing - just enjoy improving life standard while being pushed by someone else without taking life into their own hands. I’ve  come to the conclusion that I should let people do what they want to do and let them live their own lives in their own way.

 

So, what should I do? What should be my next vision? What am I good at? Is there anything like this?

 

After a little bit of self-brainstorming, I had to admit that there is one thing I really excel at: I have a highly creative mind and I can bring up new and original ideas (especially in trading) and implement them afterward.

 

I really like getting new ideas. I love it. Even if 99% of my ideas turn into worthless shit ( I try to call things by their right name ), my brain is still capable of generating new and new ideas 24/7 and, unlike other creative people, I’ve learned how to implement them and make them happen. This was the good news for me - I’m worthy and I have something to build this new vision on.

 

That day I started to toy with an idea: creating my own hedge fund. Why? Because it meets all my expectations of what a new vision should be like and it’s something which has turned out to be the most logical decision.

 

a) It’s demanding and challenging; it will let me get out of my comfort zone and grow on a personal level

b) It’s still an idea related to trading - something I know about and understand at least a little

c) I can change lives to a couple of people, invite them to join the project and share my possible future profits with them; for these people it might be a ticket to financial freedom and they would be able to leave a job they don’t like

d) It is something I can initiate and manage without changing my current lifestyle - i.e. I can remotely do all the work while traveling and exploring new places (thank God for the internet, cloud services and great people effectively working on long distance)

e) I can make lots of money and do some crazy adventures which are very expensive

f) And finally, it’s something that requires a really big idea, to have at least a small chance of success. This point was the most tempting for me.

 

And let’s stop fooling myself. I also like the possibility that a multi-million hedge fund can be created by someone who used to be just an average, ordinary guy, having just a 2.000USD trading account a decade ago ( I hope that my ego won’t grow ). Will it work? I don’t know! Maybe yes, maybe no. Can I fail? Absolutely! Can I hit bottom? Totally! But the adventure, cognition, and extending  personal boundaries are worth all of it.


The decision was made in Singapore. With a good feeling, I went to bed thinking about my new vision and later on about the next step, which will be my big breakthrough idea. I didn’t know that it’d come the following day.

 

Happy Trading!

 

Tomas

 

 

 

The roof of the Marina Bay Sands hotel. The place where it all started. 

This was the view from the window of our room. Very inspiring as well!

continue to next part

 

                                                                                                                      

| part 1 | part 2 | part 3 | part 4 |

 

 

 

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