In this post I will share with you how I have built my professional career in the financial trading industry over time.
It’s important to share my story with anyone visiting the site that might be thinking about working with me.
I’ll be sharing the following things:
- My FX trading career
- The first managed account programme I built
- A look into my trading academy
- Lessons I learned while trading in the City
- Why my business evolved into a hedge fund
- How I invest into FX today
I currently manage my own small hedge fund while also working within the financial industry as a consultant and advisor.
Having the fund allows more flexibility in how I invest and gives me the platform to raise outside capital when I need it.
I also operate my blog here and have gained a huge amount from having a professional network over the years.
Although I love my work and enjoy the adventure of exploring new opportunities this wasn’t always the case…
I don’t have any academic qualifications and have never worked inside a large bank or investment company.
My whole business has been built entirely from the ground up and I continue to evolve and grow it as my own experience develops.
Today, I try not to limit my horizons and constantly explore new ideas and investment strategies. Some work and some don’t.
The main focus of this professional blog site is to share the stuff that has worked and pass on the lessons I’ve learned.
Helping you grow your business will add another successful trading entrepreneur to my network. This only makes it stronger and more powerful over time.
My FX Trading Career
I began as a retail trader searching online for ways to make money trading Forex. I did try lots of other online ventures but FX trading appealed to me because it seemed so much more accessible.
I spent a long time searching and back testing and looking for that magic indicator or system that would give me winning trades.
I quit several times and also tried other ways of making money through Forex.
These included everything from secret systems, following signals and even investing into a managed account programme.
The end result was always the same. Losses and the feeling I was going around in circles.
This whole experience was incredibly frustrating and demoralising. It left me wondering if anyone actually made money trading at all.
Despite this, I knew that there were professional traders and that large firms and funds all made money consistently.
My lucky break came when I was introduced to a professional trader that had trained inside a prop firm in the City of London.
He showed me that the missing piece of the puzzle was an understanding of fundamental analysis. As soon as I grasped this concept fully my progress was rapid.
I noticed improvement in my trading results as the months went by. I had escaped the cycle of frustration.
I had almost no money so my next plan was to leverage my trading skills and generate an income while building a business.
Initially, this came through selling my signals to other traders for them to follow along with on their own accounts.
This type of service was in huge demand but I could scale my business more effectively by actually trading client accounts directly.
This was the beginning of my professional asset management business.
My First Managed Account Programme
Because I was building my business from scratch and with no start-up capital I had to constantly find creative ways to grow.
The biggest challenge was covering living costs in a way that allowed me to focus on trading as much as possible.
The ideal scenario was leveraging the trading itself to generate extra income streams. Selling signals to other traders was a good start.
I kept my living costs as low as possible and re-invested all other money back into my trading account. This would compound the growth over time.
My very first investor was someone that I met in an online forum. I had been sharing my trades for a number of weeks when he sent me a message.
He was setting up a small managed account business and wanted me to help him trade the money. Within six months I was trading over $1 million USD.
During this time I learned all about finding investors and structuring managed account programmes. After two years, I decided to leave and set up my own managed account business.
I found some initial investors and focused on building my AUM. At that stage I was still trying to leave any profits I made in my account and re-invest any extra incomes to grow it quicker.
I launched my own website and began finding more clients to help grow my business. In 2010/11 my broker called me to tell me about some new regulations being implemented.
They informed me that I could no longer trade my clients with them and receive payments unless I became FCA regulated.
They introduced me to a London based firm that would cover me underneath their FCA umbrella. This made it affordable.
Building Professional Credibility
There was a fee to pay for the FCA coverage but it was a fraction of the cost of me being regulated directly.
Being FCA regulated made my managed account programme a lot more credible. It made it much easier to find clients that were willing to invest.
I also had the use of the London offices from where I could both trade and meet new clients. This was another boost to my overall credibility.
At around the same time I was working on several different avenues for bringing in new clients. One of these was by registering and posting my performance onto fund management databases.
Once such database was called Barclay Hedge. If you search online for hedge fund database Barclay Hedge is one of the prominent results.
They list and categorise money managers so that investors can then pay a fee to access that information. The investor will then reach out to the trader that appeals most.
To register your strategy at the time you needed to provide some evidence that your performance had been independently verified.
Barclay Hedge would then check over your details and provide you with a log in. Each month I had to input my latest performance figures and they would update their records.
This was surprisingly successful and I received regular enquiries from potential clients looking for more information on my strategy.
Eventually, Barclay’s contacted me and told me that I had ranked as the second best performing FX manager in my category.
The category was FX traders managing between $5 million and $10 million. They offered me a certificate to demonstrate the ranking.
Although the category itself was made up of only 140 traders, some of them were extremely experienced.
This was all further credibility to show potential investors.
Educating Retail Traders
The first few years of my asset management business were an extremely difficult grind. Covering costs and building the business was very tough.
During that time I started thinking of creative ways to grow my income streams as a direct result of my trading success.
Aside from selling my trading signals I also decided to set up a personal website and blog (www.jarrattdavis.com).
The purpose of the site was, originally, to attract new investors into my managed account investment programme.
I would provide educational blogs and videos so that people could learn more about me. Some would like me and decide to work with me further.
It was a great way of raising my profile and increasing exposure for the business. Over time, this helped to increase the quality of my investors.
Lots of people that I met didn’t want to or couldn’t afford to invest with me. They wanted to learn for themselves and were prepared to pay for my time.
Over the years I had met various people offline that paid me for hourly coaching sessions. I had also been invited by several online websites to host webinars and create videos too.
I was familiar with this demand and I’d also been in that same position myself at the beginning of my own trading career.
The coaching and training became another income stream that I used to cover the costs while focusing on building my trading career.
When my website went live the demand from traders for coaching increased. They now had a point of contact to request it.
Building A Trading Academy
It soon became pretty clear that my track record, FCA regulated programme and Barclay Hedge ranking were attracting attention.
Within months, the training and education side of things started to grow significantly. I was approached by professional marketing companies to really help me grow it further.
I accepted all offers because my main focus was on growth. The more exposure I received the more clients I would get and the more my main business would grow too.
In 2013, I decided to isolate the education business and develop it to its maximum potential. I was flying all over the world meeting marketers and building a team.
It was a perfect income off the back of my professional trading business. I was someone doing it for real and willing to teach.
My blog site was completely consumed by it and before long it was solely a trading education site. My main investment business now grew based on clients I met directly while working in London.
Curiously, I still gained some incredible professional contacts through the education site. To this day I’m always amazed at the diverse array of people that I meet online.
Within six months, however, I knew I’d made a terrible mistake. I was suddenly locked into waking up at 6am each morning to conduct live webinars.
I had created a system where people were paying to access me and my time. My weekends were spent creating new content and training videos.
When I was only trading, my schedule was flexible. Some days I would wake at 6am but other days I wouldn’t trade at all if the volatility was low. All of that balance was gone.
My overall income was definitely up but I had inadvertently created a monster that I couldn’t possibly sustain.
I was making similar discoveries in my professional investment business too.
Trading In The City
I can remember the first time I exited the tube station and looked around the City of London. I was in the area known as Bank which is the heart of London’s financial district.
I thought that trading in the city was the pinnacle of my career. I believed that everyone there was making fortunes and living the life.
The reality was quite different.
There were several insights that I learned during my time working in London. Those insights would go on to shape the rest of my career, even to this day.
The first realisation was that most people actually didn’t make money. Or, more accurately, the entire system was set up to make money from commissions rather than from trading profitably.
I was introduced to professional IBs. These are people that raise money for traders and find them clients.
Almost all of them demanded a guaranteed payment of 1% or 2% per month of the total assets they introduced.
I was baffled. If I could guarantee 2% return each month then I would already be the richest guy on the planet. It was impossible. But then they explained the secret.
The secret was in generating commissions. They happily explained that I needed to trade a specific lot size a particular amount of times per day.
If I did that then we would generate the required commissions each day to cover the 2% payments. We could then negotiate a deal on any profits that were made on the client account.
The broker would pay out the commissions and everyone would win. Except the poor old client who was still under the illusion that everyone was trying to make his money grow.
Trading like that would undoubtedly ruin my reputation. I decided to forget the IBs and focus on other avenues.
Scaling A Managed Account Programme
My next insight came when I tried another avenue of capital raising. This tactic was all about targeting institutional investors.
I would frequently meet with pension fund managers and fund administrators in an effort to build my AUM.
They all told me that they couldn’t or wouldn’t invest into a managed account programme under any circumstances.
Managed accounts, in general, have a negative reputation among professional investors. They are seen as less credible than other structures.
The biggest issue was that any managed account track record is virtually impossible to fully audit. At the time, all of my performance was verified by an independent CPA in the US.
He would access the trading accounts and verify that the performance matched what I was posting to the databases and showing clients.
This was acceptable to individual investors doing their own due diligence. Institutional investors had higher standards because they were managing money on behalf of others.
They explained, that because the trading account was in the clients name it was impossible to prove that it was only me trading it.
There was a power of attorney giving me permission to trade but this didn’t stop the client and anyone else trading it too.
Because I couldn’t prove the performance was solely mine it would never get through an audit. None of them would ever allocate to me based on this type of track record.
This meant that I had very little chance of ever scaling my business beyond individual investors.
It was a blow but there was a solution. I would change the structure of my investment programme from managed accounts to a hedge fund.
A hedge fund is much more transparent and a full audit can easily be completed. It also made professional investors more comfortable.
The Evolution Of My Strategy
When I was building my managed account programme I had a very simple pitch to all potential investors.
I traded my own money alongside theirs. This meant that if they lost all of their money I had just lost all of mine. That was my motivation for performing well.
The integrity that this type of pitch carried was one reason my business grew so well over the years.
At that time, all of my available capital went straight into my trading account to grow and compound.
My clients were investing into the exact same process that I was using to grow my own wealth. This was a feature that I was proud of.
Towards the end of my managed account programme I had accumulated a significant amount of capital.
Two things became clear. Firstly, I could now consider other investment strategies that were suddenly open to me and my increased levels of cash.
Secondly, it was probably wise to avoid having every penny I had tied up in a trading account. There is a point when compounding everything just becomes too risky.
This lesson was re-affirmed by the SNB price crash in early 2015.
For days afterward, all I could think about was the possibility of losing almost a decade of work during a single risk event.
Those thoughts were all swirling around my mind more and more over time.
Launching My Own Hedge Fund
I wanted to escape the commission driven environment of the city. I wanted to have a structure that could be scaled up effectively.
And, after ten years, I was also tired of sitting in front of trading screens for 15 hours per day.
As my capital grew I wanted to branch out my strategy into things like commercial property and private equity investments. Real world assets with tangible value and equal potential for growth.
I have always been interested in this type of investing and I finally had the resources and connections to begin implementing it.
A hedge fund would allow me to attract better quality clients and invest money much more flexibly.
I would be moving away from the familiar world of FX managed accounts but it was a challenge I found exciting.
I believe that investing client money in the same way as my own is integral to a credible money management business.
Not being reliant on outside money was also a great milestone to reach in my career. I work mainly from home in a much more relaxed environment.
Setting up my first fund was expensive and time consuming. The regulatory burdens are almost prohibitive. But the new structure does allow much more flexibility.
Expanding My Investment Strategy
There are constantly unforeseen challenges to overcome but it really is a new adventure in my career.
Profit is still the goal but rather than judging performance month to month everything is much more relaxed and long term.
My goal is to pursue all of these new projects and opportunities and use them to continue growing my own wealth.
Despite all of the ups and downs, my core aim hasn’t really changed. I want to generate significant growth of my assets while reducing risk where I see it.
A lot of professional clients ask me exactly what I do on a daily basis in the situation I’m in. The first thing I say is that every day is radically different to the last.
A lot of time is spent researching and assessing possible investment opportunities. A lot of research is done online or through brokers.
Avoiding mistakes is important. I’m comfortable with researching everything thoroughly and taking a long term approach.
I also spend time working on my professional website. I write new content and create articles and videos that will help aspiring asset managers and investors with their own business.
I’ve met some truly fantastic connections through my online marketing activities over the years. It’s the first thing I recommend any asset manager to implement to grow their business.
The combination of a likeminded professional network, a proven track record and a credible structure for them to invest into is extremely powerful.
Since 2013, the online trading academy has been evolving in a similar manner to my investment business.
It made logical sense at the time because it complemented my main managed account programme perfectly.
The Trading Academy Lives On
I very quickly realised, however, that I didn’t have the time or energy to coach and train retail traders as part of my full time routine.
As a business, it does generate a significant income and shows positive signs of growth each year. Rather than close it down I decided to evolve it.
I changed the model so that it was no longer traders learning directly from me. Instead, we built a training programme that was based on the same concepts used by prop firms in the city.
There would be a period of learning and training through videos and lessons. And then there would be elements of live coaching and teaching from professional traders.
I hand pick the traders and coaches and make sure that they have verified track records of profitable trading.
It turned out that my original education had produced some great traders that were familiar with our training and could trade profitably.
This led to a policy of only hiring former students that have a proven track record. The system is still in place today.
Despite this structure I do still get involved with the academy business on occasions. For example, I will host promotional webinars and I still create videos and articles from time to time.
I also try and keep in touch with our students by sending emails that contain useful content and things that can help them.
Over the years I have met and worked with some excellent traders. As I started to evolve my investment strategy I made sure to allocate some capital to the best FX traders I knew.
My FX Trading Today
This allows me to still be an active FX investor without having to dedicate my own time to trading the markets.
Very often, my professional clients will ask me if they can invest with these traders too. I’m always more than happy to make any introductions in this manner.
I value FX as an important part of my personal investment strategy, but today it is a much smaller part than it used to be.
I’m still very much involved in the FX industry and have a large professional network. I decided to branch my professional blog away from the academy site in 2018.
The professional website (www.jarratt.blog) is dedicated to serving non-retail individuals. It contains help and guidance for aspiring asset managers.
The biggest issue you face as a start-up is structuring your business correctly and then scaling up your AUM. I have been through all of this myself.
My aim is to share all of the lessons from my own journey to help you on yours. FX trading was how it all started and the key to everything I’m able to do now.
There are virtually no resources available for small asset management businesses trying to scale up and grow. I know this from experience.
If you need any help or even an introduction to help you grow your business then our network is dedicated to that purpose.
If you have an established money management business then your next step is to sign up and join our network today.
If you are preparing to launch your business then joining our community will give you all of the steps you need to take.
If you have any questions about launching or growing an asset management business please contact my support team. They are happy to help!