It is not a crime to manage others funds and accounts, but it is not that easy as it can create serious problems that can lead to stress and mental fatigue. If you are able to grow your own account, there is no point to trade the others’ funds or manage their accounts and have an income through it. You can easily grow your little account slowly and steadily, until it turns into a reasonable capital of your wish.
You can trade patiently and don’t withdraw any funds until your account balance reaches the level you desire. This concept of accumulating profits without withdrawal would be easier if you have another job or other sources of income. It might take a while, however you will get there much sooner than what you think. Many of those who become profitable, but have no enough money to open a live account with a reasonable balance, think that if they trade with the others funds/accounts and make some money through it, they can easily have a big account very soon. It looks like a great idea, but they don’t know that it is their greed trying to show up with a different face, and enter from a different door.
Becoming profitable in FOREX trading is a great achievement, but it doesn’t mean that you are done and you can do everything you want. Although you have built your discipline and have been able to repeat your success in live trading, but it doesn’t mean that you will not make any mistake. Mistakes are inevitable in this business no matter how professional you are in the business. It can occur from a network failure or even from your broker. In this business, you always have to be aware of your emotions because 70% of trading is basically psychology related, even if you have been trading successfully for 100 consecutive years.
When we become profitable, we let everybody know due to the great feelings we experience triggered from success. We talk about this achievement excitedly, and inform everybody that we can make n% profit per month very easily with our strategy. Therefore, friends and relatives come and ask us to trade with their funds and share the monthly profit. It looks like a great favour a profitable trader can do for his loved ones, but it can turn into a big disaster. Why?
- Newly profitable traders are not aware of the emotions that show up when trading the others’ funds and managing their accounts. They will have a lot more fear that they were not used to have when trading with their own money. They will have a lot more greed too, because they think the investors will appreciate him a lot more, if he pays them more interest and profit than what they agreed. These emotions don’t let the trader focus and work properly by making logical decisions. He will make mistakes and will wipe out the accounts on the long run. This happens so many times.
- Most investors may know nothing about trading. All they know is that the trader is able to make n% profit per month, every month. They expect to receive the interest every month. They know nothing more because they are not traders, only traders understand the behavior of the market. They don’t know that trading can be different from month to month. Each month has its own behavior and pattern so never judge the present month with the previous month. Many of them think that they have done a big favour for the trader, because they have given him their hard earned money to trade, and allowed him to have a share from the profit. Therefore, they can expect a lot, and dealing with such people can be too troublesome and stressful.
- Trading with others’ and managing their accounts needs some special registrations and permits from the government in most countries. One can not do that as long as he is not registered. In spite of this, many traders do it because either they don’t know that they have to be registered first, or they know but they think that the investors who are mainly friends and relatives will never sue them if they lose their money. This is a stupid illusion, because even a brother or a son can sue his brother or father when he thinks that his money is stolen. Yes, many people will think that you have stolen their money if you tell them that the money is lost through trading. They don’t care about the proofs that you will show them. They know one thing: their money is lost by you.
Is it worth the trouble and headache?
Absolutely not. You can tell people that you are a good and profitable trader, but don’t ask them to give you their money to trade with. And don’t agree to trade their funds and manage their accounts if they request desperately. No matter whom they are. Even if they don’t blame you because of losing their money, you will blame yourself-for instance, you lose a relative or a close friend’s savings. Do you agree?