Typically traders are very quick to tell the world about their big winning trades and then they go quiet when the well runs dry. This is not a great attribute in the funds management space where investors like to be informed at all times, but most especially when the trader slides into a drawdown.
Is the trader in a normal cycle that is catered for in the overall strategy? Has the trader tried something new and it’s not working? Does the trader intend to reduce risk and if not, at what market levels will a risk reduction take place? If the trader just had a big win or loss, what’s the next step?
In this day and age of social media, staying quiet is not an option. It’s very easy to keep your investors abreast of what’s going on with your trading. We are not talking about the finer details here, just general information will suffice.
If you are already on social media, one sure way to ensure that you lose investors is to keep screaming loudly about all the wonderful trades you’ve made in the past and are making now, yet your investor is seeing a red number in the p&l column! Transparency and honesty create trust, which is the single most necessary ingredient when forming an investor-trader relationship.