Selection criteria for the funding component of the Qualifying Series
Participants are being scrutinised for a number of funding pathways via seed-funding programs, high-net-worth sophisticated investors and fund-of-fund managers.
Obviously the selection criteria will be different for each funding source, but some parts of the selection process will remain the same.
- You open a PsyQuation account with one of their selected brokers. This allows us live viewing access (every 15 minutes) to your trading data.
- The account size is relevant. We need to see that traders can manage increasing amounts of risk. It is difficult to convince an investor that a trader managing position sizes of 0.1 lots can immediately graduate to much bigger amounts. The minimum allocation we deal with is $100,000 and this account usually has a 5:1 leverage allowance.
- Our main focus is on recognising skillful traders; those with the ability to maximise profits on good trades, minimise losses on bad trades, or ideally both. We use traditional measures such as Sharpe ratio, annualised returns, and volatility measures as well as the super-intelligent PsyQuation algorithm to measure trader skill and the PsyQuation score.
- In more plain English, if you are consistently profitable using repeatable trade-selection and risk-management processes then you will be seriously considered for an allocation. I cannot give any more concrete guarantees; no serious investor would agree to that. With regard to numbers, a top trader managing a $10 million allocation will return 1.5% per month on average with low volatility of returns.
- Once you pass the quantitative stage, then we need to get to know you better. The relationship between an investor and a trader is primarily about trust and we need to get that relationship started on an honest footing.
- In terms of compensation, developing traders will typically earn 20-25% commission on all fresh profits they generate. More established traders can charge a management fee; they will typically earn 1&20 from an institutional allocation, so a 1% management fee and 20% of profits.
- Our minimum aim is to get traders to the $10 million allocation mark, at which stage we expect a developing trader to have graduated to become a full-time professional trader.