Running a hedge fund is not fun. Not at all.
Yes, we do have spectacular results so far. And new money is flowing into our hedge fund every month.
Yet, I feel extremely exhausted.
Fast growth is bringing up challenges we were not ready for.
During the first year, we planned to launch only 1 CTA investment program. Now, due to the fast growth, we’re expected to launch 4 by the end of this year. And so far we’ve only launched 2.
And while my team should be working on new portfolios right now, they’re busy solving an endless number of other issues instead. Infrastructure needs to be scaled up quickly. Rapid growth demands better monitoring. An endless number of additional stress-tests have been requested by potential investors. Small bugs that are continuously coming up in our proprietary risk management platform. I could easily continue like this…
Now, here’s the reason why I’m sharing all of this with you:
During these challenging and demanding weeks, I realized one truly important thing…
It’s not just a trading strategy that needs to have an exit plan.
It’s the trading itself too.
Trading can be extremely rewarding.
But it can also be extremely exhausting.
Yes, I love the idea of achieving the ultimate perfection in trading one day.
Ultimate mastery is what I’ve been driven by for many years.
But that ultimate mastery doesn’t, in fact, have an ending.
There will always be MORE to learn, MORE to master.
So, this week, I decided to stop chasing that illusion of the ultimate perfection and mastery. And I started preparing the ultimate “exit-strategy” instead.
My ultimate “exit-strategy” is to get my hedge fund to 100 million USD under management.
Then train my entire team to be able to run the fund fully independently.
And then quit trading completely and ‘retire’.
I calculated, that with a reasonable growth of the hedge fund, I should be able to retire within 5 years.
And then, I’ll start focusing on stuff I would love to do next. Like teaching meditations and doing meditation retreats.
So, 5 more years and then ‘retirement’. That’s my ’final exit plan’.
Now, let me ask you:
I think it’s very important for every trader to have some.
At least “partial” (we do have “partial exits” in trading too).
Like “within 5 years to normalize my trading income on 60% return with 20% Max Drawdown on average”.
Or “within 10 years make 5 million dollars and retire”.
Or anything like that.
This will help you stay focused.
This will line up a much clearer path for you.
And it will also help you to have more tangible goals, than chasing the illusive, non-existent perfection and mastery :-)
So, whatever trading level you’re at right now, think exactly what you want to achieve and in what time horizon.
If a goal (or the ‘final exit plan’) is not clearly set and articulated, then it can never be achieved.
There’s one trader I really admire and that I think is close to “mastery”. He’s been a successful trader for over 40 years, with a proven track record. His name is Robert Pardo and I seriously recommend you take a look at his Building Robust Strategies Masterclass.
How do you REALLY know your strategies aren’t just over-optimized rubbish?
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