That’s the real trick - convince others to give you a lot of money and when you win you get a big cut and when you lose it’s not your money and you just do something else.

Seems to be the way all hedge funds operate, maybe can even charge membership fees too.

Part of the trick to convincing people to invest with you is having a significant amount of your own money in the fund. So that's one hurdle here. It's possible to raise enough that your management fee renders irrelevant whatever you might lose trading your own money, but at that point you're in big league hedge fund scale anyway and will be very tightly scrutinized.

Also, losing client money is just as emotionally difficult and stressful and guilt inducing--maybe more so--than losing your own for anyone with a half normal sense of responsibility and fiduciary duty.

Right... most traders get big bonuses when they win, but if they lose, at worst they get fired. If you can win for a while and then get fired eventually, you'll still end up on top.

Trader A makes $10m in year 1 and gets a $1m bonus. She loses $10m in year 2, and gets no bonus so the firm is down her $1m bonus.

Trader B makes $1m in years 1 and 2. That’s too low to trigger a bonus, but his firm is up $2m.

The system doesn’t reward trader B so he has to choose: do what’s right for the firm, or take big risks in the hope of a bonus

(Simplifying dramatically)

Many firms implement clawbacks for this instance