I come from the background of an experienced trader, with ridiculously good stats, that never really wanted to go the prop route. For some reason, in my mind ... all of these years "prop" meant going into a firm, and working at a "location" (other than my house). So I was content to teach, and just trade my accounts and build them up as I taught. Spent some time abroad, and never connected to that 'route' or 'sphere' of prop. Ran into a guy that runs a couple of his own firms down South, who took a look at my numbers, and mentioned that I really should be trading outside capital. I mentioned the same objections. Didn't want to go to a location. Didn't want to do the 'go to a firm' thing. To which he said: "Then with your numbers, you should be remote trading from home. But those numbers are so good, your potential is such you really should have outside capital" To which I said "Come again? Remote from huh?" Remote trading changed everything in my mind. I guess what they say is true, Capital finds a way to make talent happy. His firm was derivatives, and I'm eqities (mainly), so he recommended a few firms that I should look into in the equities space. Gotta say, the prop route is an interesting one. A couple of things are becoming clear in just the first couple of days From the looks of things, I'm going to need to get my series 7 yes? Always resisted that idea for the longest time. Seemed like an unnecessary pain in the butt just trading my own capital. Still seems like a colossal pain in the butt, but I can at least see the rationale on the firms side. Still hate the idea though The other thing I'm noticing, is some of the firms I've talked with are LASER focused on time-frame / periodicity. In that it seems so many are focused on daytrading. That is pretty much the case across the board? For example, myself, I have about 30 different methods I've developed, but two main approaches. So I have, let's say, Approach A - and that is equities, but the holding period for some of the stuff in that account (which runs non-correlated strategies) maybe 8 months to 2 years. The returns are still great, risk-adjusted, despite market conditions. But it seems like no one wants that periodicity. Which is sorta weird in my mind. Seems to me like returns should just be ... returns. Approach B - is options / equtieis / futures that is swing trading mainly, with a bit of day trading thrown in - and that seems to be confusing any prop firm I approach, and again, I keep returning to the aspect that so many of these firms seem to want one periodicity and one approach. Are there any firms that will simply deal with a trader who can trade non-correlated strategies in the same account? I mean, I've found that despite the sphere and space - you run non-correlated, it tends to produce the best risk-adjusted returns. I don't care if it's Futures, FX or equities.
If you're trading equities and going for a registered prop firm, then you'll either need a Series 7 or Series 56. You may be able to hold overnights with some, but the true nature of a prop is to DAYTRADE using firm capital, which usually gives you 10x or 20x of what you put up as a capital contribution. Of course, this is far more buying power than a standard 4 to 1 retail pattern day trading account from your local broker (Scottrade, Schwab, etc.) So I don't think you'll find many firms that will support your strategy, especially prop firms that make the their money on the overrides of your trading commissions. You may want to look into forming a LLC and then going with TD Ameritrade, IB, etc., if you have a track record and can raise your own funds through investors or partners.
There needs to be a rule on ET: if you claim "ridiculously good stats," you need documentation. otherwise don't bother
If you are experienced, meaning you've been trading for a while now, and you have ridiculously good stats then you probably have a pretty good sized account to work with. Why not stay retail with portfolio margin? Almost 7:1 leverage and none of the hassle of being prop. There are prop firms that will give you good overnight leverage but if you are tying up their capital for months at a time it might not be worth it to them unless you are on a profit split that pays them good enough.
Let me introduce you to a little tool we have on the internet ... http://google.com And the name ... And the 2014 numbers? Are now even better. I'm now running Sharpe 3.19's on a weekly basis on the stock account and have to switch to using Sortino due to upside volatility on the longer term account with Sharpe dropping Now run along and let the adults talk
Yeah ... that's the conclusion I'm coming to. Just talking to a few firms already. But I'm coming to the same conclusion. It's that, and Covestor that I'll probably be hooking up with. I do have access already to margin. I had just figured, hey, if I can trade larger capital, and it's no more work on my part, then why not?
Is this what you're talking about? I'm colorblind, so correct me if I'm wrong, but that top line is the S&P, right?
^ : why retail is retail : Yes. Because we all know that's what the S&P does every year. Funny how you are leaving out the chart of since inception. Or the 2014 numbers. Funny how you cherry-picked one year. Because dear god, no one who manages money long-term ever has just one flat year. Oh no, that never happens. Sort of proves my point about people and their obsession with the S&P 500 from the other thread. Dear lord in heaven, it's the end of the world that if on some periodicity, they find some metric where the market beats them. Somehow that's failing. : rolls eyes :
When you said "and 2014 is even better," I thought you meant 2013 was really killer. By all means, post all the numbers. Kudos for posting your numbers, by the way. Asked and answered, so I will be running along.