obviously I will not be posting any details from a private contract on an anonymous internet forum, that would be very foolish. I am aware of the non compete. If you want to know about the non complete you could always ask TST via email. GL.
I just wanted to thank-you londonkid for answering a question I always had in the back of my head, which was why a trader who can trade would chose to trade OPM. I had always assumed that if a trader could trade, then even a 10k account in the futures market would be plenty to build from. But given this very simple reason, which I understand myself all too well, its of course the perfect reason to go down this route. For some reason, this never jumped out at me, and yet, its perhaps the biggest factor in considering going down the prop route. Its also funny that it was only a few days ago where I was browsing posts and somehow your name popped up and so I went back through your posting history. Your responses, in my opinion, have been dead on and I consider you to really know what you're doing, which puts you in a really small group here, and its all the better given that you're a price action trader!
Pekelo, Crispy left for the following reason, as quoted below: "But avg pnl per car was still small. I would need to swing 100 cars per trade to realistically re-create the income I need to make a full go at it." It's already been discussed that for the live account to be effective, you need to SCALE UP over time. Crispy posted that he did scale up with every 1k in profit and scaled back down with every 1k in drawdown. Given that his "avg pnl was still small" it perhaps didn't make sense to continue. The math only makes sense if you've built enough cushion and you begin to scale up as per the program guidelines. If you're profitable, then you have to justify why you're giving up the 20% haircut. Putting the intangible psychological benefits of trading OPM aside, a funded trader needs to either have bigger P&L per contract and/or trade larger lot sizes. A funded trader only has TEN TRADING DAYS to build his/her cushion. If you've only built up a 1k cushion for example, then the probability is greater that you're going to "be done" sooner, because you are limited in the ability to take a draw, and thus no different than opening a piker account with AMP. londonkid passed the 150k combine, and thus the probability increases to remain longer in the live account, of course after passing the live trader prep AND building an adequate cushion in the first ten days of the live account.
Here is the full text of Crispy's post (in addition to the line quote above, which was from another post):
Thanks. One of the skills you have to attain as a trader is to be able to recognise when you are no longer thinking rationally, or likely to enter that state. The emotional and logical parts of the brain bloodflow can switch very quickly. Ever felt angry with yourself and made a revenge trade only to lose more? this is example what is happening. This is why trading a meaningful account size of OPM where a modest % target can give you a viable income is totally different to putting down a few k into a piker broker account. Over leveraging a small account will put yourself into emotional thinking very quickly. That said a seasoned pro would be able to compound up a small account handsomely but these people are rare. Price Action trading means different things to different people. For sure 95%+ of price action traders are not profitable and it does attract the cant trade vendor type. My own trading is based on purely price/time and horizontal lines/boxes that I draw on my chart over multiple timeframes along with some inter market work. This is of course very different to other mystic types who try and identify repeating patterns like wedges/channels/etc. I am aware of these only to know where weaker hands will likely puke. The biggest issue a struggling trader faces though is lack of edge.
I completely agree. Although I find channel and trendlines interesting, its those horizontal lines that for me allow for firm rules to be created. The trouble with trendlines I find is that they can be drawn in so many different ways, but horizontal lines are firm support and resistance, actual levels beyond which price couldn't go, and hence I believe it to be easier to to design a system around this.
Thanks to Pekelo and londonkid for the entertaining spats, good stuff. Regarding the "true size" of the live account, c'mon guys, this is NOT rocket science, lol. 150k: Opening lot size max is 3 lots (for the first $1,500 in profits) Maximum trailing stop draw is $4,500 Maintenance margin PER LOT multiplied by the total number of lots (as per the scale up plan), plus the total allowable maximum draw. So for crude, it's $1,000 maintenance margin per contract, and therefore: ($1,000 x 3) + $4,500 = $7,500. So for the record, $7,500 is the equivalent OPENING capital outlay if you were opening your own account at a futures firm and day trading crude exclusively. Take the same example with whatever contract you're trading, and use the same formula. If you are trading three different products, then the number will vary depending on the amount of margin required per product, but the maximum trailing draw remains the same. THIS is the TRUE account size. It's based on BASIC MATH, and it cannot be disputed. A funded trader doesn't have to worry about maintenance margin, since there is no capital outlay. The ONLY number a funded trader needs to concentrate on is the profit cushion within those first 10 critical days of trading the live account.
I am sure Pekelo will be back to educate us on this matter further lol. As I stated in a previous post it looks like Crispy concluded that the edge he had was not sizeable enough to yield a great enough net profit for him to continue. It is correct that in days 1-10 of funded that your profit then becomes your cushion from day 11+. To make say $300 p/day = $3000 cushion on a 3 lot is perfectly reasonable for a decent trader, it works out 8 ticks per day on a 3 lot of ES. Remember they only want decent traders it's not supposed to be easy. Position sizing is critical. As an example let say you made your $3000 cushion and you were now starting day 11. Naturally you are going to be scared of losing the $3000 and blowing up (you are human). You start off with a 3 lot and risk $300 per trade. Right of the bat you lose your first 3 trades. You are down to $2100, you feel like crap and feel like you have already messed up your opportunity. This is how accounts get blown and people get emotionally out of control. The correct thing to do would have been to cut your size to 2 contracts after the 1st losing trade, then to 1 contract after the 2nd losing trade. After 3 losing trades this way you account would be down to $2400. Crucially you do not increase your size until you have made back the losses you incurred. Contrast how you would feel making trade number 4 with a 3 lot in the 1st scenario compared to a 1 lot in the 2nd scenario. GL
My understanding is that a prop firm has a central account and risk limits are assigned to each account. I am sure Mav knows exactly as he used to run a prop firm but then again there are different types of prop firms out there. I am pretty sure there are not individual pots of money as I have witnessed a prop trader get locked out of his platform due to his backer blowing up. This trader was in profit at the time and clearly the account was not segregated from his backer. When you join a prop firm you discuss what limits you will require it is not case of saying I have got £50k so therefore give me 50 oil contracts, its all custom margin/risk. In another case one trader blew out his account with a huge busted oil spread and caused all the traders in the team to lose their capital contributions. There will be people on ET who know this and are laughing hard at the piker broker margin comparisons.