Why do people quit their jobs to become traders then want to get HIRED by a prop?... Like others have said, you'll probably get screwed over more ways than one, AND you'll have to trade by their rules... F--k that, just go at it alone...besides that's the real challenge. cm69
I am really confused by some of the opinions here. "A job is where someone gives you a paycheck for performing a task". Half the people in this country are either self-employeed, work on commission, or have a performance based bonus that constitutes most of their compensation. Especially in the investments business you are either sales or Money Management and neither get a large salary and both deal with as much stress as the typical prop. trader. In fact retail broker is far worse. I also am confused about Amerprise Financial offering a prop service. Isn't that the old American Express Funds Group.
ive read through all your replies.... some are funny, others are just ignorant. The prop business model receives a lot of criticism, a lot of which is well founded. However, I personally think its a valid place to start your career in the markets. Naturally if you can get a job on an insitutional desk, its better.... I started my career at a prop firm about 3 1/2 years ago,with no salary and a few g's down. I've used my capital base of 3 grand, and taken out over 1.5 million gross. Most of the strategies at these prop firms are based on high frequency and risk management. If you cant control your risk you really cant make money. I run a prop group, and I can assure you that A) traders do not need to put up capital B) We dont hire part time traders.... If you are thinking of trading while in school (unless you only have one class or so) dont bother, secondly, just make sure you get training... Training is not as intensive and structured as you would get a tier 1, tier 2, or tier 3 firm, but it should be enough to build a solid foundation. The mos timportant thing is training, buying power is nothing... I read somone reply to your question with some "buying power" bs.... they dont know what they are talking about.... prop firms give crazy leverage, the reason any good and honest prop firm or group would give you less/more buying power based on your abilities as a trader.... Ive got traders with nothing in their capital accounts with $200 k in buying power, because i know they can handle it... they started with 25k just like I did.... its based on ability, if you are given more buying power you will just loose money quicker.... also, remember that you have to learn to walk before you can run, so trading small size lots in the begining is key, because you learn a lot without loosing too much... Also, ive noticed ex-prop traders never have anything good to say about prop trading and the strategies, you must remember this is not for everyone, they didnt make it , so instead of taking personal responsibility they blame the firm, system, strategy, training, etc... It's no surprise to me that these individuals do not make it as they they dont have the right psychology for trading, The first thing i teach in my psych trading class for trainees is to take personal responsibiliites for their decisions and actions... cause if you dont you will never be able to correct them... anyways, i hope this helps you make your decision... cheers,
Thanks for the tip, I am ordering a copy today (any other reading material suggestions are welcome). I am not a 100 percent on this, but I think it is best for me to take an entry-level position, and open up my own account on thinkorswim..... I am somewhat knowledgable of the markets, but I still haven't traded yet. Patience isn't one of my virtues, but I think it is best for me to take it slow. Once again, I thank everyone for their opinions and am really happy I joined this forum.
if the prop firm is good and offers good training, and has a decent group of traders, and you treat it as a job, you will be better off than treating it as a "chance" to win or lose money. if you view it as only a chance to get money...that's step #1 to being the one that fails. need a better attitude. you have to love trading...
cks, remember that I made a mistake on the first name of the author. It's Edwin - not Jesse Good luck in your pursuit!
"Half the people in this country are either self-employeed, work on commission, or have a performance based bonus that constitutes most of their compensation. " -If you are a salesman, you are payed a contractually agreed upon $ for per sale or for some level of sales. You get paid a specific amount for achieving a specific task, it is in the contract. -A self employed person is a one person business who gets paid for delivering a specific product or service. It is true their is almost always more speculation in self employment UNLESS one has a goverment issued licence, in that case it is more secure than most employed jobs. If you want to understand what the real deal is, look at which way the agreed upon contractually obligated "certain to get paid if x and y are done" money flows are going... well guess what, most these "prop" shops that kind of money is flowing to them... the prop guy, well, he puts up 5k and has what, 20 or more % of that going up in desk fees, then the transaction costs... Hey, he is "producing" for the firm with all that churning... but, that is not a job. He is a speculator with little chance at all of success. Stratigies taught are too often for the benefit of the firm and have little to do with profits other than fees for the firm.. I am not saying there is nefarious intent in all mor most cases. I met a "trainer" at one of these prop shops and in confidence he admitted to me he didn't have a "clue" how to make money in the market he was trading the kids in... in fact, he "hated" that market and it frusterated the living HELL out of him.. yet, here he was a trainer for a bunch of kids, trying to show them what to do... When i heard the crap he was telling them to do, i know his group didn't have a prayer, but u know what? he was a nice guy and his intent to help the young traders was sincere, it was hurting him to see the failure. I think many of the guys leading these things are in a pickle, at least the honest ones.. (the dishonest don't give a shyt) the honest ones do want to help the guys succeed want to do what they can to help, they just don't know how to make it happen. I am sure not always like this but I have seen this many times.
ck, I just joined a prop firm 2 months ago and the criteria I used to pick them was (in order of importance): 1. Successful mentors 2. Solid training 3. Tools 4. Commission 5. Payout If your prop firm can offer these within reasonable standards, then go for it otherwise look elsewhere for better packages. I feel sorry for those who didn't make it into trading prop or not but it's important to take responsability instead of blaming the firms. If you believe you have what it takes, put in the work and time. Mentors will teach you 10% of the formula, the 90% lies in your head.
You missed the entire point which was, a lot of jobs don't provide a salary or even a stable month to month income. PropTrading is no different. Look no prop firm is making money off anyone who puts up 5m and busts out. To say they are feeding on these people is ridiculous. You have never worked in investment sales if you think it is a better deal than going prop. The percentage of people who wash out there is at least as high as prop. I have no idea what your comment about self employed folks, with a Government License even means.
I've read, on this thread imparticular, that prop trading is not a very profitable career path to take, *IF* you are required to front money to begin with and take undesirable %'s. My question is, I've been offered a position with a prop firm and this position requires me to put up absolutely none of my own money. This position includes 24k salary for the first 18 months. At the end of 6 months of training, or before if you show promise, you are given 100k working capital. At the end of 18 months you are expected to be a consistently profitable trader and in doing so, should have built up a working capital of 1-3mill. Also they're offering the greater of 29% AGR or 65% of net revenue annually. For some of the people who were saying most prop firms are being dishonest if they offer you a "job", would you consider the position I'm about to accept a "job" and also if you just graduated college with no capital of your own, would you suggest taking this position?