how in the world do any of them make any money, it just seems with $5000 account one cannot make a decent buck? really cannot make a living on that size of an account? I like to carry overnight, trade with some vol, but I always see these post "looking for prop with only $5000 needed" but do any traders who put up $5000 actually pay the bills???
Well I can give you an example of something I'm working on. It's not setup yet, and I'm not 100% commited to doing it yet as it will require a lot of time, effort and work on my part. Basically a person will pay $5000 for our training program. Once they go through the training program then they can use the firm capital to trade with. We will give them $50,000 in most cases to start with. Once they prove themselves we can increase it, up to about $1million at this point in buying power. Our risk is basically limited to a portion of that original $5000 they put up for the course, as if they lose X% of it then they will either have the account closed or need to add some extra money to it. I've not fully commited to it yet, but it looks like a pretty good business model regardless of whether I follow through on it or not. Brandon
i put up 3500 for thinkorswim and i'm at 4795 after a week. this is trading futures and options, not exactly making big gambles. trading off tick and 15 min charts. i do have years of experience though.
even with $50,000 you really cannot trade pairs, openings, hard to trade momentums etc so one's upside is limited to what they can actually do with the limited capital. a good trader needs some buying power to actually make a profit having them add "extra money" would be a bitch. some kid blows out his account trading DTO, SKF, CME, FLSR in 5 minutes. he goes outside for a smoke break and you never see him again what about desk fees, software fees? it just seems having $5000 in an account doesnt make sense. even if you are a great trader, 50k worth of buying power you cannot jack sqaut if I ran a desk, Id hate to have kids blow out there $5000 account all the time.
Are you trading FX with this program ? Doesnt sound like you are giving them any kind of room to trade though. A portion of 5000 isn't a whole lot.
There are a lot of things that have to be worked out for me to take part in this particular deal. Right now it's one that I could make a ton of money with, but I doubt more then 5% of people could be successful coming through it..mostly because of the very strick risk control they have in place. For example, while they will give you $50,000 in buying power when you are starting out, if you lose $50 in a day your turned off. Well, there is no point in my mind to having $50K in buying power if your only going to be able to lose $50...you cant even buy 100 shares. I do agree that people need to start small, and for the most part I'd encourage people to not worry so much about making money the first 3 months, just figure out their asses from their elbows. But like I said in this particular deal there are a lot of things that need to be worked out. I can see it as something that could be very good, both for the traders who take part in it and for me..but right now it'd be much better for me. And even though some people might think I'm just "a sleazy marketer", I really wont put my own name on something I dont think is the best out there. It's not FX, it's equities. The deal would be, as I said they put up the $5k for the training and then we start them off with 50K in buying power. It moves up from there as they prove themselves. We make our money on commissions, interest, and profit share. Brandon
Good shops have the software with the risk controls to buffer any downside draft that a trader may experience. Hit a certain point and trades are closed and you are done for the day. Not sure which platforms offer it, but am familiar with the function in the laser management console. I do see a lot of traders tell of a guy who will blow out HUGE sums of money, relative to his account and that of the firms. Usually this is because the firm does not have the proper risk controls in place to protect themselves. There was a thread last summer about a guy at Bright who blew out to the tune of a few mil. What was surprising about it is that Bright has good risk management on their traders, but apparently gave this guy too much rope to hang himself. (Don't know if he ever got out of that hole, but Done believed in him and his ability to claw back, but not everyone can, which is why you need those clamps.)
Well, to be honest, it sounds like a GREAT deal for you guys, and an absolutely shitty deal for the traders. What is it with trading firms that are terrified of risk ? To me if you have a solid training program then you should have the confidence to "let the trader trade". To me giving a guy 50 dollar downside shows you have no confidence in your training/style, and absolutely no confidence in your trader. Basically you guys are gonna pocket the 5k. Like I said....great deal for you guys. I would tell any trader to stay 1000 miles away from a place like that. I always crack up at these prop firms that offer to back people but won't let them lose anything. If you want to make money trading you HAVE to take risk. I have seen everything from firms that have guys attempt to trade ES giving them 3 ticks against them, to firms that let guys trade 100 lot max position of ES with a 5k downside limit per day. 2 paths to absolutely nowhere.
but how can that little amount of buying power be enough for a trader to make a living? what types of trades does one do with just $50,000?
For starters, MOST props will give you 20:1 leverage on your 5k. 100k buying is not that bad to start with. Only drawback is too much leverage vs risk deposit almost guarantees you will blow out your account.