I have a few basic q's about prop trading. Can anyone answer? Thanks. 1. How much money is one typically expected to put down to trade? I've heard $25K, but also $10K from Echo. Is this correct? 2. What happens to losses? Does the trader cover them, what happens if you are in a draw down, are you required to contribute more capital? How long will a firm allow you to continue to trade if you immediately get into a drawdown that exceeds your initial capital? 3. Do most prop firms allow "swing trading" where positions are held for 5-7 days or no? 4. Will prop firms accept another LLC as a member...if I wanted to sign up in the name of an LLC that I have structured? Thanks!
Yeah, I would totally agree! Prop trading isn't for everyone. Trading in general isn't for everyone. Investing isn't for everyone. Speculation isn't for everyone. In fact, the market isn't for everyone including professionals not just retail or daytraders. Having come from the institutional side and now doing prop trading, I've come to realize that if you are going to participate in the market in any way and shape(short-term trading or swing or long-term investing), things are NOT(!!!) going to be easy. No matter how good you are. Even Warren Buffet gave himself a D in 1999/2000 when his portfolio totally lagged the market. And the average mutual fund managers normally lose in the tens of millions if not billiosn collectively year in and year out. Though int eh raging bull market of the 90s, they made a lot of dumb money easily. Now, inteh first tough years, most of them are getting creamed! Just like daytraders are getting creamed. BIG FREAKIN DEAL! It doesn't matter who you are or how much $$ you are trading/managing! You will LOSE $$ if you are not right about the market. Plain & simple. That's the deep truth I've arrived. How come no one out there is outraged by large institutional losses? But when a few small-time retail daytrades lose their pathetic life savings everyone says that daytrading is evil or bad? I don't get it. something to think about huh? trader99
apologies to MYDemaray for plagerizing. MYDemaray Junior Member Registered: Apr 2002 Posts: 2 04-26-02 01:07 PM Account funding and other things???? I have a few basic q's about prop trading. Can anyone answer? Thanks. 1. How much money is one typically expected to put down to trade? I've heard $25K, but also $10K from Echo. Is this correct? 2. What happens to losses? Does the trader cover them, what happens if you are in a draw down, are you required to contribute more capital? How long will a firm allow you to continue to trade if you immediately get into a drawdown that exceeds your initial capital? 3. Do most prop firms allow "swing trading" where positions are held for 5-7 days or no? 4. Will prop firms accept another LLC as a member...if I wanted to sign up in the name of an LLC that I have structured? Thanks!
1. Most firms ask for $25K, some may make an exception down to $10K (if that makes a difference to you, you should discuss it with the firm). 2. "Draw downs" are simply "losses" - if you get below $5K in your account, you should probably talk to the firm about what you're doing. We have 30 day and 90 evaluations done, and if a trader losed $5K in that time frame, there is usually a problem (with trading tactics or something), and we need to address it. 3. "Swing Trading" usually means that you're taling home a losing postion, which is rather silly, but any trader (at our firm) can take home 5 times their equity without permission, and more if they ask. 5. There is no need to form an LLC to join a firm (I've heard all the "reasons")...you must be a live body to join. Hope this helps, call me and I will be glad to discuss things further. Don