background of trader

Discussion in 'Prop Firms' started by roumeo, May 7, 2002.

  1. roumeo



    Since 95% of day traders are not successful. Is it meaning that when trading firms hire trader, they won't care your background, your qualification. They just pick up person from street and then let him/her trade in the company?

    I am very confused what those day trading firms are doing. Is it meaning that day trading jobs are the easiest job to get?

    Can you guys tell me the entry qualification for Worldco, generic and so on? I really want to know it more.

  2. The entry qualifications at those firms are: 1) enough money to cover the initial deposit, and 2) enough intelligence to read the Risk Disclosure document and sign it.
  3. Treykool


    From my experience, firms that have a minimum capital requirement (20-25k) are absolutely non-selective when it comes down to the quality of applicants. They pretty much hire anyone. Try to find a place that actually interviews you and doesn't first ask you how much you have to put down.

  4. liltrdr


    The reputable ones have the risk management to stop a huge trader blowout so what do they care if some guy burns through 25K?
    These firms offer a real opportunity for wealth accumulation to those w/ out fancy degrees, blue blood or a trust fund.
    There are some heavy hitters at some of these firms. Both trader and firm win. Firm makes more money of a trader who trades bigger size. Trader makes money w/ more size. Everybody's happy.
  5. roumeo


    Hi, Dear all,

    Thank you for your replies. I appreciate it.

    Now I got offer from some company which doesnot need my contribution and I don't have to pay the loss. It is a reputable trading firm in this industry...

    however, I just feel that it is too good to be true, but this firm doesnot have to cheat me ya... I am a new guy in this industry...

    SO i am wondering what is going on in this industry, and how can they hire people, and what quality are they looking for?

    I will appreciate it if you guys can give me some hints.

  6. ktm


    I'll give you a hint.

    There's no free lunch.

    The firm will make commission dollars from you - whether you win or not. The more you trade, the more they make, that is certain. If you are not making winning trades, your losses and commissions will mean that you will run out of money.

    That's the deal.
  7. roumeo


    Yeah, it is true that those trading firms will make money from commission. But if we trade the money from the company, how can they make money. whatever loss we have is all from the money from the company. So that is the question. trader doesnot lose anything except time and opportunity cost. Do you guys can give me some idea on that?

    Thanks so much
  8. cashonly

    cashonly Bright Trading, LLC

    1. If someone puts up the money
    2. Eats the losses
    3. Teaches you how to trade

    Go for it. Just make sure you don't sign a non-compete and that you can walk to another firm at anytime. When you start making money consistently, go to a solid firm that gives you a better deal in commission and let's you keep 100% of the profit.

    The thing that baffles me is that traders start at these type of firms, learn to trade and do well. But then they stay there with the company taking a % of profits and charging high commissions and ticket charges. If they're really profitable, why don't they take their talent and get a better deal?

    BTW, with the offer, what are the commissions? how much profit do you get to keep?
  9. WarEagle

    WarEagle Moderator

    I think ktm said it right...there is no free lunch.

    Remember, the losses and commissions/fees you rack up during the learning stage will have to be paid for first (out of your share of the profits) before you ever see a dime. Its easy for someone new to trading to hear the sales pitch and think, "Wow, if I make $100k and I get 60% then that's $60k...much more then I make at my job at Taco Bell." They forget that there might be 6 months or more where they lose money (and much longer (if ever) before they hit 6 figures). If you drop $30k during the infamous learning curve, you've got to make $50k + enough to cover commissions just to break even (with a 60% payout). And that's assuming they let you hang around long enough to make it back. And you at least have to have enough money to live on while all this is happening (remember, when you quit Taco Bell, you lose the food discount).

    I remember Hitman mentioning that sometimes his firm would forgive large deficits and let someone start flat again...I can't imagine this happens much, and probably only for those whose losses were equivilent to the commissions they had paid the firm. Otherwise, why would a firm throw good money after bad?

    This is just my take on what I've learned about prop trading over the last couple of years, mainly from members of this website. Since I haven't traded for a prop firm, I defer to anyone with personal experience if I am incorrect. Personally, if I ever went pro, I would go with a firm that required the $25k. Fees are better, payout is better, and they seem to have a genuine interest in keeping you around for the long term.
  10. Are you saying that he should just use the other firm to learn and take his initial risk and then have no loyalty or thanks and leave for the best deal. Seems to me a good trade-off to sign a contract in exchange for teaching and risk adjustment. If it was just "training" that he had to pay for like some firms have then he should sign nothing. But if the firm is taking his risk, then he should be willing to sign a contract.
    #10     May 8, 2002