Don, Its great to hear that your firm practices good money management and guarantees an amount of money. What other steps has your firm taken to protect your traders. Is it narrowed down to protect each individual? When you take strong steps to protect each individual at a detailed level, I think it forces the overall company to have stricter money management. Are you a leader in this area and set apart from the rest...is this part of the reason why your firm is successful as it is?
We pride ourselves on our newest, latest, and "coolest" risk control software (upgraded 2 months ago). We can monitor by trader (up to the second), by stock (in case there is another Enron), by percentage of equity, and have the ability to intervene if absolutely necessary. We attempt to contact the manager, and the trader if there is a problem, if for some reason we cannot, we can take control of the positions, and close them if needed. We show all of our new traders the system in Las Vegas when they come for training. Every trader goes through a rigid "New Trader Orientation" so that they know what they should not be doing, and they know to report to their manager if there is a problem....which is usually the case....but "just in case" as they say, we hold the control in two seperate locations, as well as at Spear, Leeds, and Kellogg. Another point is that we have our money in the firm, not shareholders or "other peoples money" as it were. We are careful to spend where needed, and not waste money on frivolous things. We are proftiable every year, but not excessively so at the expense of the traders. We prefer to stay in for the long haul, rather than make short term profits. Good question......hope the answer helps!! Don
Posted by Bone Insist that you have your own account number at the firm, and specify that your funds are held as "segregated U.S. customer". Don, I am glad to hear about the things that you have in place...sounds like a good plan to me. What about Bones' question? In addition to the orientation that you give your traders...are they told about "segregated US customer" and your own "account number"?
Echo has very poor risk management. It's almost as if everybody is out on their own. I have been to the dark side, but the Bright side seems better.
I'm not sucking up - it's a caution. I was comparing the two, but not sucking up to Bright because I have no affiliation with him or the company. I can tell you that "alarms" really only go off one time with Echo, and I guess you can tell when that is.
mainly risk management software, not keeping money for 1 year, network with other remote traders (very good idea that I saw on Bright's website - can be done on Echo, but wasn't). In no particular order. Echo is trying hard, but they need to try a little harder. (this is mainly for remote traders) I didn't like the Sterling software that Echo offered, but tried to make the best out of it. I have seen from previous post that software from both places can at times be poor (from the past on Bright, because I don't know about recently) another charge is that you have to pay for annual membership to the Pacific Stock Exchange which comes out to about $350 - If I remember correctly, because I didn't get anything about this charge until a later date.
There are indeed prop firms that give traders statements with their own account numbers. Maybe Bright doesn't; but he shouldn't say "it doesn't work that way". Maybe it doesn't at Bright, but that isn't the last word. Any trader at a prop firm that shows a credit balance needs to be able to insulate himself - by contract, statement, or otherwise, from the other risk components (traders) in the firm. I've seen it happen.