Hey guys, I am new to this site. A lot of information here. Quick overview: I have a bachelors in Business Management and Applied Economics, taken online trading course, reading as many books as I can, I am currently learning to day trade using fake money. My friend who owns a trading firm with his partners told me that prop isn't the way to go and that retail is best in terms of managing monthly costs. Unfortunately, I have limited capital to put up for a retail account. I have maybe 5K capital I could put up, so retail isn't really an option for me. My question is I know there are tons of company that let you trade firm capital. But are there really any QUALITY firms that let you trade 100% firm capital and share the profits? I have come across some firms, but I feel like unless you are an IVY LEAGUE whiz kid that you have no chance. All they want is quantitative programming/engineering nerds. So what is the best route I can take with my limited capital? I would like to actually apply to big trading companies and work for them. But like I said the firms I found want top talent the best brains. Which makes sense. I don't want to get scammed or a join a firm that isn't going to mentor me. There are so many prop firms that I don't know where to begin. A little bit of advice would be greatly appreciated. Thanks
> So what is the best route I can take with my limited capital? Get a job. Add 100.000 to your trading capital. Learn programming. Finished.
Well, when reality meets people with delusions, reality wins. He has ruled out any alternative path - so adding to his capital is the only way. I.e. a job.
if you can get a job with buy side.. or even sell side.. in derivatives.. DO IT .. experience is what you lack.. find the best you can get.. and put some time in.. learn to enjoy the process... because it will be one.. most likely 5k is a number you should not trade with at least not in the respect that your thinking about.... put it in a IB account.. or wait thats a 10k minimum.. put it in a good brokers account.. trade small on a larger time frame.. and start working ... without a system or a really good understanding of derivatives.. the market is just gonna beat you to death.. you'll spend countless hours and maybe make decent gains.. but your more likely to do better with patience.. and more capital.. overtrading is exactly what most people do... including myself.. if i could get a job at a buy side or sell side firm.. i would take it.. i would still trade my own account though.. which is totally doable..
I couldn't have said it better myself. It's truly a delusion to believe someone will give you their money to trade. Unless you can somehow manage to convince these people that handing you their money is the absolutely best possible thing they can do with it to earn a return, it's not going to happen. The truth of the matter is, you'll probably fail. The only way you can surpass the learning curve + 95% + failure rate is if you have enough capital to make it through all that. All other things aside, scalping & HFT, which was the most risk-averse of the day-trading strategies is on its way out thanks to Dodd-Frank. Your best bet is to join a firm and spending times learning while managing your losses to make sure you don't blow up. Statistically speaking, you probably will still blow up. If you happen to be able to keep your head above water, you can start thinking of building a few years of a solid track-record. A broker-verifiable PnL statement is the only chance you have of getting someone to give you $$ to trade. Even then, it's a long shot. You won't make it unless you have a job to support yourself and pay the bills. Trading is one of the most difficult businesses on earth to be successful at. You have to understand how likely you are to fail before you go into it. otherwise, you can find yourself in a psychiatric-ward one day. About a decade ago, I was trading with a small group on 34th and Madison. One day one of the traders renting desk space smashed all his PC equipment and threw some stuff out of the 4th floor window onto 34th street below. He then claimed he was a Freemason and possessed by Satan. The moral of the story is that if you have unrealistic expectations and live in a fantasy world, you'll be brought back down to reality the hard way.
Thanks for the replies. Let me clarify, I fully expect to have a second job preferably in the financial sector. It is unrealistic at this point to be devoting full time with 5K. Even if I had 25K and a retail account, I would still not be a full time trader. I believe the large learning curve takes time to master. So for 2-3 years any profit I do earn has to go to growing my account, not paying my bills. Furthermore, that amount might be very well be small. That is why I know a second job is definitely needed. I just was wondering how some gets into equity trading for a large company. Even if it means starting entry-level and not being on the floor. I guess with the rapid advancement in technology, most large companies no longer have traders, just bots doing their ordering. Any traders they do have are probably the quant engineers. Am I correct in this assumption?
Well he was honest with me and said that going prop I will be facing high monthly costs in the first year and would be make very limited income. I talked to a trader who started prop with 5K and later switched to retail and he basically shared the same advice. He said its hard to build your account the first 2 years so having those monthly costs just eats away at your portfolio. He encouraged me to go retail which is 25K+, but again I don't have access to that type of funding. I was looking at financial services firms in Chicago, I would like to work for investment, hedge fund, financial services type company. Obviously, I wouldn't work the floor or manage portfolios, but even at entry-level assistant in those companies I feel like I could gain some valuable experience for later on when I decide to become a full time trader. I was just wondering if someone wanted to work for hedge fund, financial services company, or trading company, at an entry-level position what is the best way to go about that approach? Lets be realistic none of those companies are going to let me trade their capital, so I'd rather get an entry level job and at least gain some experience with them and possibly advance within the company.