firms that don't require any trader deposit or desk fees or software feees are true prop firms and they don't hire anyone who don't make profits. they fire any trader who don't make profit. 80% of his customers would be gone than. it's over if traders put their own capital say 10K plus have to pay 20% of profits...why 20% is a lot of slippage. Don has always been against pay 20% of profits for using somebody else's capital if you ahve your own capital. This ultimatum or order from Goldman Sachs is just polite way of saying your operation is being shut down. the fact they even offer 80/20 plus having you deposit capital min $10K really says of their arrogance and think traders are stupid. FU goldman sachs and why do you need to spend $500 for a series 7 trading your account..more money for training course..total b.s. series 7 or these certificates from finra is for people working in banks or brokerage firms dealing with clients. any retard can trade their own account..but the industry doesn't want retards dealing with clients..giving bad information.. every industry has these 'certificates' the series 7 is like security gaurd certificate...anyone can take it.
Our $10K plan is accompanied by a "stress test" of sorts. We have accepted dozens of younger people, recent college grads etc. with that amount. Of course, all new traders start with 100 shares or so, regardless of deposit. The first few months are used to build up consistency and confidence, not overall dollar profits. If the trader feels comfortable trading more shares, then, and only then, should they increase their size. Our traders are treated as private fund managers, and are trained to all the tasks of such - risk control and accounting is certainly a big part of that task. Their "business within our business" is up to them, within risk parameters of course (we do our best to protect them from themselves). Just today, I had conversations with managers who had a few traders who have lost money or 2 months -basically said "fix it" - or "I'll have to." Now back to your Firm, LOL..... Don
Ok Don. Good answer. BTW, have you ever thought about running for office? You have a way with words that I'm sure would make even Harry Reid proud. Let's try this. So new guy comes in with 10k (fresh out of school youngster of course). So he is basically paying .0050 per share. Let's say he trades 20k shares a day (10k each way). That's $100 per day in commissions. That's 2k a month. In 5 months, assuming he trades flat gross (a very, very optimistic assumption), he will blow out his account without losing a single dollar in the market. Where am I going wrong Don?
I give Don 100% credit for that. The reason I'm asking him these questions is because I know he will answer them to some degree. Even if he is doing his best Harry Reid impersonation. Don's a former Marine so I have to pay him respect for that as well.
"True Prop" is being cut way back, as we have seen....now we see some fallout (not affecting us of course). Goldman Plans to Spin off Prop Trading: Report Post a Comment By Joe Rauch August 4, 2010 http://abcnews.go.com/Business/wireStory?id=11323310
Well my friend, evidently you haven't been to my boot camp (a free offer anytime, just for you). 20,000 shares per day! I would (and have) screamed at newbies for doing 5,000 shares per day without a plan. First couple of months, maybe 3 or 4 openings at 100 or 200 shares max. Then maybe add a couple of pairs and a child stock. More like 2,000 - 2,500 per day (after the first couple of weeks) - as I said, we need to develop a comfort level with these new people - no "cowboys" - no "grandstanding" - Maybe $10-$25 per day... I do suggest that, after they are are comfortable and consistent that they slowly move up to 400-500 per trade where applicable. These days, we use 100 share orders to "outsmart" the HFT traders (seems to work, and even if we do get front run, much smaller damage with 100 dhares). Now, I assume your Firm brings on more established traders and/or has a one-on-one system and wants higher volume immediately, and rightfully so. We want, as my brother says "butts in front of computers" next year and the years to come vs. any immediate "hit and run" (don't mis-read this anyone - Mav doesn't either, they run a good outfit, solid people). It's tough enough as it is, adding volume pressure just doesn't help. As things have changed over the last 18 years, we have modified our training to reflect these changes. Thanks for the Reid compliment (Of course you meant it that way, LOL), but I just respond openly - much to the chagrin o Compliance at times, but so be it. Don Can't wait to get back to Chicago - time to share few more bottles of wine my friend.
translation? what will this mean for prop trading in general? where will the money shift to? how will it affect the "outside" props? and will it finally increase volume and volatility now that the money is being pushed outside the bank walls out into the private sector of hedges and props?