I am a new trader that has spent the last 8 months studying various material and paper trading. I am now at the point that I feel confident in my ability to make money consistently in both bull and bear markets. I have a limited amount of money to get started with and am weighing my options as to just open a retail account and swing trade my way to the rich and famous, LOL, or deposit my money with a group and trade thier capitol. I am just concerned with the security and reputation of getting involved with someone willing to give me 100,000 of thier money to trade. I mean if I deposit 5,000 with them the first thing out of the gate I have a trade go wrong am I just going to be screwed out of my 5,000 and told to hit the road or what? If that is the case I would rather open my own retail account and plug away with base hits that I feel comfortable with rather than being under pressure to swing for the fences while they sit back and wait for me to incure a 5,000 lose so that they can say , sorry we don't think this is for you my friend but thanks for trying and good luck. I have been in contact with a prop firm in California called CY Group Trading Equity Trading Group. The url is http://www.cygrouponline.com Can anyone throw thier two cents worth in regarding this company and or my situation? Thanks a Million, 2TradesADay
I'm no longer w/ them but they're a good group. laser, however, was going downhill hence my reason for not being w/ them any longer. also fyi, they may lock you from trading if your trading capital goes below $2k at which point you may have to deposit add'l funds. double check this.
2TradesADay there are a few things for you to keep in mind concerning these prop firms that give you leverage off of a $5k deposit. Because of the nature of their business model they are hoping that you care about the $5k that you put up as an initial contribution and will not do anything stupid and blow the account out in a few days or weeks. They are probably hoping that you will start off trading 100 and 200 share lots and trade less volatile stocks. If a new trader starts off learning how to trade doing 100 share lots of stocks like TSO, FTO, AKS or ESLR...etc then the likely hood that they will immediately lose the $5k and some of the firms capital is very minimal. They are hoping you will not go and immediately buy/short $100,000 worth of stocks like POT, AAPL, RIMM, VMW or ICE and sit there and get smoked for 2 or 3 points before closing out the position. Experienced and well capitalized traders make lots of money trading stocks like that, but under funded new traders...who are daytrading, will most likely blow their account out, without even giving themselves a chance to even attempt to learn to trade, or develop a good system. You have enormous control as to how quickly you lose that $5k deposit, not the prop firm. You can realize that simulated trading is not the same as trading with real money and that trading small lots of non volatile stocks, as well as being disciplined enough to set small daily loss limits and stick to them... are all techniques to keep you in the game longer.
you can do better elsewhere, at least for rates... if you're looking to trade of the laser platform try JCTrading
I appreciate everyones input and opinions. All others are welcome. Trader7793 I agree that a controled low risk approach is a great way to preserve capitol and that is the style that i have worked on building over the last 8 months. As per the difference in paper and real money trading is concerned I can see how that is true. The emotions brought to the table wheen you have hard earned cash on the line are quite different than a trade on paper that is only going to cost pride. I have been a semi pro poker player as well as a self motivated and taught small buisness owner for the last 20 years. This has given me a solid foundation in money and risk managment which I believe will be benificial in keeping the emotions in check where they belong. The reason I am in the 5k camp is that I realized a long time ago that making money off scared money is improbable at best and usually impossible. 5K is what I can afford to put at risk with out the fear of losing due to trading errors, the fear comes from years of seeing deceptive practices used to fleece people from thier money, and this is what I am wanting to avoid. The slippage in a real money trade is something that I will have to get used to and am not sure as to what to excpect when it comes to this, I will try to minimize this by trading equities with an avg volume of 500K +. Should help minimize this factor ? What other differences do I have to look forward to that I am not seeing upfront here? Again thanks to all who have reponded to this post and I look forward to hearing from more ET users. 2TradesADay
2Trades Be sure to read their full contract. I've been working on a deal with them for a little while now but hit a snag due to some of the requirements in their contracts that they asked me to sign. Don't get me wrong - they've been up front and honest about everything I asked them about. In fact, them, Chimera in Boston, and Bright seem to be some of the only firms who are open about their offers and that's a great thing. Just be sure you read the entire contract, each part, and fully understand what you're signing and the post-Membership implications of it. All The Best Dave
Thanks Schrader, I am yet to figure out the software for Laser, LOL. Maybe I will stick with retail at TOS.