Ok Thanks, but that has nothing to do with proprietary trading, its some kind of "pseudo" proprietary trading. It stinks. Because, if I want intraday leverage, there are better ways to get it for example using CFD's. Proprietary Trading is this: - The Prop Firm provides 10 Million to the trader - The Trader can then use the capital to trade with - The profits will be shared 50/50, but the prop firm takes the risk of a loss Everything else is only geared torwards the interest of the prop firm, not to the interest of the trader.
Ask yourself this question: Would you loan somebody 25k for this same position (30k position - 5k trader capital) and allow them to carry it overnight with any losses greater then 5k being your responsibility. I highly doubt it.
These shops are mainly for DAY trading... my average holding time is about five minuste, holding until end of day is extremely rare for me. I'm the type of client those shops love. Bright Trading, and Echo if you have more capital, may be more suited to overnights.
Ok, I see your point. There are a few equity props that do NOT take in capital contributions or charge for training new traders, and they absorb the risk of loss, however those firms are considered the "true prop" model and are the exceptions. Also, they cater to recent college grads, and not to experienced traders. I had never heard of a "CFD" before reading your post, so thanks for sharing and here's a link if others are interested in knowing about trading CFD's: http://www.contracts-for-difference.com/trade-cfds.html
"Because, if I want intraday leverage, there are better ways to get it for example using CFD's. " cfds are very lmited instruments to trade with. they take time to put up and the costs to create are high. you are limited to which stocks cfds can be created from. they exist primarily to avoid the stamp tax in the UK. they are considered to be gambling instruments in the US . therefore they are not allowed.
Good info. The op seemed to compare trading CFDs with the prop firms in the U.S. that trade equities. Leverage, of course, is a double-edge sword, hence even trading CFDs are high risk given the amount of margin involved.
A true prop shop will give you capital to trade with, and train you. I worked for a deposit shop first, got 0 mentoring, and wasn't able to hold positions overnight, which makes sense. Then I was recruited by a TRUE prop shop, and can't hold overnight either, but was given training (not much, you still have to be a good trader), but watching other good traders trade, and having them give you pointers is very helpful. True prop shops need to get low commission rates/ clearing costs, etc. This can only be done by doing huge volume, or ripping traders off. So either swing trade using IB on your own, or do day trading, with a true prop. I wouldn't waste your time with a deposit shop.
Which firms have you guys come across that that are "true prop" shops? I've worked with Keystone, they had us pay for a training program but we traded firm capital.