EchoTrade - what's up with them?

drownpruf · Dec 10, 2013

Quote from chicagodon:

Not questioning the guy is banked, he def is and does well plus he has verified track record. I think his service is worth the $100 as he gets you into fast moving stocks at good breakout levels.. I just don't know if I believe the size he trades, he even will admit this day and age he couldn't replicate his $10k into whatever hundred million in 18months. But again if you had a guarenteed $40k a month (400 subs I've seen in the chat x $100) you have the cushin to go much bigger in certain instances.

Again against all other paid services I still think zanger is the best.
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The $500k a year in sub fees won't last if the guy is not on the record. Even assuming he's in cash due to microstructure (not being able to move his size in PCLN, for example); who cares as long as he calls the entry and exit in real-time? The chatroom guys aren't going to have issues with scalability.

Ironically, he would be doing the guys a disservice by moving size as you can bet your ass he's in before posting it to chat.

Of course this has absolutely nothing to do with Echo.

cactus_trader · Dec 13, 2013

I remember reading somewhere the top guys was tied to Liquid Holdings LLC "he founded ECHOtrade, LLC, which he developed from a single trader to over 400 professionals in its New York office alone. The firm generated more than $100 million in trading profits"

there is a difference from quitting and losing interest and I imagine they just felt it has run its course and moved on.

it seems 4-5 years ago there were way more prop shops. with the fewer shops around; the better it is for places like right Bright etc. good for them - profit share through attrition.

Satan's Helper · Dec 13, 2013

Quote from pairsarbtooo:

What happens in trading is most get sucked out of money when they are young, and never really go back. Therefore, there are not enough older guys to tell the young (20something30something traders) that all of this is a scam, go back to basics. So the firms and industry suck the capital from these young traders who have absolutely no clue that their whole world view of how to trade is wrong, and completely plays into the industry's hands. The middle aged guys who are developing an accurate world view are generally scared into working for someone else (nothing really wrong with that but it's certainly not why people generally trade), being beholden to a spouse's opinions (vaginalcontrol) or family obligations, and have no time to relate their experiences to the younger crops who just otherwise fail by design and have no clue there are other ways to succeed in this business. A small percentage of it make it and generally don't talk at all. Some make it and from time to time rant and rave about things in this business. Few people though actually listen.

This board is chock full of traders who have no clue. Who have never backtested (and found that short term parameters that generally don't work), who misunderstand the significance of fixed costs and soft dollar fees (commissions), and who fall in to the leverage trap without quantifying risk, volatility, etc. In fact, with all the new tech, I have found the younger you are the less problem solving ability you actually have, not because you don't have the tools but because you don't have the thinking ability. It was either never developed or it's remarkably atrophied. Too many video games, too much predictive programming from various media devices, and never trained in trivium quadrivium /critical thinking. A new generation of more compliant financial slaves. Especially if you did well grade wise in public education, you are the generally most handicapped for real world problem solving and critical thinking ( because the public indoctrination education system rewards obedience and compliance not formulating and thinking).

The biggest threat to a corporation is a threat to their capital, and anyone with great ideas and the ability to implement them is a threat. So they support engineering an educational system that makes you able to do some narrowly defined job, but without the confidence and ability to create and innovate. This is also why they carefully and systematically buy up all patents from young brilliant inventors(who create solutions with intellectual or physical innovations), and then shelve them until their current outputs outlive their useful financial lifecycle. So, if you do find a profitable method that kiills it, by all means don't share it with anyone, especially a firm that asks you divulge it, in order to "trade" with them. Extract the maximum dollars you can and never share it, never. If it works, don't sell it. If a firm asks you to tell them your system, create euphemisms (" identifies trends in the highfrequencysuckass derivative markets and capitalizes on the divergences in clearing times of the underlying contracts"). Never share your code or rules except give examples of risk management that are reasonable, and "acceptable." Your firm is there to clear your trades until you have enough money to clear your own, and to help you with leverage until you don't need it. You have a plan to exit when you accumulate enough capital do fund the next phase of your life. Remember this, they are not your friend, or buddy, and they will move in the direction of their profit only not in any perceived loyalty you might have. Sadly, this is one reason why they are dropping off. I have learned this through experience. It's directed at the 1% of you that will perhaps use it.

Put your money offshore and run it through various other country's entities and avoid all taxes that you can. Follow the Apple's or Starbuck's methods of hiding profit (Starbucks has net losses in the UK for over 10 straight years, writes the gross profits to their Netherlands mailbox corporation, pays no tax, and pays no tax in the UK for example) . Start thinking like this. It's a game and the real rules are not advertised on websites.

Really the only way to make it as a true trader, in my opinion, is to be by nature a non-conformist to the whole industry. If you learn what most people learn and do what most people do, you have the results most people get, which is in fact losing all of your capital. You have to seek out and follow the successful outliers. They are general hard to find, and they usually don't want to deal with you. They know the sacrifices they have made to rearrange their actions against the popular code. They worked hard not to be sheep and generally not going to show you the playbook, you kinda have to earn it. You will know when you are moving in the right direction by the events that seem to occur as you move forward. Red pill/Blue pill kind of stuff. In the beginning it can be very depressing. It can be so tough most people go back. Only for a few.

It's a lot like the advantage video poker players in the casino, they do long term math and feel they have an advantage. They bang away at their game hour after hour and lose a lot very slowing, but because they are pressing buttons and colors and noises abound, they feel like they are producing. Most day traders are no different. They are quite similar. Except, for day traders there are no comps, their capital is all locked away out of their control, and they have to pay other fees besides their lost capital. Any money they make is taxed. They bang away generally by themselves all morning long, while they give their human and financial capital to the large entities that make the rules. To succeed at a profitable trader or gambler you need to be very confident and do most of the things differently than the rest. You need to develop confident through real winning. My hero is more Amarillo Slim than George Washington.

The classic methods of finding trends has worked over time for the past 100 years. As government assimilates the free enterprise system, that will also likely come to a halt. After that government will fail, and the effects in the short term are unpredictable. Why firms are disappearing is explained by the intense regulation, traders doing too much frequent trading. Both of these are designed to put individual entities at a competitive disadvantages. Securities laws are generally not their to protect YOU, but to protect the big firms from the risk to their capital that would happened if YOU became really good.

RANT over.
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That is the best Fu(k!ng post/rant I have ever seen on this site...........................

I don't even know where to begin complimenting you. It is awesome all the way through!

pairsarbtooo · Dec 16, 2013

Thanks. Let's hope everyone who becomes aware will adapt and prosper.

ScalperJoe · Dec 25, 2013

Quote from Maverick74:

Yeah when Don said he had a confidentiality agreement with Echo he pretty much stated he took them over. Why he can't just say that is interesting. The more this industry consolidates, the worse it is for the trader. Less choice is not a good thing.
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Yeah, Echo had over 20 million in member's equity according to the latest SEC filing, so they were one of the bigger firms out there. I'm not sure if their traders would prefer Redi over Sterling though.

Although the industry is still consolidating, at least the series 56 is now being accepted at Bright, which is a good thing, especially since Bright allows overnights, whereas many other props don't.

dealmaker · Dec 25, 2013

Quote from Trader7793:

They were acquired by T3. A buddy of mine from my Worldco days traded remotely with Echo Trade and was given the news a while back. T3 even offered him the same deal he had at Echo Trade since he had been trading for a long time and not a newbie.
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Your buddy gave you incomplete information. Yes, they did offer the same commission and data rates as at Echo however pay out is less than 100%. I believe payouts were individually negotiated.

dealmaker · Dec 25, 2013

Quote from Maverick74:

Honestly this is shocking to me and I have no idea why Don is so tight lipped about it.

Since ECHOtrade founder was a former Bright trader, Bright may have been involved in negotiations and lost out to T3. This is just a guess.
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dealmaker · Dec 25, 2013

Quote from ScalperJoe:

I'm not sure if their traders would prefer Redi over Sterling though.

Having used both its a no contest, Redi hands down.
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gmst · Dec 26, 2013

My confidence in the prop industry has got shaken a lot. Echotrade selling itself off is similar to merril lynch selling itself off to BAC in the world of investment banking.

There are guys out there with these firms who earn half a million or more. But the sudden exit of one of the bellweathers in the prop trading world is........SHOCKING to say the least.

Result: Traders left with much very little choice as far as a reputed, big and with a long history prop firm is concerned. Sad day.

pairsarbtooo · Dec 27, 2013

I come to the thought that the larger entities are incentivizing (or in some way even threatening) the owners of these firms. Why not scoop up any little fish that with leverage could still rock the big wall street boat? Does anyone have any comment that the industry or govt itself is behind these closings for that type of reason?