Maverick74, I just checked your site vtraderpro.com under About Us -> Clearing Firms you have Merill Lynch and MF Global. Are you still in business ?
After speaking with Mav recently, I have to say he knows the in's and out's of the (now broken) prop model. Wish I had spoken with him before letting my S7 expire, as well as other issues we talked about... Thanks Mav! Glad to have you here amongst the idiots in the 90%. And, no Atticus is Far from that classification. Btw, atticus, I am still waiting on my pm reply. Lol!!!!!!!! J/k! Hope all is well! There are a handfull of real traders here, and it takes some time to figure out who is full of shit and who isn't on certain topics/trading styles... Strange board, but once a person figures out who's in the know, and who's not, ET isn't that bad I guess.
I know quite a few backed groups in NYC with a profit split with traders managing multi million dollar books. and none of the legit places charge any kind of thousands of dollars/month "desk fee". That's like paying taxes twice.
What typically happens is this. Profitable traders who are undercapitalized in their first decade of trading who don't have much in their bank accounts go the profit split & backed trading route. This is a good way to start a trading career. These places typically share % split on a quarterly basis and in also withhold a chunk of it into a "bank" which trader must contribute to out of his paycheck until it reaches 6 figures. This rises too as trader manages larger book. Eventually this "backed" trader is essentially financing his trading with retained profits at the "prop firm" and is not much different from a money up guy except the ongoing profit split. So one day after years and years of paying a split to the madame, many backed guys simply leave when they've made enough, join money up prop b/d such as a Bright Trading put up half a million, trade a multi million dollar book and keep 100% or even start their own funds.
This is exactly my point, and purpose of my original post (although I have found the various debates interesting). Most prop traders in London understand the model inside out as you would expect. But, unfortunately the model is now a heavy hindrance. £100k trading account is roughly breakeven. As we all know markets have become far more efficient and far more sophisticated as has the machinery. We all tend to concentrate on the 4-5 markets we have always traded. Unfortunately, everyone else does the same. Many of the bigger traders have reduced their trading volumes and now more or less just event trading, hitting the market in size (and betting the house) on huge events, a strategy I've seen many times destroy accounts. I will continue to prop trade but I've now just started to test spread betting accounts. Not sure if you have these in the States. So far, very interesting. Thousands of trading options, reasonably narrow spread, speed seems fine (yet to be tested fully during high volatility), no desk cost and applied costs, and tax free. If all goes according to plan I may be able to stop getting the 5am train into the city.