Most of you are missing the bigger picture than 65% net or 29% gross. The buying power needs to be considered. Although it takes a while to get large buying power, I would choose even 29% of the gross with $10,000,000 buying power, than 100% of the profits with $1,000,000 bp.
I've read your posts throughout this thread. You are VERY knowledgeable about prop trading. So much so that I'd urge other readers to read between the lines and ask - how have you learned such particulars. Are you perhaps... a failed daytrader? If so, others should take your advice (as they should a winner who talks of how easy it all is) with a huge bucket of salt. Trading isn't impossible. It's just hard.
I been around the business awhile and one thing I know is itâs not impossible. The truth is most fail though. The reason was cost years back because rates were so high but overtime they have come down quite a bit. Over the past year though the market has gotten a lot harder were the rates for scalping are not helping. You have to play a bigger game now taking more risk for smaller profits. You really need to be able to play the market in a bigger way. The black boxes are really making it more complicated with crap bids and fake book size. You can get raped of spreads when trying to get out or you get no movement at all. There will always be very amazing day traders but itâs a smaller % each year and the real money is in a swing trade.
I think it's safe to say, then, that we are in agreement that one cannot trade spread or arb opportunities unless you have enough money (and ability to sustain a loss) to help the market move in a direction. If you are a daytrader you simply must trade directionally - finding fractals and not getting shaken off of a stock because of fake bids/offers. Agreed. And it's my own recognition of that which forms the basis of my own daytrading. I look to get in at my levels and hold it until it proves me wrong. 1 winner often pays for 5-6 losers. But yes, scalping is a completely random strategy at this point.
Brokerboy speaks the truth. With no money your best option (and probably only option) is to start at one of those shops that incubate you with a bad deal, then leave if you become consistently profitable.
You have to ask yourself a question. If you are a bigtime trader. Should I put $250k of my money in some (likely uninsured) account so I can trade $3-5 million at a firm that will get worried about overnight positions, will ask for more money when your account gets low, so you can get a 99% payout and 1/2 penny commissions or Can I keep all my money whereever I want it (Schwab, the bank, real estate, pay off mortgage) and have $5 million or more of capital from a well capitalized firm that rewards good results with more capital at a place without the best deal on commissions or profitsharing. For me, I had enough of all the deals that look good on paper, I prefer to sleep well at night, and if Im on my game, the profits are unlimited. The same logic applies to putting 20k up at leveraged firm, or trading $500k at a firm capital deal. I would only recommend a leverage deal for those who are small steady traders with very volatililty.
Where can I find info about Opus, or any other firms. I been trading very successfully at home, while a student. I have been doing about 30% a year on a high six figure portfolio, without leverage. I have taught myself everything, and would love to go somewhere to actually learn from others. But it seems impossible as most of these firms are shady churn and burn type places. I actually just had a phone interview with SIG for an assistant trader position. It went well, they will be getting back to me in a few weeks. But I know if I do get it, I'll be making garbage compared to what I've been making. I just feel like I can learn so much from others. Or am I expecting too much and should stick to what I'm doing?? Thanks!
Looks like you could teach these "veterans" a thing or two! 30% in this environment is flat out AWESOME!! Are you doing intra-day scalping or long term trading? Most likely you're doing the latter. Keep up the good work!
I know you're just giving an example but I have to add...for most people paying off your mortgage is not the best idea. Especially if you have a good interest rate (6 or lower) and if your in the first 5-10yrs of a 30yr mtg (the tax deduction from interest is highest at that point). Also, how does putting $250k at Scwab get you $5mil bp? I thought you only get 4x's? Happy Friday Jay