im flabbergasted at the amount of credence you guys are giving these agreements. non compete clauses arent worth the paper they are written on. the only time they are is if you take something proprietary other than that you can move on with out much hassle. I dont think GH's is litigious and if traders want to leave that place no one is blocking the door.
If you are correct in saying that the people who leave go from one prop to another and are looking for scapegoats then why don't they complain about all the other shops that they worked at also? Sure you may have a point that these traders signed the deal, but if the deal is so great or effective then why is it rumoured to be changed in the future. But you call the traders that leave lame and I would like to remind you where they learnt to trade. If a firm is going to take credit for producing successful traders then surely they have to accept at least partial responsiblity for those who fail to make the grade. I am just trying to play devil's advocate here, and have no public opinion of the firm in question. As for good traders wanting to leave, well why wouldn't they want the best deal for themselves? Its every man out for himself these days, you are acting as though they owe the firm for the opportunity, but they don't. If a prop firm hires you it is because they want to make money for themselves and believe that you have the tools to do just that. Its business, not charity. You call traders greedy and act as if all these firms are above greed themselves, well they are not, they look out for themselves first and so should you! You talk about welching out of a deal, well what if you change your mind and want to quit trading? The fact is that these firms are profit driven and so are motivated by greed also. I notice that you try to put all the negativity on the traders, such remarks as lame and greedy. You are right it is give and take, so long as there is an equal amount of giving and taking. I think all prop shops should be forced by law to reveal their failure rates to newbies when starting, at least then they cannot complain down the line that they never knew. Many firms are reluctant to reveal this however and that is why so many people complain later IMO. I just remember that dentist from Atlanta shooting all his colleagues becasue he felt misled about his likelihood of success, he had been churned for about $600k inheritance, like tobacco trading should have a government health warning, LOL. I would just like to state that my reply is in response to the Boblman and I am just highlighting what I perceive to be flaws in his arguement. As I said I am trying to be objective and intend no offense to be taken by any particular firm, I just wanted to state that up front.
Why does everybody think they even need a prop shop to become a trader? I have a "real job" during and very successfully trade options spreads and forex (usually only 1-2 trades per month) and have done very well with my account over the last couple of years. I get home from work knowing I have a good salary, health insurance, and relative stability. Then I look at the charts and decide what to do for the next day. I have no desk fees, nobody churning me, and free EOD data from yahoo. My training consisted of Natenberg's book on options, my backtesting software is MS excel, and I started with 4k seed money 2 years ago. I'm fortunate that my "real job" involves trading and the markets - but my own account doesn't even deal with the markets I'm involved with at work. I consider myself a trader, and in a few years I'll may be doing it full time. You don't need a prop firm to be a trader.
I work for a prop firm that caters purely for experienced traders and it works great. I do think that the prop model can be successful. Where I think it usually fails is in the desire of most firms to become too large, and especially to hire and teach newbies, who are a substantial risk. Teaching trainees is risky for firms and obviously a trainee will get a bad deal relative to an experienced guy for obvious reasons. The problem is that at which point do you determine a person to be experienced. I think some traders could be considered experienced after 1 year, whereas others 3 years later are still trainees. I think prop firms need to be more progressive and less restrictive in the deals offered to trainees if they want to succeed. So if a trader does amazingly well after a year or two they are not stuck in an obviously unfair contract relative to their ability, in my experience that is where the most resentment is born. Such traders are not greedy they just don't like paying for the tuition of all the less successful trainees, trading is not a socialist environement. If I owned a prop shop I would only deal with proven traders, offer them a great deal and keep it small and manageable to ensure that everyone had the best opportunity to fulfill their own potential. That is just my opinion though!