Giving Up on Prop - What Next?

Discussion in 'Professional Trading' started by seasonedpro, Apr 5, 2006.

  1. Well after eight years in the business I am finally throwing in the towel on prop trading, just cannot make enough money anymore. Well, let me clarify. I make $500 to $1000 a day with no overnights for 20 days a month then get crushed one day to lose most of it. I trade a couple million shares a month.

    I got started in '98 at one of the best Day Trade shops in the country and made good money through 2003 even after decimalization and the bear. Whereas most of my peers from the heyday blew up long ago, my strategy enabled me to consistently make enough to live a nice lifestyle. I was never the big swinging dick of the room, but played a real risk averse game. I only traded when the market was moving, always traded on the right side of the market, and never allowed my ego to prevent me from telling me I was wrong about a trade and needed to hit a bid to get out. I was taught to never double down on losers and managed to stay away from this losing strategy until recently and thus the one big losing day a month.

    But the past year or two I have found the moves to be nonexistent and volatility in the Nasdaqs I trade to severely lacking. In my mind decimalization killed day trading and algorithms all but ended any sustainable moves. When I started trading I was going for half dollars and full points, now I trade for nickels and dimes on 5 times the size.

    My assets as a trader are my ability to read the tape, identify real buyers and sellers of any issue, and patience and discipline. I found my edge fading the Spoos and Emini to buy or sell relative strength. I am a tape reader who can watch every print in a handful of stocks at the same time to determine who the axe is any issue.

    Bottom line is I love everything about trading and don't want to quit. So I put it to you, how can I leverage these skills to get on a real trading desk somewhere. A lot of pros at the big BDs scoff at day traders but I know I can better fills than many of them. I have seen more lazy MMs who just run a stock up to get the order filled just to have it drop back down when they are done.

    I'm targeting buy-side hedge funds, asset managers, mutuals, and pensions right now (sell side seems to tough to crack) but even with an MBA and experience filling institutional orders I am having a tough time getting a foot in the door.

    Seems like a lot of these positions are advertised on Bloomberg but I gave mine up a couple of years ago. I am ready to move to just about anywhere but NYC to get a job but cannot seem to find an in. So what moves should I make to get a trading job? And I won't be offended if people really believe I should just hang it up, but please be critical and useful.

  2. OK, no responses for four hours so I guess that means forget about it. I'll try one more time on the front page then start filling out my application at Dennys.
  3. The problem has nothing to do with prop firms so why do you think leaving a prop firm would solve it. Adapt or die as they say :D
  4. No I agree, if you are going to trade professionally for a living prop is the way to go. My problem as I stated in my first message is that I haven't been able to adapt to the ubiquitous low volatility trading environment that we are stuck in and just cannot make a living banging out trades for myself anymore.

    That said, I do beleive in my ability to achieve superior execution filling orders for some buy side desk. It is a whole different ball game than trying to hop on MRVL or BRCM for a quick ride. Just wondering what's the best way to get on a desk somewhere or if it's even possible with my background.
  5. I know volatility is not what it was in the 1990s and 2000 - 2002 but there are a lot of stocks that still have decent intraday swings as well as e-mini futures. Market makers are still bending us over even though spreads are tighter so I doubt you couldn't still find some profitable opportunities.... more fun to trade for yourself then to push other people's orders I would think.

    What opportunities do see no longer existing?
  6. What do think of Toronto? How much capital do you have? Can you program a PC?

    First off...
    We would have to send you to a re-eduction camp north of the Arctic Circle...
    For 3 months (3 years if you believe in TA :) :)

    You have very valuable experience...
    But if prop shops have gotten too tough...
    You should go sideways into quantitative analysis and "risk arbitrage" hedging... average duration hours/days.

    In 12 years I've gone from flipping for 1/4s at $30/trade...
    To scalping for $0.08 at $3.00/trade with near total automation...
    To make roughly the same net profit...
    But my quant methodology works as well as ever.

    Best of luck... you are very talented.


    :cool: :cool: :cool:
  7. Choad


  8. The big difference is the bid ask spread, which was as wide (.125-.25) as the typical move for the stocks I trade, now it's a penny. The moves today are slower and less sustained. And although it is still possible, it's much more difficult to ferret out real buyers and sellers because of ECNs. Program trading has really screwed things up as far as my style is concerned. Most importantly though it is the volatility.

    I know there are guys making money out there but the hold time is much longer and very different from the style I cut my teeth on.
  9. Nice Choad, already deprecated myself with a Denny's app but you had to bring up that link ehh? I can take it just hope you can deal with the bad mojo you just put on yourself big tymer.

    Just come up with something a little more original next time you go for the dig - that one is probably about as old as your Dode.
  10. Since you have an MBA
    You can get jobs as long as you keep calling people up and maybe meeting them

    Most likely meet them

    As for trading,

    Most scalpers eventually move up to longer time frame investing.

    Maybe you should work on a longer time frame.
    #10     Apr 5, 2006