Thanks Codetroll, The prop that I'm currently with suggests me to trade small. Like 100-300 shares to maintain my 5k. And I agree with sim trading, its not the same. I've tried it and its like playing nintendo or something. But anyways they told me as soon as I'm up like $100, stop trading. When I'm down near $100 stop trading. Since I know if i continued I would most likely blow it up faster whether if its profits or continuation on my loss for the day. So I feel that the prop I'm using does not force traders to trade excessively.
When you walk into a prop trading office and you look around... are there profitable traders. Ask them if you will be able to model guys making a living. If not - you are on your own. Are you the type of guy who can trade a 100 shares or less at a time until you become profitable? are you going to eat like a bird and shit like and elephant?
I traded at Assent with only a $5k deposit and had 65 to 1 leverage. That was plenty of money if I would have been a good trader, but I was not... for a lot of different reasons. Most of my problems were due to a lack of savings, not having a good strategy and poor discipline. I have known maybe 5 people who became good consistent traders and have passed the 5 year mark. Those 5 out of the almost 100 traders that I knew who failed were exceptional people. They were very insightful about the market and very, very disciplined in regards to trading. From what I can tell, each of them has a different strategy for making money. Each is also at a different level of success. They all started with no capital deposit or a small one like $3k or $5k (years ago it was more common to have no capital deposit) but now keep much larger amounts in their prop accounts, like $50 to $500k. A couple of them net seven figures per year. One big advantage of the successful traders that I know, was the fact that they had a good amount of money in their savings accounts when they started out, so that their lifestyle was not negatively impacted while they were learning to trade profitably. So they may have had like $75k to $200k in their savings accounts and only $3k or maybe $5k at the prop firm. This mean that they could live reasonable lives (they were not in NYC or California) and do things like take their wives and girlfriends on vacations and buy the toys that young men like, even if they did not make money that particular month. Having a decent savings account gave them the necessary time to develop strategies and the confidence and comfort to pursue good trades and allow their winners to run. Obviously eventually they needed to be able to make decent money or they would at some point end up depleting their savings. I hated my job at that time so much that I jumped into remote prop trading prematurely and did not have nearly enough money saved...this resulted in me having to work bullshit part-time jobs all hours of the night, just to make ends meet...and my trading suffered as a result. I think that even though a prop firm might only require $5k or $10 as an initial capital deposit, you need 10 times that amount in your savings to live off of... maybe up to 2 years. This will give you more time to learn to trade without doing stupid trades in attempt to make some quick cash.
If you want LEVERAGE, try futures or currency - huge leverage. You can make money or lose money faster with leverage. If you find a prop firm that gives good mentoring, go for it. Many simply take you training fee or enrolling fee w/o helping you. Those fees are often forfeited for giving you a chance to try out even if you don't any of the firms money.
I think thats the best way for beginners. Atleast your actually trading with real money and not sim trading. It also shows how emotions get in the way too.
wow, how did u do that? what strategies and winning edge did u have to grow $3K to $1million??? very cool .... if you could share even if it's for simulator account.
Excellent advice, first time in awhile that someone told the truth about how it should go down. To sum your whole post up: Scared money never wins. -troll
Kungfu, could you elaborate more on why you decided to go prop? The reason I ask is if you plan on making large chunks of change on a couple of trades, you might be better off learning about the options market, as one poster said already (more leverage = more gain/loss). I agree somewhat with your firm's trading concept, if you can't make money handling small amounts what are the chances if you increase? That's what their basically saying. The key is that you have to develop your own way of trading. Investigate things that make sense to YOUR brain. Not sure how your firm operates, but I hate firms that train their employees on only 1 way of trading, usually scalps, lvl 2. Its best to allow yourself to figure out what works for you and more importantly what makes sense to you. my 2 cents. -troll
This is like a baseball player announcing that he does not like batting practice or spring training because "it's not that same thing." The point is make it the same thing .. both ways ... put pressure on yourself in practice and relax during the game.
with an accurate simulator, its only different for those with issues with money. otherwise, if the fills are realistically simulated, its the same thing.