It sounds like you are mock trading for 3-6 months, leaving you with the impression you are trading real capital. With this model they can find profitable traders with little cost. You have to dig yourself out of the commission and trading hole you create before you get paid. By setting the bar at 10,000 shares initially most will bury themselves in "losses".
I think your spot on... Good pick up! You will be buried in losses after commissions and trading losses... The firm won't have lost a dime and if you become profitable then they get 100% of the profits till you pay back your "fake loss". If this is what's going on and they are not being honest with you then you should seriously consider why you would want trade there. Btw that commission is is ridiculous!! I pay $0.20 per 1,000 and there are lower out there... Commissions and ECN fees will kill you if your not careful
But they bet on non experienced traders. How they will know who will become profitable and who will not become profitable. They said they provide TRAINING. If their system works then there should be at least 20 traders in the floor. I can see only 5 working and 5 trainees.
Look my advice is this (do with it what you want)... No one can really teach you to become a profitable trader. They can point you in the right direction but in the end it is down to you... there is no holy grail or secrets etc. The basic important lessons can be learned from a few decent trading books... Market wizards I and II, Trading in the zone, Way of the turtle and One good trade... these were all helpful for me. EVERYTHING else is learnt by you and only you and this is through actual live trading with real $$! My advice is to look for a reputable prop trading firm... don't pay for any training / bs like that. Do you research and find one that is good with fees and has a good reputation. Also it is really important to have profitable traders around you to learn from or help mentor you as your learning. In regards to Summit I cant only go off what I have read here (I haven't done as other research on google or of that sort) and my advice is that your best to stay clear of them unless you want to waste a couple years of your life This is just my opinion and you can do with it what you like... Best wishes in your trading career!
Think about what you said above: 90% will fail. Each newbie is given $300k to trade. Commitment is 6 months. Minimum is 10,000 shares. If they start with 100 students on Jan 1, 2011, by June 30th, 2011 the firm will have lost $27 million of their $ capital. (90% failure rate is 90 students multiplied by the $300k they each lost) How can the firm stay in business? As others have mentioned, the black box is a simulator! For the firm, it is heads they win, tails the newbie loses! With the black box simulator, the 90% of newbies who flunk out will pay the commissions to the firm. ( 10,000 shares times 100 newbies x 6 months is a commission profit of about $720k for the firm) This is pure profit for the firm since their capital was never at risk in the first place. With this profit from the flunked out newbies, they can pay the 10% of the newbies that are marginally profitable after deduction of commissions. The problem is that once the 10% profitable newbies figure out that the pasture is greener someplace else, they will go to a real shop and now the firm has to recruit another 100 newbies....Thats why the firm asked the traders with 5 and 13 years to leave. They would have figured out the black box simulator in 2 seconds. The best advice was given by PropTraderMTL. There is no magic bullet to make a newbie a seasoned and profitable trader. It takes thousand of hours of screen time, lots of self study, appropriate risk management per trade/portfolio. Even then most folks blow up 1 or 2 accounts before they get it, if ever. Good luck, but don't believe everything you hear. Most of the time it is too good to be true.
More likely this is them: platinumplustrading.com Why does 11 Broadway ALWAYS serve as host to shady firms? (Boesky's office in the 80's was also in this building) Also, notice the software they are pushing - something branded Platimum Pro which is nothing more than Sterling. I think you guys are right about it running thru a blackbox.
After reading through this entire thread, i am not sure what is what. i am sure most of the responders are seasoned or professional traders but many of the responses make no sense. The formula he said is trading profits - loss - commissions - 50%. You are never responsible for any money out of your pocket. So, unless your commissions are more than 50% of net profits you trader still gets something in hand. If commission is more than 50%, you don't owe the firm anything. Those who are claiming this set up to be fake trading, I don't see how it can be. If they pay some money to some people who are profitable on this "so called paper trading", what does the firm make? It all does not make sense.
They are reversing your trades. They are 90% profitable. The black box reverses it. So they earn a lot of money, they don't mind paying out to 10% of the winning traders, after a while, they don't reverse those winning traders anymore so they even increase their profitability. It only works when the 90% losing traders really believe they trade with real money and they believe they are losing money. They are smart, they are doing my masterplan