My friend runs a quasi prop shop were he provides the money and they and he overides the commission. He's got groups in russia and china and here. He has around 300 traders. He told me the other week out of the 300 traders 1 made around 800k and 5 others 100-200k and the rest 294 made between -$100k and plus $50k with 95% of them losing. Those are facts.
Things can't be going well for him. He provides the money and 95% of his traders are losing. But trading is getting harder and harder so they say. Must be those darn HFTs. Oh for the good old days when 90% of traders won and only 10% lost....
Yes daniel the key thing you said you used to work for . This if for 2012 and things were tough for many. I guess if a single guy can make 50k he's staying because he can't make anywere else
How many made $1-20k 20-50k 50-100k? Only 5% of Americans make over 160K a year. Is that surprising info? not really.
Is he doing the thing where he takes the opposite sides of their trades, and then the people who are "profitable" cause him to take a loss, but he can pay them with the winnings from the other trader's losing trades? So for example, that one guy makes $800k, which actually loses his company $800k. What'd you say, like 5 other guys make $100k. So that costs the company $500k. He's now down $1.3M. BUT, he has 294 guys who made -$100k, which actually made his company $29.4M. So he pays the winners the winnings and pockets the other $28.1M as profit.
I owned a Commodity Brokerage long ago, only one making over 500k(trading income) was me, 10 were making 50-250k, 20 were in house traders(retirees) renting a desk making 0-50k and only cause I allowed them to tailcoat some of my trades and the other 400 plus clients lost money. Time has not changed much thru the years, people won't listen, they won't backtest, open an account and know nothing and start losing.
Your friend doesn't have very good traders then. I know 10-15 traders that I talk with regularly that all made 250k to well over a million and have been for many years. I'm glad you shared the info, but I don't think it's a fair representation of day traders. Trading is a business like any other and you have to put in the time. The one thing your post does confirm is that a large percentage of traders do struggle. however, there are traders who make a good living...plenty of them.
And you are one of the traders who does well hafez, if I recall from a previous conversation we had. You should help your friend develop a training program, bc ditto an earlier post, those numbers seem very low for a prop shop. Am I right in making assumption he runs a BD and licenses software? Is that more what you meant by quasi prop shop?