That is flat out wrong. It depends on your trading style. The leverage a prop firm will offer you is a huge advantage when used correctly on some longer term trading styles, like arbitrage. Also keep in mind the ability to compound your money faster when you can effectively use it in more places at once. I'll give an example. Say you swing trade stocks and risk 1% of your account equity per trade. You also trade futures, maybe over many days as well. You have $50k to trade with. In a prop firm with, say, $15k in capital, you can trade your stocks and risk $500 per trade as if you had the $50k in your account. If you have a rare, longer than normal drawdown, you know you have the money to back it up. But in the meantime, you still have $35k to trade a futures account (or buy revenue property, or some other kind of investment). There's also the advantage of not having to pick which of your valid trade setups you'll take based on margin requirements. If you have a positive expectancy system, ideally you want to take every trade that your system signals. In a retail account you might not be able to do that because of margin requirements. Not a problem at a prop shop. I trade mostly longer term strategies at a prop outfit because I can do it without tying up a lot of capital, which I can put to use elsewhere.
i think getting a group and then joining a shop is best... you have much more power as a group... and you can secure low rates. i been shopping around for a new place but want to join up with a few experienced remote traders who do more than 30K daily. I think I found a good deal maybe we can pm each other and see what other is out there. Lot of prop shops offer remote so location shouldn't be a problem. Any feedback would be great. Thanks.
For a newbie looking for a prop firm.... Someone stated that prop firms want 5K to start, get you in there, get you to churn & when you're out of capital or bled out give you the boot. That guy was as RIGHT as RAIN. The prop firm business model is all about having a desk full of traders generating trading volume which inturn generates commissions. No where in their business plan is an objective for you to be profitable (Nice if it happens, but not their objective) Thats not to say that there aren't guys out there making money and sometimes good money. There is and their numbers are small. Sure there are million dollar hitters (usually 1 to an office), and even 6 fig earners but they are 1 in a 100+ and roughly 1 in 50, respectively. Daytrading is a hard game to be consistenntly successful at. It takes a certain kind of personality. You have to make trading decisions in the blinkof an eye. Even big swingin dicks like marty Schwartz says that he can only go on profitable runs for 2 weeks max before he starts to experience "battle fatigue" and starts to get sloppy. Some might disagree, but start off ina larger time frame like end of day. learn to take/objectify and handle risk were you have more than seconds to sought thru the trading decision. Read, study, & work hard at growing your capital. Do all this while working a day job so you won't have to worry about paying the bills. because if your back is ever against the wall in your acct u can have the confidence of knowing you have a paycheck coming in until u can turn things around. Just an opinion.
"will offer you is a huge advantage when used correctly on some longer term trading styles, like arbitrage." Thats sounds all fun and good.........but as a newbie trader in a shop??? Doing arbitrage ????? C'mon. Most daytraders couldn't do more than quote the Series 7 definiton of what arb is let alone find an arb opp, execute and pull $$$ out of the trade. Daytraders as a lot are not a sophistocated bunch. For the most part purely directional with a wing and a pray. They fail to miss the point that they're for the most part orderflow. Now that most of the Bull market retail dumb money is long dried up, they are the low men on the totem pole. I am all about live and let live.....but there are smarter, less complicated ways to take advantage of market opportunity.
'Daytraders as a lot are not a sophistocated bunch." do birds fly? do fish swim? don't forget overblown egos of newbies with their 5K who think they are running the shop and without them the shop would go under.
Echotrade.... no training though... careful, you are going to need someone to help you convert what you think you know into profitable trading strategies... but,,, they don't offer that.... so, I guess they're not the ones to go to afterall
I have talked to Echotrade and I think they are a good firm, but not what I'm really looking for. I think i probably need some training, but I haven't found any firms like that around here. Thanks for the advice though.
Hey Live and let live...They are guys whom are consistently profitable traders in that realm. I'll give credit where it's due. Also, the market is always presenting opportunity on any given day to buy or sell and walk with a profit. This cannot be denied. But I find it a bit of an uneven playing field when one's orders are piped down to the post and they have ANDOVER or ASSENT flashing on them or whatever the clearing firm's name is. The specialist sees/knows this and elects to use/advantage those orders to his benefit however he sees fit. So much for not tipping one's hand HEY BUT TRADE AWAY, LOL !!!!!!!!!!!!
Clearly the prop that doesn't require a deposit is the failure waiting to happen. The idea that companies will bring in guys, give them money to trade, and train them into winners is insane! (Not to mention an insult to traders - an underestimation of the skill and years of experience required to succeed) You probably want a firm that will be around for a while, in case you are successful, so stick with a firm that requires capital deposit. If you are unwilling to come up with the 5-10k required, I would doubt your level of committment to making this work.