I'm about to start working with a prop firm offering no salary. they also require me to invest 5k. 1) what amount of money can i expect to make within the next 6months- 1year? How much money do you guys make? 2)Do i need to invest more money to be able to make a living of stock trading?If yes, how much? thx
What kind of % payout are you gonna get? How are losses split? What are the charges per trade or per share?
$5K is really a low amount...but, it all depends on what you're planning on doing? Our Opening Only strategy that many of our new traders do has a very high win/loss ratio, and most make a little money with that from the get-go (then they keep trading and tend to give some back until they develop their intraday trading plan, determine which 2 or 3 stocks to trade, etc.). This strategy takes a $million or more of opening only orders, however. Learn to trade the MOC imbalances on a daily basis. Don't dive into the "stock of the day" based on some "gawdawful" factor like most up, most down, or some silliness. Be careful of news stocks. I tell my people to not plan on making money for 6months or so. If you're even in 6 months, then you have a good chance of doing well. FWIW, Don
About 90% chance you will either lose all your cap or some of it. About 5% you will breakeven, and 5% chance you will be up 10k or less. I have been in prop trading world over 8 years now, these numbers may seem scary but they are true. After 1 year, if you are in the 10% mentioned above, you then have a very good chance of making solid money as a trader. DO NOT try and make money, try to not lose it, or lose as little as you can while you learn. Make sure you have enough saved up to support yourself for at least 1 full year.
how much you are going to make really depends on how you approach the whole trading thing, how you manage your risk, and your trading style. Trading is hard work and it should be approached as such. this is an interesting article on how much you should expect to make from trading
or maybe trading is very easy and you can spend less than 15 minutes per day after you discover an edge that works... maybe those that think its hard have destroyed their brains using drugs like cocaine, and no longer have the ability to process information beyond 3 dimensions.
Key word is "AFTER" you discover your edge. But getting to that point is the real work. I dont know why you skipped the entire process leading up to that point, unless you know someone who told you from the getgo exactly what to do. Most people arent that lucky and have to learn on their own.
Thank you guys for your replies. I got my first interview with the prop firm yesterday. The boss of the firm told me that I had to place 5K minimum to start off. The firm will add 45K on top of my 5k (so 50k working capital in total). My cost is 1cent/share + regulatory fees I keep 98% of the profits. Is that a fair deal?
For a beginner, I'd say the leverage is fine, as I am sure they will bump you up as you progress. Honestly, 1 penny a share is high but 98% payout is fair. If I were you, I'd try and negotiate like half a penny per share and offer them like 80% payout (instead of 98%). Believe me, your payout % does not matter right now, cause its highly probable that you wont make anything for 6 months to a year. Once you get profitable (a couple months of consistent profits) then immediatly renegotiate for a better payout. Right now, your job is to learn and, psychologically, you rate will matter to you so the lower the better. Payout though, not important right now. In the beginning, the prop firm has all the leverage over you but once you can make it on your own, then you have all the power. But work on finding consistency first, thats the most important thing.