What is with the misinformation folks... There are a handful of firms that offer 65%-75% payout and charge 0.20 per 1000 (or .02 per 100) and you can trade whatever the heck you want, as long as you don't blow your deposit.
There is no misunderstanding NYC212 was either shooting from the hip or is clueless as to the prop world. "Fractal" these are not prop firms in the classic sense of the word eg Goldman, Morgan etc.. These firms make money from training, trades and profits you make. When you get hired at other prop firms e.g. Goldman, Morgan you get a salary, are extensively trained free and never pay a penny to trade. I'd say you are another wannabe like NYC212 shooting from the hip or just clueless.
Look moron, I'm fully aware of what a prop firm is, what it charges, and how it makes its money, because before I moved to my own account I traded at one for 4 years and reconciled our group's records with the firm's accountant. Clearly you didn't read my first post in this thread. I'm suddenly wondering what your issue is.
I just wanted to write a little blurb here about Prop Trading/ Intraday Trading Firms and how to select one that is both good for you short and long term. Some background on myself is that I've been trading about 15 years now, 10 in equities and 5 in fixed income/credit default swaps and debt. I currently have no allegiance to any firm and trade only for myself with my own money. So I have absolutely no dog in this fight and I'm not looking to promote any firm. That being said, the following are issues that should tell you that you've joined the wrong outfit. 1) If you put up your own money YOU should be the one to have final say over your daily risk limit and YOU should be allowed to withdraw your money, as I do, at any given time you feel the need to. Putting down money, whether it be for a teaching fee or a risk deposit is the same thing. YOU ARE FUNDING YOUR OWN TRADING NO MATTER WHAT WAY IT IS SOLD TO YOU BY A MANAGER OR RECRUITER. And when trading your OWN money, you should always have the freedom to do what you please with it or you basically just handed away your 5k or 10k deposit. 2) The owners or managers should give you their input on where they think you risk, share size and bp are set but it should ultimately be your final say unless you run out of money or are dangerously close to doing so. I get PM's from way too many traders that are getting choked to death by very stringent risk limits and share limits. Most of the traders that PM me seem like they are trading a demo account if they make one or two bad trades early on. 3) This is possibly the most important..... The two biggest questions you need to ask yourself------ Are the guys teaching me traders and if so are they successful at it? This question isn't whether they have money, It's whether they still make it trading. Any trader will tell you that the way the market moves has vastly changed in the last year or so. Former tape readers are losing money, former big time exchange traders are retiring b/c order flow has left the brokers, etc. It is emphatic that the people teaching you can show you that on profitable days they are making atleast 5-10k consistently. Any owner of a firm or teacher that can't show you that amount of money on a winning day is making money from training fees and commissions NOT FROM THEIR OWN TRADING. And if they can't make a living for themselves then how are they going to teach you. DO ANY TRADERS THAT ARE WORKING THERE WHO HAVE TAKEN THE TRAINING PROGRAM MAKE ATLEAST 10K A MONTH AFTER A YEAR OR TWO TRADING...... If the answer to this question is no then you better get packing. If there aren't groups of traders that fit this criteria and everyone there is trading for pocket change, then something is very wrong. There should be atleast a few relatively new traders that are taking home a respectable living after the first year. Next question is Are you progressing at all? Can you trade stocks that are volatile? IF THERE'S ONLY A LIST OF STOCKS YOU'RE ALLOWED TO TRADE THEN THAT IS VERY COUNTERPRODUCTIVE. I've got alot of complaints about this question as well. If you are not allowed to trade stocks that are volatile or in the news then you are trading with out an edge. Yes for the first few weeks you should just get comfortable and familiarize yourself with the market but after that YOU ARE DOING YOURSELF A SERIOUS DIS-SERVICE BY TRADING ARBITRARY STOCKS. For ex-ample, if you haven't been trading AIG, AMZN, POT, FAS, BASICALLY THE TECHS, BIOS AND AGS FOR THE LAST WEEK then you are not giving yourself the opportunity to suceed. People who don't know what they're talking about will say that you can't learn by trading those stocks and I will contradict that completely and say that is the only way to learn. I hear from guys that trade random dead stocks that don't move all day instead of the market catalysts.... That's a great strategy if you don't like money. The only way to learn how to trade active stocks is by actually trading them. By not trading active stocks, in the news or at major chart levels, you are completely taking away any advantage you have as a trader. At this point you might as well go bang your head against the wall.... Atleast you don't have to pay any one comissions to do it. This was just a raw and brief response to alot of questions in the form of one answer. If anyone has any specific questions then feel free to ask. Good Luck in the Markets.
One last thing..... The only reason that firms use Training Fees instead of risk deposits is to avoid trouble with the SEC b/c they are running a group of unlicensed traders in a fashion which is frowned on. Chances are that if this firm is using a training fee to accept money then they are not a licensed broker/dealer. That means that the SEC says they can't accept the money of unlicensed trader who want leverage greater than 4 to 1, they can't make ANY MONEY OFF OF YOUR TICKETS or COMMISSIONS. So using a training fee is a way of getting around taking a risk deposit. While I completely disagree with these rules they still are the rules.
Thank you for taking the time to write this up, very interesting. I am currently looking at 3 different groups, Cy Group, JC Trading and Bright Trading. Would you have any feedback on these groups? I am currently trading using TOS and while successful the 8.00 per trade fee limits me from scaling into and out of postions like I would like. Cy Group seems like they may be overly controling while JC trading will not give you your 5,000.00 back for one full year. Thanks in advance. Joe
Thank you for taking the time to write this up, very interesting. I am currently looking at 3 different groups, Cy Group, JC Trading and Bright Trading. Would you have any feedback on these groups? I am currently trading using TOS and while successful the 8.00 per trade fee limits me from scaling into and out of postions like I would like. Cy Group seems like they may be overly controling while JC trading will not give you your 5,000.00 back for one full year. Thanks in advance. Joe
No matter where you decide to go NEVER give anyone your money without them agreeing that when you leave you, no matter how long you're there for, you take home all money owed to you depending on the split and 100% of whatever is left of your deposit immediately. There is no valid reason for these firms to hold on to your money. Most of them aren't legally allowed to take your deposit in the first place. I've heard of all of these groups..... bright requires a 25k deposit, in which case you're better off just funding your own account with 4 to 1 leverage to avoid blowing thru more money than you can afford and to get the best rates possible. The other two are smaller shops. If you are going to be putting up money I would say that you must make sure that you're doing so with a registered B/D. If not your money is not insured. Being that these places are all over the country I'm guessing that you're trying to trade remotely. I would highly recommend that you find a shop in your area to trade thru.... I always like to be able to put a face a name especially when they have my money. Also, it's very calming to be able to go in and talk to someone face to face if there are any problems or if you just want to physically pick up a check and see their operation.
I disagree with those who say its waste of money. It depends where in your trading education you are, they ( all props who offer training) teach basic strategies, risk management and show you how successful traders within the company do it. Its important to remember, we more or less all use the same strategies and the difference is in the process not in some magical way of trading and for your hard earned money that's what you get i.e. osmosis. This is not classroom education and you will not be getting undivided attention or get every question you ever had answered.