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Leverage

  1. I am looking for a remote prop shop that will give me 4 to 1 on my money- dont really want to be part of LLC( dont need that risk)- would like to pay .01 per share comm., trading under 50k shares a month.

    I directionally trade ETF's- I am watching futures of the underlying and for own reason dont want to trade futures- well aware of leverage w/ futures etc.

    pro's con's appreciated....

    Thanks for any info
     
  2. Since you asked by PM, I'm glad to address this post.

    A. You "must" be part of our LLC to use our capital, whether it's 4 to 1 or 100 to 1. Most of the working strategies require a $million or more anyway (pairs, M&A, market making, automation, etc.).

    B. You need a S7 to trade with most reputable broker dealers no matter what, no big deal.

    Now a comment you probably wont' like. Although I've touted ETF's for years on my radio show and in the magazine (for investors of course in lieu of mutual funds), they have never proven to be a money maker for any of our traders.

    Another point is that being a "directional player" in this game has generally meant financial suicide.

    So, for your initial plan, trading with a prop firm would likely not make any sense, since you can get 4:1 at a retail (PDT rule), I suggest you find a good cheap (free) broker like Bank of America.

    Hope this helps,

    Don

    (not being judgemental, just giving my honest opinion)
     
  3. Thanks Don- I only know how to make money directionally- I think putting up the 25 k makes sense then

    As far as the M&A pairs etc- I am not a big believer- and market making is one of the worst- a machine can do that, dont need a person, except on the opening and the margins are not like used to be I hear- one time you are on wrong side- eats months worth of profit from 'market making"
     
  4. Not trying to debate with you, but I have the records of hundreds of traders to look at every day, and I agree that it takes a combination of various styles to make mid to high six figures, but the M&A and Pairs are leading the way (opening only has and is still the top money earner).

    Anyway, let me know ahead of time for our next 50 point S&P move will you, LOL.

    Don :)
     
  5. SP doesnt have the ranges- look at Russell 2k

    Look at Apple volatility- can trade that directionally-

    ETF interest to me because of the physical and technical background trading commercially underlying commodity....


    thanks
     
  6. I have everyone in my office trading the ETF's as a pre-cursor to the futures. I think trader's would be greatly benefited by trading the ETF first, then move to the futures.
     
  7. Interesting Maverick-

    is your office a prop firm.... commoditry background ?
     
  8. Yes, prop firm. We trade everything.
     
  9. I would guess a good prop firm should trade 'everything"- keep traders on a short leash, weed out the bad ones and in the end or over time you will have a diversity and decent return on capital and commission and fee's ?

    Was Don saying that trading Pairs and M&A is statistically better than outright directional trading..... pairs and M&A is speculative, I dont see the edge...... there is no edge, the trader is the edge
     
  10. There is no such thing as better. There is only personal opinions.
     
  11. As Mav said there really is no "better" - there is only profitable and not profitable, and that always changes. The true edge changes, not only in instruments, but in the way you approach those instruments.

    I am saying that of our traders, the pairs guys are doing better than the "lone wolf" scalpers/momentum/RS/and, yes, the "directional" guys. The "contractual pairs" are literally a "lock" of profits. But, again, things change.

    There are many edges, as I said. If you have an interest, you may like to read this from a few years ago...it represents some of these changes over the years.

    www.stocktrading.com/adaptingnew.html

    And, realize that some people do well with change and some don't, it doesn't make one better or worse than the other. Some of my "older" guys will never trader pairs or use our automated programs, but will likely make money for the rest of their lives.

    All the best,

    Don
     
  12. Hi Don,

    I read that article some time ago- it is interesting.

    What I dont undestand about pairs is which one to trade and what direction- how does a pair trade differ in risk than any other- I understand one leg is short and other long- and maybe even ratio 60/40- where does speculation begin and end and where do I fing a good pair trade- never mind manage the risk- who finds the "trade" for your guys ?
     
  13. Oh no, now you've done it. You've opened up the black hole of pair trading.
    :eek: :eek: :eek:

    Lock the doors, close the windows, hide the children! Just kidding Don, The floor is yours. :)
     
  14. Maverick,


    Could you go into further detail why you start your futures traders in etfs?

    Thanks
     
  15. Mav

    do you have traders who are consistently profitable daytrading ETF"S?
     
  16. You'll get a good insight from the "master" on Wednesday. Master is Rob Friesen, not me. There are literally a couple dozens sets of criteria for all that.

    Don
     
  17. Step into my dojo, Grasshopper - LOL.


    Don
     
  18. Serious question Mav...do you think there is enough interest to do this on Wed, or should be wait a week...I'm good either way.

    (and others out there).

    Don :confused:
     
  19. Because I want traders to learn my system with as little leverage as possible. The ETF's are so small that you can trade without worrying about money. It's simply about execution. Once you are consistent with the ETF's, you can leverage up the size with the futures. And so far it's working!!!!!
     
  20. Yes, we do and I'm very proud of them. :)
     
  21. I should have started a poll when I started the thread. I asked everyone for an indication of interest.
     
  22. Looks like we're on for tomorrow, I'll call you mid day tomorrow to chat for a second.

    Don