Looking for a prop firm with...

Don Bright · Oct 13, 2006

Quote from newbie2006:

Very interesting conversation going on here

I agree with Mav and Don that if a trader who just started out is left alone to trade his $5k account then I would assure you that he will blow it out in less than 2 weeks.

But if someone is disciplined enough (at the end of the bell curve as Mav pointed out) or if he has a good Mentor who really in keen to make him succeed then I would say that $5k is enough to know if this new guy will make it or not.

Here is the plan for a day trader who wants to scalp (can be tweaked to fit any other strategy):

Phase 1) 2 weeks of theoretical background, this is where he will learn what is it all about, what are ECNs ? what is Ask, Bid, blah blah blah, all the basic theoretical information that he will need

Phase 2) 2 weeks of simulated monkey trading, this is where he will be taught how to use the software to watch the quotes, place orders and tracks his positions, in this period he will learn to use the keys and do most of the order entry mistakes, get real familiar with the software and feel ok with placing orders

Phase 3) 2 weeks of simulated disciplined trading, in this phase the trader will learn to stick to a plan, what is this plan ? very simple, the trader will trade only one stock something like "VLO", give him a time sheet with something like: 9:50 Long, 10:30 Short, 11:10 Short and so on, so at each time he will enter a trade in the direction that you randomly predetermined for him, stop loss @ $0.05 and take profits @ $0.1

Phase 4) 2 weeks same like phase 3 but on live account, with only 20 predefined trades, this phase will really teach him to cut his losses short and not to fear losses, with this random entry he will not lose much every day, I would say maximum $100 including all commissions and fees

Phase 5) 2 months of live rationale trading, in this phase he will learn some real techniques that makes the odd better than random, maximum number of daily orders 10, at this stage with only 10 trades and supposedly good discipline (learned from the previous phases), he would lose maximum $50

Phase 6) Either quit or live on

so here are the expenses:

Phase 1) zero
Phase 2) zero
Phase 3) zero
Phase 4) 10 days x $100 = $1k
Phase 5) 40 days x $50 = $2k

Total expenses = $3k

ok, is this a bullet proof plan, definitely not, but believe me when I tell you that if you first teach your traders to cut the losses short and not to fear them you would be doing them a big favor.

If a trader is patient enough to do the above full time working not less than 10 hours each day (6.5 trading, 1.5 reading books or other resources, 1.5 reviewing every tick of his traded stock during the day, 0.5 sitting down with his mentor to get some real hard spanking if he break any of the rules) , if he is patient and disciplined to do so for 4 months as stated above then I assure you he will make it IF HE WOULD EVER MAKE IT , if not then better for him to save his time and money and go search for another business.

Now the above plan is veryyyyy hard to be followed by someone who is trading remotely, this is the guy who will definitely need more than $10k to make it.

just my 2 cents
More...

www.stocktrading.com/TradingPlan2005.htm

(I can share last year's basic sample trading plan)...

And, I noticed that you didn't detail any strategies...pairs, opening only, Mergers, market making...etc? "Buy and hope" is not a strategy, LOL. And, BTW, all the books in the world won't be of much help (to be frightfully honest)....even after live training in a successful group it takes a while to achieve a "comfort level" to trade without supervision (there are obviously exceptions, of course).

FWIW, "simulated" trading is usually a waste of time since you don't affect the market with your trades, and you haven't shown that you can "pull the trigger" at the proper time.
All the best,

Don

newbie2006 · Oct 13, 2006

Don,
My goal was not to detail a specific strategy.

"Buy and hope" what is that ? where did I mention it ?

And regarding reading books, where did I say that only reading books will make you successful ?

what about reading my post again

Don Bright · Oct 13, 2006

Quote from newbie2006:

Don,
My goal was not to detail a specific strategy.

"Buy and hope" what is that ? where did I mention it ?

And regarding reading books, where did I say that only reading books will make you successful ?

what about reading my post again
More...

Don't get me wrong, I'm not being critical. You did say (6.5 trading, 1.5 reading books or other resources, not "only" but no big deal.

I didn't mean to infer that you were "buying and hoping" - my reference was just general in nature (heck, "sell and hope" is my preference most of the time, LOL).

One of the "trading firms" example of teaching traders is something like this: First week try to make $100 gross, Second week try to make $100 net, etc. etc. without giving any strategies or techniques...not much help...that's the only point I was making.

Developing a plan is essential, and I applaud you for starting that way, I'm just trying to offer some help.

All the best,

Don

newbie2006 · Oct 13, 2006

Don,
I am sure we are on the same page here but I want to point out that my post is not a trading plan, its a training plan. Huge difference here.

It doesn't detail what is the trading strategy to be taught, it just outlines how a trader should be taught how to trade, so it can be used with any day trading strategy.

Waterwolf · Oct 15, 2006

Please private message me with response.

I am looking for a firm in Chicago where I can:

1. Work out of the office and remotely. No or low desk fee.
2. Trade equities, options too if allowable.
3. Cap. deposit around 10K.
4. Commissions .05 share or <.
5. Bi monthly withdrawals.
6. Buying power of at least 30x or more. 2x or more overnight.
7. Decent reliable software.
8. Payout 95% +.
9. Decent coffee.

Will trade +25K shares daily.
I've been a broker for several years and am licensed with the 7. I've traded prop before and have my own strategies.

Am I asking too much?

Rergards,
Steve

supersizeit · Oct 28, 2006

Quote from Maverick74:

Don, your traders are all over the map. And it has nothing to do with your so-called training. The very best of the best require a level of focus and discipline that most people quite frankly don't have.
More...

I can understand Don's point of view about the training to a certain extent and it especially makes sense from his side of the business. Spoke with Don today when I inquired about his firm and he seemed like a nice guy even he though he brow beat me a little about the importance of the Las Vegas training; Im of the opinion that some basic training for complete newbies is an absolute must and will in all likely-hood increase trader longevity for most newbies (if not all)

This longevity will in turn increase the the number of trades i.e. commissions for the prop firm before the deposit either runs out or the trader is off and running, in the black and never turning back....which would of course be the best case scenario for the prop firm.

However, I think a trader who clearly states that hes comfortable with his own strategy and techniques and is willing to risk his own capital to continue using them should be allowed to go forgo any training unless the agenda of the firm is to train the trader for a percentage of profits based on their techniques in addition to commissions but that does not seem to be the agenda at Bright since they pay out 100%.

Don Bright · Oct 28, 2006

We have never stopped anyone from executing a strategy (a legal strategy), but we do our best to protect our traders from themselves at times. Training is not at all mandatory, but hightly recommended...why not see how the top traders are making money? What could it hurt? Add more $$ to your profits hopefully.

Don