looking for less "risky" firm

Discussion in 'Prop Firms' started by TsTrades, Sep 16, 2009.

  1. TsTrades


    Hi. First time poster here -- it seems like this might be a good place to come for this type advice, so I thought I'd give it a shot. To make a long story short, I've been trading on my own for a while, want to "take it to the next level" and join a prop firm, and have recently begun doing some research on them. Here's my question for all of you.

    I knew coming into this that these are completely non-salaried positions (if you even call them "positions"), but I've been a bit caught off guard, I guess, as to how much it essentially costs to work for these firms -- not just the capital contribution, but in many cases training as well. And that's in addition to the ongoing fees such as software fees. Basically, can any of you recommend what you consider to be the least risky firm to join to get started as a prop trader? By "least risky," a lot of that does mean the least expensive, but not all. That is, Firm A could charge $5000 for training/capital contribution but let you keep trading if you don't show a profit after a set amount of time, but Firm B could charge $3000 for that combination but then let you go if you don't show a profit after a set amount of time. If that's the case, I think you can make a case for Firm A being the less risky option, even though the initial cost was greater. But certainly, cost is a factor for me as well (not just contribution and training, but software fees as well). I know there is no perfect answer -- low-cost/free and I can keep trading forever. I'm just looking for the least of all the evils, I guess you could say. Thank you.

    PS. By the way, the payout rate is actually a secondary factor for me. I figure that if I can't afford to get in the door, or to get properly trained, then how much of the profits I keep is a moot point anyway! If payout rates actually become a factor for me, it means that I'm trading profitably, which is really my goal anyway.
  2. A couple of months back, and over the years, many discussions about trading for a living, various routes, etc. I decided to write another article (short) trying to outline where we're at right now.

    From the current (October) edition of Stocks and Commodities magazine:

    Starting To Trade For A Living
    by Don Bright

    Ever thought of trading for a living and didn’t know where to start?

    I receive dozens of phone calls and hundreds of emails each month from those who think they want to get involved in trading for a living. So much of our industry is simply misunderstood that I thought it was time for an analysis, hoping to help those in their quest. .... .... ...

    Complete article: http://www.traders.com/Documentation/FEEDbk_docs/2009/10/close.html

  3. That was a very nice article don
    Thank you
  4. 1) NEVER pay for "training". That's a total scam. If it was that easy to "train" someone to trade, everyone would do it.

    2) NEVER join a sub LLC. Your money gets pooled with a bunch of other mooks who could blow out the entire office. Make sure your money is with a major firm that's been around for a number of years (Assent, Bright, Echo, Hold, etc.)

    3) NEVER join a firm that makes you trade "their" way. It's your livelihood, you should be able to trade whatever you want.

    4) Get a good commission rate, but don't base your decision solely on "rock bottom" rates. Platform stability during volume surges will make/save you an absolute fortune.

    Good luck.
  5. Some firms have real low commission rates, but you only get 80% - 90% of the profits...
  6. ScottSam


    The vision of this really varies depending on trading style and background.

    Try telling every anybody at Swift, Title, etc that you "only" get 80%-90%.
  7. timcar


    Great article about the different types of trading places.

    The one type all traders should be carefully of is "Retail type trading groups". These type's are the one where there are a small group of traders and are looking for other traders to join their small trading group but usually the last traders to join are charged a high commission rate and get a low level of leveraged.

    At least the "True prop” trading firms and Zero capital–required firms does not cost the unknowing trader a lot of his own money.

    The "Professional trading firms" while expensive to join required the trader to obtain a license and provide some assurance.
  8. Is it better to be in a retail firm or trade prop wth all the leverage?