My Experience at a Prop Firm

Discussion in 'Prop Firms' started by pineman, May 10, 2007.

  1. You the man Mav ! :)
    #11     May 10, 2007
  2. I still can't believe they didn't buy you lunch!!!!! :eek: :eek: :eek:

    #12     May 10, 2007
  3. Midas


    Sounds like sour grapes.

    By the way you have a better chance making it daytrading then land and keep a mid six or7 figure trading job at a large investment bank or hedge fund..............

    This business is RUTHLESS whether you trade retail from a home office, levered up at a prop. firm, in an office full of 25 year old know it alls in flip flops, in the open outcry pits, at a hedge fund, investment bank................... The industry is littered with sob stories, broken dreams, bitter pills, and pissed off spouses, and sour grapes.

    The only reason for failure is ones own inability to succeed nothing else. The bottom line at the end of the day is your financial bottom line; your success is in your own hands, with a thin margin for error and no room for excuses.
    #13     May 10, 2007
  4. Ok I gotta step in here because this is a not a fair view.

    The truth is that at prop firms like the one described you do get reprimanded for not following the preached style, which is usually a churn & burn style meant to generate commissions. You do get told to trade more even if it does not make sense for your own profitability. You get discouraged from learning beyond and above the preached strategy, and yelled at when you lose some money trying something new & experimenting.
    Realistically, as a new & learning trader you will go through trial and error if you try smth new. That means gross losses.
    I spent a whole month in gross red trying smth new (which was essentially tape-reading). I was doing little volume and I knew the group heads were not happy. But I was in an another zone where I think they were scared to really approach me. Plus, they made a lot on me prior when I was hopefully trading heavy with an outdated scalping strategy.

    Looking back, it's obvious why such negative feelings and blame exists from failed traders. There is truth to them. I made it out, only because I said "fuck it" but there was one guy who I felt was actually a good trader in the making and he ended up quitting. We all knew that the real reason was not the small bump he ran into but the group heads and the actions through which the general reputation behind stock "prop" firms exists.

    I'm not defending the OP, but there is truth to some of what he says. Really, any prop firm teaching scalping for the last 2 years is nothing more than a chop shop. I look back to when I started and I can only wonder just how much money I could have made in 2003 if I was being taught tape reading, sectors, mean reversion, charts, etc. instead of being preached scalping Open Book & bullets. That was an especially great year for tapereading.
    #14     May 10, 2007
  5. You know what, if you are serious about running a "prop" group, you need to have a sense of comradery. You also know that your new (and sometimes old) guys are always going up against emotional demons and fighting through failure. Cheering them up, whether it is through drinks at Bryant Park or a lunchtime pizza goes a long way. One group I was with, one of the few good ones, would do a Christmas party.

    During my phase of getting over the hurdle, I was so f**king broke, the compliance guy suspected I was starving. I was, but really I was often too depressed to eat. Another guy was living in a homeless shelter. The group heads weren't blind to this, but they never took a real step to help us out. Even when my account went positive and I asked for 1k so that I can actually go out (I had +2k), the pr*ck said I had to have at least $5k before I got even a dollar.
    That's why they got zero loyalty when things turned and they had to leave the firm. Noone went with them.

    Even for the failures, as you know most will fail. There is a good way to treat them and a bad way. At any quality group, losing traders leave on good terms with a logical & clear mindset. At the bad "chop shops" they go on tilt, blow out, leave with sour grapes and make sure to spread bad about the firm.

    I've been at both types, I've seen & experienced most of it. I have seen traders fail & dig their own graves. And they were upset & frustrated but when they were leaving or being fired, they could not blame the group leader or even say bad about him. Little things like respect, morale, comradery and even "free lunch" make a difference.
    #15     May 10, 2007
  6. tradethetrade

    tradethetrade Vendor

    If you want to build a constructive thread and help people who are actually going through the exact same process you went through, why don't you tell us why you think you failed. You took responsibility for your failure so tell us why/what you did wrong so others can comment and decide for themselves.

    What you are telling us in this thread is nothing new. Most of us including myself went to work for a prop knowing all this. I am fortunate to go to a prop with excellent work ethic and training but from what I read, it is unclear whether bad practices caused you to fail.

    How long did you work at the prop firm? What was your fee structure? What bad habits did you develop? Did you know your odds before you went in?
    #16     May 10, 2007
  7. Maverick74


    I agree and disagree with what you said here. I think it goes without saying that no one wants to work at a chop shop where the firm treats the traders like shit and forces traders to trade a certain way and I certainly have never heard of an actual group leader telling a trader to trade more. I'm not saying it's never happened, but I think a lot of that is prop firm folklore.

    But let me jump in here with this cottling that you seem to support. I think most people on here know that I use to work at the grandaddy of all prop firms, Worldco. And Worldco was run by the great Walter Scott Bruan. I say great, because his reputation preceded him. Worldco took the tough love approach to trading and I have to say that I think it's the best approach.

    The fact of the matter is, most people do not belong in this business. But they try it anyway because they are either so freaking greedy that they think they are going to make millions or they are so freaking lazy and love the idea of skipping work, leaving when they want and making their own hours.

    The bottom line is, holding their hand and telling them what a great guy they are and buying them pizza and telling them everything will be OK is bullshit. Trading should be like the military. You should get the shit kicked out of you. At Worldco I moved to NY with no money and I was living in a shithole in Brooklyn. I went to Walter one day ready to get down on my knees and beg him for some money. He looked at me and laughed. Dead serious. Here is what he said to me:

    "I want you to be the first guy in tomorrow morning. Be the first guy to turn on the lights. And don't leave till everyone else has already left at night. Turn off the lights. Work harder then you ever worked in your life. Use that hunger to work for you. Just push yourself. Don't be afraid to fail."

    Well, I did just that. I didn't get a single dollar out of Walter. I was the first guy in, last guy out and I busted my ass. I eventually joined a group, busted my ass some more, and eventually turned things around. At the time I hated Walter with a passion and Worldco. How could they treat me like that right? Well, I thought, f*ck them. I'll out hustle everyone there and I did. Through sheer hard work and determination I became the most profitable trader in our 40 man group.

    You can't treat traders like children. The job is already like a fraternity or childcare facility, depending how you look at it. You need to treat these people like adults. And accept the fact that you are not suppose to succeed!!!. I would always cringe when I heard a group leader saying nice things to a newbie trader and taking him out for drinks. Why? Because that newbie was not going to make it and the group leader was lying to him so he would not quit. He bought him drinks, took him out to dinner, cottled him, the guy hung around and never made a dime. He never had that hunger in him. I have a lot more respect for a group leader that just tells these guys the truth. This is not summer camp. They are not your "friends". You are there to make a living! And yes, it's a very tough job. The only way to succeed is toughen yourself up.
    #17     May 10, 2007
  8. the only thing I would expect from a prop shop (deposit required type) is good rates, leverage, good platform, 100% profits, ability to withdrawal all my equity at any time or a reasonable time, and let me trade my own style intraday wether its 100 shares or a million. The rest is up to me.
    #18     May 10, 2007
  9. My prop experience sucks as well. There was little-to-no training, the software platform was disabled to perform sim trading (I discovered that later), and when I began live trading, I was told the platform did not support stop orders of any kind. We had to "cover" each other to go to the was pathetic. The trading room was great and there were 40 workstations, each with dual monitors...however, there were only 4 or 5 of us doing the trading. I keep wondering: "where's the rest of the gang ?".
    Long story short: got out of that deal after a 6 week battle to get a check cut to refund my deposit.
    Found another prop firm in NYC, and before making a committment, I went to visit in person. Everything was great ! Platform, fees, environment, management, etc.
    Then I received the paperwork in the mail: the deal had been changed....drastically. Now there was a platform fee, and the commission rate had doubled from what I was told in-person.

    BOTTOMLINE: expect nothing but sleaze at the lower end of the prop market. The cost of that leverage they provide is ENORMOUS. Best to seek-out a rich Uncle or some other "angel".
    #19     May 10, 2007
  10. The problem is that most of the prop firms out there do treat their traders like sh*t. And I know that Worldco was doing a lot of this toward its ending days. Plopping down new guys in front of a 14 inch monitor, a sh*tty computer, an absurd NX system, and worthless tech support, then saying "good luck" is very chop shop. It's just not serious. So how can you expect the guy to take it serious.
    It's far from professional, it's a churn & burn operation. You can't expect the group leader to treat his traders like adults when he is not an adult himself.

    Yet the fact is that prop firms need to keep on hiring them since it's a game of numbers. And you do not know who has it and who does not for at least 6 months. So your job is to make sure you can properly support all of them to nurture the true talent. Instead of just treating them all like worthless crap, since most are never going to be traders. That's like going into every sale pitch as if you already failed, since you know for a fact most will never buy something.

    I don't agree with your take on how Walter "motivated" you. Honestly, the guy is a scumbag and a degenerate cokehead who piggybacked on his family's wealth. What the f**k does he know about hunger? I bet he gave that line to multiple people.
    What if you were borderline starving and were about to get evicted? What if you were approaching him as simply one person to another, just asking for some help? Meanwhile this guy is making money on you with rip-off commissions while you're practically homeless? That's bullsh*t. And whether it worked or not is not the concern, as I was in a very similiar situation, except that I never asked for handouts but was actually begging one of the heads to hook me up with a side job through one of his "connections". He ended up lying to me & f**king me over. That only motivates me to f**k him over.

    It's not about supporting newbies with handouts, and I agree with your example as to why that's not the way to go about it. It's just about respect and an understanding of how tough the business is and how important morale is. As if it has not been beat to death, it's very psychological. It's just common sense to try to keep the spirits high.
    Any proper group leader knows the phases, as he has been through them. His job is to properly monitor his traders under. If it's obvious that one of the guys is f**king starving, you need to talk with him and see what you can do. Guide him to accept that maybe he is not meant for the business and make suggestions on how one can go look for a different career, even help him.
    Not make jokes about it. Or offer them some work cleaning your apartment. Or tell him "Let the hunger lead you into profitability". Or telling them fairy tales of how the market will pick up while you're charging them rip-off commissions and refuse to provide proper IT & trading support.
    People think I'm exaggerating, but there are worse stories. The shady chop shop reputation is well deserved, unfortunately. And it even affects the good groups, because people just do not trust the business and new guys get planted bad images in their heads from those already burned.
    #20     May 10, 2007