Just graduated from college and all I want to do is trade. So I thought I would apply to some prop. firms. After a few resumes were sent I started to get responses. Now, I have never worked at one but from the conversations that I had I was not impressed. Basically, prop. firms have little to no risk (adding traders) and start making money the day you start trading especially if there is a capital contribution req. You are not "hired" but rather you are their customer or client. Yes, it is true that they would like to see you succeed but mainly because you will be trading more shares and of course the 5-10% of your profits(if you are profitable). The only advantages that I see are greater leverage and low commissions, but what about shitty workstations and bad execution. Bad execution is worse than paying more upfront on the commissions. It is important to note that I haven't spoken with all prop. firms and I don't want to generalize from my experiences but thats all I have to go on. What are you thoughts?
You need to talk with some good prop firms. There are firms that hire traders to "work" for them and they do not require that you put up any of your own money. Some even start you out on salaries plus your trading profits. They will just take some of you profits. If you go to a firm where you put up your own money they should not take any of your profit. Find a firm with good work stations and software. I am also looking right now. I have found some good firms that are willing to help you and really want you to succeed. They also have very nice offices. With most firms that do require capital you will not need the 25K minimum as required to day trade retail.
not only are you a prop firm's customer, but you are treated as an employee as regards oversight due to being licensed, and the implied ties that come with trading someone else's capital. With the right people, it can be ok. with the wrong people, it's awful. I guess the word 'people' sums it up. Find good people to work with, whether prop or retail. If you can trade retail, you are truly a customer and the service provider is truly accountable to you (good luck finding a business that actually believes that).
save your money until you have a small stake ($10k+) and then start trading emini naz-100 and S&P futures. the leverage and commissions are as good as what you will get at a prop firm. you will lose your stake, but you will learn something in the process. you dont learn much losing someone elses money (basically a number on a piece of paper), and next time you scrape together enough to trade, you might actually make it. a good trader can pull a few points (on average) out of the S&P minis every day, which is $50k per year trading two contracts (requiring $4k account + cushion). an alternative would be to trade stocks with that initial 10k in a cash account (no shorting). the lower leverage means it should take longer to burn out, and have more time to learn how things work. people here will tell you to papertrade for X months beforehand.. that is decent advice, but personally i think you learn the most from losing your own hard-earned $$$.
..."all I want to do is trade" is fairly vague. Most of us will read into that part of your statement our own goals and presume they are your goals also. That said, if all you want to do is trade then it really doesn't matter what firm you are with because you can trade with all of them. You don't even have to join a firm to trade. Most of the contributors and participants here do not trade with a firm. But they all trade. Successful traders are few and far between. Joining a prop firm in no way guarantees your success, or even suggests your success. An undergraduate degree certainly does not suggest future trading success. I am unaware of an undergraduate major in trading. Although it is a cool idea. I dare say that except for your Philosophy 101 course, there is nothing you learned in college academics that will help you trade successfully. But you have plenty of time to think about it... unless you already have a Series 7. Trading Lesson #1.....
...just read CaroKann and I agree with it entirely. However, and I don't think Caro intends to do so, do not discount the value of paper trading. Paper trading will give you the oppportunity to become comfortable with a trading method, and become confident in that method's probability to generate profits. Because when you trade live, you find out a lot about yourself. So if you have already developed confidence in the trading method, that will be one less battle you have to fight. You will have to fight the battle of executing the trades as closely to the optimal conditions of paper trading as you can. Always. When you hesitate pulling the trigger... and you will... just remember...
This is very true. You're degree is worth substantially less here, speaking relative to your other career options, and you really will have to start from zero. You'll figure things out though. Good luck.