They are successful because they market their product well with promises of wealth and turning them into successful traders. Ask for audited returns of the success of their recruits. They won't give them to you. Ask them for specific details ahead of time of how much of "your money" you can lose once you start trading. How much BP do you get? What size position can you take? What are the trading costs? When you start asking the questions above you will be surprised with the few specific answers you will get. You will get vague answers and promises.
Someone I know well recently got a offer from 2 of those firms as a discretionary trader, doesn't run an automated strategy. He got his foot in the door with his track record but the interview process still took a few months. There are firms still around that will pay a salary and a % for discretionary traders but not easy to get into unless you have records, money talks.
I've read this entire thread but still didn't see anyone answer the NFL question without cheating. I don't even know how many players are on a team but my guess would be 15,000 with a 30%-50% confidence interval. I probably should have failed econometerics so I forget what a confidence interval is. I was turned off of stats when on the 1st day of our 2nd level stats course the teacher said everything we have learned or will learn is pretty much bullshit. If you even got to a 3rd interview with Jane street you must be doing something right.
I agree that books can be excellent; However, there are inherent differences between visual representations and reading in books. There are other things that factor in as well. Self-education is a great approach but it doesn't work for everyone. Most traders that begin would last longer if they had more direction and enforced risk-management rules. From my experience, that's what turns a down day into a bad day and a bad day into a terrible day. For years I totally advised against it but the options these days are limited and money is too. I've seen so many people lose thousands upon thousands for the simplest mistakes that I honestly believe some training programs out there are well-developed and if you take the material seriously, a n00b or someone who who has problems with emotions effecting their trading can take advantage of the resources available. As a rule of thumb, "the best firm" is highly subjective and there should be consideration made for all of the above, including the self-education approach. A good training program with experienced traders can really limit losses. Just the way they can sell videos to thousands of people, prop firms can churn traders deposits at the same rate. It all comes down to the individual and what fits their needs.
Evo, the difference is, when I started, all those "simple" things were taught to me by my mentor, not a training program. And I never paid up front for that, I paid through higher commissions. The training was one on one. Not from a book, or skype or some webcast. Hell my mentor and I use to trade stocks together tick for tick. I think the mass market approach simply lacks the quality needed to get over the hump. I mean, geez, even with the one on one hand holding training we had, we STILL had a 90% failure rate. I can't imagine teaching someone remotely through a webcast or video. I just don't see how this current model is sustainable. Just my opinion.
Wrong! No prop firm can churn an account. Churning is: the practice of executing trades for an investment account by a salesman or broker in order to generate commission from the account. No prop firm (at least legit ones) execute trades on your behalf. The trader has to push the buttons. The trader is in total control of their trades. If they want to trade once per day, how is that churning? If they want to trade 100 times a day, how is that churning? Who are you to decide how many times a trader should trade. Yes, the BD makes money off of commissions. Is there anything wrong with that? Is E-Trade churning someones account that trades 3 times a day in a self directed account? Yes, it all comes down to what fits the traders needs. And if a trader needs to pay someone to hold their hand to watch an online video instead reading the same material in a book then that person shouldn't pursue a career in trading.
Mav, It is sustainable because these guys are really good salesman and there is a sucker born every minute. They prey on people by promising them that they will make so much money as traders. I went through a sales meeting at OTA and it was unbelievable high pressure sales tactics. Meanwhile, I saw the guy who pitched me a couple of months later at a bar and he was no longer employed there. He confessed that once they sign you up their only goal was to keep selling you more classes. It had nothing to do with making me a successful trader. Just sell me more classes. As a matter of fact, they wanted you to fail as a new trader after taking the first class. That way they can convince you that you need the next one! It's all sales. Again, ask for audited performance results from their past students. They won't give you any. Ask for any proof that they can teach you anything that will make you a successful trader. Ask for names and numbers of 10 past students that are successful traders that you can contact.
The funny thing is that these "education" firms try to vilify prop firms by saying that they don't have the traders best interest in mind because they just care about making commissions of the traders. However, the "education" firms take your money to watch their videos and then charge you a HIGHER commissions than the prop firms! Ask them ahead of time exactly what your costs will be to trade and how much money you can lose. Usually you pay them $3,000 and then they let you lose $1,000 at a VERY high clearing rate and then cut you off and ask you to take the next class (more money!!!)!