Don, Currently what is your min deposit and the leverage available intraday? Are most of your traders automating their strategies? I'm currently coding up some strategies in Tradestation and wonder how difficult it would be to automate a system if I became a trader with Bright. Thanks.
Hey Donny boy. Looks like you are getting your sea legs back eh? I knew you would get back into the swing of things here. It's like riding a bike, you never forget. You know it's funny, I was actually going to start a prop firm 101 thread over the weekend as I saw so many threads being started asking the same things over and over again. The prop business is very big and diverse and I think traders need to understand where their place is in this business. Everyone wants to marry the supermodel, but most of us won't. We get what we get. And that is the same with trading. Everyone on here thinks their special in some way, they can read charts, they are passionate, hungry, etc. The truth is almost everyone in this business is, so that really does not separate the wheat from the chaff so to speak. This business is about as competitive as professional sports and I don't think most guys on here realize that. For the record Don, there are more then a "few" firms that pay salaries. Chicago is still mostly a "true prop" firm town. Although technically it's a draw, not a salary so you have to pay the draw back from your future profits plus very steep desk fees. So they pay these kids 40k to 55k a year in draws, with desk fees of 2500 to 5k a month and they get a split from 20% up to maybe 60%. But here's the thing, for every guy these firms hire, they toss 100 resumes into the trash. It's that competitive. A lot of guys think...oh yeah, I'll just go work at one of those places. That's not how it works. You are going to be one of 400 guys getting looked at and maybe they choose 2. They prefer guys that excelled in both academics from a top school and someone who played sports at a competitive level. I would venture a guess that 98% of the guys on ET would not qualify. So where do the rest go? They to places like Bright Trading, Echo, VTrader, etc. It's not sexy, but it's a start. Yeah you are going to have to bust your ass and take some risk. Put up your own money and probably have to teach yourself, but that is life. No one here is entitled to work for Transmarket Group or Gelber or Breakwater or Chopper. The fact of the matter is, Bright serves a niche in the business. My firm serves a niche. Echo serves a niche. All the independent shops that are still around are around because they found their place in the prop world where they can survive. And to add on to what you were saying Don about the profit splits and risking capital, most firms now they offer splits defer compensation to some degree meaning you actually DO risk your own capital, just not on the first day. But I've got news for all the guys that think you can just walk into these places and lose "their" money. These firms have absolutely no patience for under performers. You are going to be sitting around jocks who are going to eat your lunch. If you can't hit par, you'll be gone in months if not weeks. There is a lot of pressure. Like the old saying goes, be careful what you wish for, you might just get it.
Enough said. I wouldn't trade a system that doesn't take into account the changes in volatility over time.
Again, Mav...you're right on with your notes, in much more detail than I went into, about how the "true prop" systems work. No free lunch, that's for sure. BTW, I have asked a couple of potential traders to contact you in the last couple of weeks... I probably should have asked you first... I hope that's ok? All the best, Don
Our traders generally put up about $20K, and we have a lot of guys with partial or full automation. Tradestation coding would have to be changed of course to write to the GS API. Don
Good comments Don and Mav! I'll also add that the "true" (if you want to call them that) prop shops have a chain that's anchored to the floor, with a leg iron attached. Why? So you don't move. lol I wouldn't want to be an employee, nor working in that kind of environment. I've been an employee many times in the past, and will never go back to that. Last, glad to see you're feeling better Don!
FYI I think there's a way to use tradelink to interface tradestation w/ REDI (and a host of other platforms): http://code.google.com/p/tradelink/wiki/TLTradeStation
what is the success rate of traders who put 20K. With today's economy there isn't a lot people that have 20K cash to put in casino skimming operation. I understand your firm uses goldman sachs as clearing firm isn't it. I wouldnt' be surprise if goldman sachs own prop trading desk uses HFT machines for daytrading and is fully automated for daytrading. why don't you lower the entrance fee to $3000 to participate in the casino. Isn't ironic, you firm is based in Las Vegas...