Dont worry ... Now that you've learned what part of the "game" is in this industry you can bypass all the clowns and salespeople - well they are usually one in the same - and get on with making money.
hey don, thanks for the cogent response. for your model, it makes sense. however, i am aware of several prop firms ( and i am sure there are many more ) that actually have the software and systems in place that allow them to split profits with their carefully selected traders and request zero money up front. they do quite well, by the way, due to superior software / systems. in addition, banks, trading firms, hedge funds etc have never required capital from their traders--yet they seem to be doing well. i can clearly see the advantage to the firm to require capital contribution, but fail to see the advantage or reason from the trader side of things. see you in NYC ! surfer
Usually I have found that the best firms are not necessarily those with the lowest fees, but those who offer the best support at fair and competivie pricing. By that I mean, fair commissions, adequate training when necessary or appropriate and execution systems that are up to date with up to date facilities. The key to finding a great firm is Balance..everything working well together.
I personally think that the best solution (for an equities trader) is to go remote with a prop firm. You get the leverage, you get the good rates, and you keep your freedom and don't have them pressuring you. Win-win situation. I agree that if you want to trade equities and not futures, you'll have trouble with buying power unless you go prop. So remote looks like an excellent solution.
I would love to trade futures vs. equities, but all my capital (6 figure range) is tied up in IRAs and 401k's. I would hate to take the hit by taking it out prematurely. Heck, at my tax rate + a 10% stinger that is not a hit, that is bitc** whipped. Right now I am doing well trading my IRA, but obviously I have a lot of limitations and have to be creative to take advantage of down moves in the market since I cannot short or buy options. So I am probably looking at an equities prop firm that I can get into for 20k max (10k is more realistic). How much capital does one need to realisticly trade futures? I am probably looking at equity futures, precious and industrial metals as they are the areas that I know relatively the most about.
couldn't you take a 60 day loan out of your IRA and replace it with no penalty. Add that to that 20K and you meet the requirements for minimum equity. Hopefully you will add to that amount in 60 days and you can replace the loan. Just a thought.
Yes, I have considered a 60 day rollover. In fact that is probably the way I will try to go. Right now I am trying to build up my IRA so I wont feel bad if I cannot get it back in 60 days.
Gotta disagree 50. For the most part you are right, but if you don't generate massive volume, than the firm will find another way to make ya pay. i.e.........higher commish......desk fee......lower payout to name a few
Casey I don't understand how you can say you shouldn't be trading prop if you only trade 10k a day. first and foremost I agree with the other posts about looking out for #1 and trade your way and your style! The hell with what other people want, unless your with a firm that wants you to trade a certain way, than maybe you shouldn't be with that firm. But you mean to tell me that if(and the key word is if) you clipped 20cents on 5000s lot, 10k round trip, you wouldn't be happy with $1000 day? Thats 20k a month. My point is that volume should have nothing to do with it as long a your green in the end. Again unless your at a firm that demands or expects heavy volume
the risk quotient for this plan goes off the top end of the chart... the downside is you pay a 10% penalty on the withdrawal...only your losses of the principal are compounded by the 10% penalty and any other taxes that are due. with agressive tax policies being implemented by cash strapped municipalities (see article in WSJ 2/16/4 - 2/18/4) it is most likely your 10% penalty will be required on the quarterly tax payment date, and if paid by next year's April 15th date, will be with acrued penalties this all adds up to double risk.... sometimes these simple solutions to find money, really need to be thought through on a spreadsheet and not on a whimsheet ------- --------- reason and substance over emotion!