Prop firm issues/concerns (personal)

Discussion in 'Prop Firms' started by codetroll, May 7, 2009.

  1. I’ve considered prop. trading for a while now, but have yet to do it...the reason(s) why are some of my personal concerns.

    If I’m wrong, please let me know or correct me. The only firm I feel that addresses these problems/concerns, that I personally don’t have the money to join just yet, seems to be Bright’s Trading.

    Fist, I find that a lot of firms are focused on volume (shares traded). My personal style doesn’t necessarily mean that I would meet all the “benchmarks” for shares traded monthly, it might it might not. I tend to hold longer and not trade every 5 minutes. I feel that the prop. firm would force me to take bad trades in order to meet their share quotas.

    Secondly, a lot of firms don’t like their traders to hold positions overnight. While this is understandable and I even agree to some extent, this too sometimes does not (especially as of late), fit into my current strategy. With this being said, I feel that many firms out there have a trading system they want you to learn and use, but more importantly not to deviate from it.

    I don’t have a problem with the leverage scenario 40:1 overnight or even 20:1 overnight is good enough for me personally. But I’ve been told that firms such as Hold Brothers really look down upon it and even try to persuade you from doing that. While other ways of trading may fit the individual better (emotionally/phsycologically/profitability wise, etc), the fact that some firms don’t allow you to trade your own style disturbs me somewhat.

    Those seem to be my biggest concerns that have held me back from going prop. The lack of developing/utilizing one’s own system and the fact that some firms (perhaps many) force their traders to get in when they really should just wait things out (technical people call this waiting time, confirmation).

    I was looking into Echo or Hold, but I feel that some of my concerns come into play with these firms. Let me know if I’m wrong….or should I just remain retail and just save money/trade/invest and build up a larger account?


  2. riddler


    most firms will not let you hold overnight. I don't blame them. its just not a smart business decision to do so.the firm could literally be wiped out overnight.
  3. We don't permit overnights.

    But we have no share quotas or imposed trading guidelines whatsoever.
  4. Hey there, I am fairly new to this game but have done about four months of research on over 50 trading firms. Seems to me that the firms which are focused on intraday trading and short term trading have styles and methods of trading that are only applicable to the near and now. Holding positions over night creates risk which is not addressed with their trading model, hence they dont encourage it. The premarket news can run a stock 10-12 percent in either direction or more before the normal market even opens. At this point the short term strategy the day before is obsolete. Plus mentally finishing your day is a good thing, allows you to start fresh tommorrow.

    So staying retail allows you to use medium to longterm trading strategies such as following institutional order flow for 10 days or so etc. So I would say if your looking for longer term trading then maybe you should look to trade for a firm such as a hedge fund or mutual fund or another firm whos trading model is diversified.

    And hey if your making money now on your own, why get more people involved! Hope that helps!