I have been trading for a little over a year and have just started to become profitable. What most people don't know is that on a per share basis most good day traders only make a little over a penny a share gross. So if a good trader does 1,000,000 shares gross they make $15,000 Well as a fairly new profitable trader I made .011 / share doing about 900,000 shares gross .011 profit - .001 SEC & other bullshit fees - .0015 ecn fees ________ .0085 / share then i have to pay my damn broker .0045 / share. ** They are taking over 50% and what value do they provide...NONE! - no training - standard shitty prop support - any regular minimum wage person could give prop support and i know their costs around around .0005. This is simple not fair So now out of the .011 / share I am average all I get is .004. I do 900,000 shares, so I get $3600 - 300 for software and data = $3300. Shit, only $3,300. I barely have enough to pay rent, eat, and take out my overweight girlfriend. I am profitable but I am going to have to give this up soon. Becoming profitable is hard enough, but even getting ahead is probably just as hard Now if I could just eliminate the broker I might actually survive. And as my account gets bigger I can do more shares and increase profits, but at this margin. It is just so hard to get ahead.
You sort of have to pay your dues in the business. As you have more experience you can get a better rate. They've gotten me for hundreds of thousands. The ECN costs don't count, since if you add liquidity you can make money from them. I make something like $4k/month in ECN credits. Try one of the .0002/75-80% firms out there. You trade at cost, and only give up 1/4th your profit. You trade 1 million shares, gross 10k, pay $1500 in ecn fees per your style, $500 in SEC and data fees, then of that $8k you keep $6k. Beats the hell out of keeping $3k.
Also, you may want to find a non-overweight girlfriend. Or, if you want to keep 100%, you should absolutely by no means pay over .003, really, .0025ish. Get either 100%+.0025 or 75% + .0002 Depending on your ratio, do the math. For me, in the biggest whackiest moving of markets in 2008 I was averaging around .0055/share... nowadays I'm around .001, but I may still keep a higher % of gross.
I was wondering how i would go about finding a job at a prop trading firm. Any help would be appreciated.
Sounds like a call to start your own prop firm! Put together a business plan keyed off of charging the rates you think traders should pay, get some startup capital together from investors, and go into business. You will have no problem getting top tier traders when you offer the same level of service as the competition, but at half the cost.
LOL. Yeah, I would love to him put together a business plan that charges what he thinks is a "fair rate". Office Costs- rent, network lines, news feeds, salaries for techs/back office, office equipment (computers/chairs/monitors/servers/etc), T1's or T3's and backup lines, clearing, trading software fee, etc, etc. All that and volume is contracting every month. Good luck staying in business for more than a week.
Have you tried adding a zero to all your orders? 30 grand a month is pretty sweet in most people's books
Orange: See if your strategies are workable with futures contracts. Considering the leverage, the transaction costs could be much lower, in my experience. GL!