Prop firms, I'm missing something..

Discussion in 'Professional Trading' started by Renegen, Jan 17, 2007.

  1. So I was seriously thinking of joining a prop firm such as Swift Trade upon graduation in 2 years or even this summer(mostly because I'm undercapitalized) but the more I think of it the more I think I'm going to waste my money there.

    I want eventually to trade for a living, of course I'm also trying to get an actual day job, but the final goal is to trade. Spending 6 months at Swift Trade for example is not a stupid error is it? I'm telling myself. I've heard some good and bad things about prop firms; what appeals to me the most is the supposed faster learning curve and the margins they give you.

    I should have about $5000 saved up to join them this summer or in 2 years. I'd be spending all my savings with them and once my $5000 run out I'd be kicked. Will spending all my savings on a prop firm be a good investment? They don't offer training, only really care about commissions and if you ever think of leaving the firm you have to pay back all losses. Their business model is almost "Have anyone and everyone give us $5000 and then we kick them out."

    Can I keep my money while also getting better at trading? Say by reading some more, studying the markets, papertrading and making a few trades? Or is a prop firm and some of the unique benefits they offer really worth it? Is there even a hope I become profitable in 4-6 months with them?
  2. doli


    What you learn at a prop firm may be capital intensive.

    If you're still in school, why not open a retail acct., study the markets, and get rich slowly?
  3. Pathus


    Why don't you get a job in institutional sales and trading? That is where the money is at.
  4. 4-6 months I think is very unrealistic, I would say at very minimum 6-8 months but most likely at least 1 full year to find consistency, and thats if you are good. Its a tough biz and it really depends on your desire and persistence.

  5. If they aren't offering any training and you don't have much experience at all, then you should plan to lose that 5000$. You would probably be better off opening a retail account. Trade a demo account for 3 months til you have an idea, and then trade the real account. May learn a little slower than jumping right in, but you should save yourself some money.

    Don't get me wrong. Three months may not be enough time, and even if it is, you will still lose money. Hopefully, not all the time though
  6. Look for a few prop firms that offer draw and do not require a capital contribution in NY.