I just counted btw the number of e-mails, you sent me exactly 27 e-mails. Do you know how many guys on ET would take the time to respond to 27 e-mails. Yeah dude, you're welcome. You can find ALL the firms on the web. They are all member clearing firms and listed on the CME's website. They can't hide if they are a member firm. There are no "secret" firms out there. And I never said you would get hired by these firms. I simply asked you to pick up the phone and call them. I told you it was going to be next to impossible. You didn't believe me. Now it seems you do but are actually attacking me for taking the time to not only respond to your e-mails but for telling you the truth. Not kosher dude, not kosher. Just saying...
Mav, I agree that you appear to have some expert knowledge of the industry but I also remember that when this first started I said.. these firms weren't hiring discretionary traders and you were saying sure they would. But if you look at the job adverts, you will see they want engineering/math types.. You said contact them. Yes, one gave me an offer I couldn't accept (not a Chicago prop) but most do what I say.. they group you into either make 1 million or don't. I guess what I'm saying is I don't believe it makes any difference at all to these firms HOW you trade unless you make 1 million dollars+. All the firms will "teach you their method" that are willing to do that.. this is my opinion.. Maybe I'm in the wrong to call you out but I think this whole focus on how one trades is silly once you understand how these firms "think". This is my 2 cents.. I also remember you've said that for a retail trader that direction was the only game in town. Now you are saying that prop firms don't trade direction.. But you've also been quoted as saying the spread edges that props trade aren't accessible to the average retail trader. Sounds like a catch 22?
There is no catch 22. I said retail was the best bet to trade directional. Of course as a retail trader you are not going to have the same edges as a prop firm. You told me you were a pure directional trader and I said your best bet would be to start a CTA or just trade your own funds in a retail account and I still believe that. There is no contradiction here.
But let's say I want to go to a prop firm.. what then? You were also quoted as saying that you didn't believe that the retail trader could get the same edge at RJO futures that these props had.. (i.e for one thing due to access to cash markets)
Lucias, look, even as a discretionary trader these firms are going to want pedigree. I'm sorry the world works that way, but it does. I'm not saying I agree with it, it's just how the game is played. Yes, these firms do hire "discretionary" traders. You seem to be grouping discretionary with direction. They are not mutually inclusive. You can be a "discretionary" spreader. So I stand by my statement that these firms will hire "discretionary" traders. But that does not mean they will hire directional traders.
That is correct. One of the big edges prop firms have is the basis trade, particularly in treasuries. To get the edge in that game you need to provide liquidity in the cash market. The basis trade essentially trades the spread between a cash debt instrument and it's corresponding future. At futures expiration, the short futures trader has to locate the cheapest to deliver cash product to deliver to the futures buyer. It's essentially a synthetic option on the basis. This is a huge trade and is done in size and still has some edge to it. You cannot do this trade in a retail account without deep pockets. There is no getting around that. On top of that, if you are not a dealer, you can't get access to the note and bond auctions to bid for the debt as well.
Thanks for that clarification. I am just trying my own money now, anyway. I think that's what most should do. I think it is less risky then joining a firm that doesn't pay a salary. You lose 5k-10k in market.. very small risk versus giving up a career for a firm that doesn't pay a salary.. may not even allow me to trade to benefit my strengths. I am also looking at the CTA route, as well. Thanks for clarification on basis trade. BTW anyone who is thinking of joining a prop firm that provides own capital (and doesnt pay asalary) first ask yourself do you have at least 1 year of savings to live on? If not then you won't be able to do it anyway.. I already had an offer but couldn't take it. I don't have 1 year of savings. I've came to a belief that its MORE risky to put on in a situation where one is cash strapped. If you can trade as long as you have some money you have a chance to make it. The worst thing is to put yourself in a situation where you are low on capital. I believe I have a high probability of success in markets provided I have some capital eventually. Best to go the sure route.. sure route is surprisingly retail. Make them beg you to work for them..consider nothing less.
Those firms are primarily equity firms true. But they are more and more getting into futures as equity trading has become a circus at times. I guess it depends on what firms you are talking about. Breakwater, Jump, and some other Chicago firms definitely are more tech-trading firms. I guess I just know a lot of pure directional traders who have been doing fine and just as well as spread guys the last few yrs. Your directional comment about just guessing is funny...probably relates to the guys at the smaller firms, and not the guys at the firms mentioned above. While a CTA is a great idea, IF you have an excellent strategy and the numbers to back it with a directional approach, there are firms out there backing these guys....you just have to do the work and find one.
Do existing CTAs hire outsiders to trade for them? Can I go to a CTA and get hired to trade direction or does every directional guy start his own CTA and do it his way?
Yes, CTA's allocate capital to outside CTA's all the time but not without a track record. You need to have your own CTA and usually a 3 year track record. I can't think of any CTA that would just hire a guy to trade for him because the CTA is tied to his name. Which means if you blow it up, your simply an AP (associated person) to the CTA. He is stuck with the track record and he CANNOT get rid of it. All CTA's must report their most recent 5 years of performance to investors. No CTA will take that risk. So what he would do it allocate capital to your existing CTA which you set up. Hope that makes sense.