The passion and commitment you make to trading has nothing to do with your capital. 4 years ago, 25K was the norm for a new trader. That 5K is cheap and will give you a sample of the task at hand. Not too many businesses can be started on 5K.
What if you join up and as an example loose 3k. Then you decide that you want to become a public school teacher or a mail man. If you leave do you get your equity? Do you own the equity in your account or do they do once you join the firm?
The capital in most firms belongs to you. If you lose 3K, you can walk out at anytime with your other 2K, as long as you not under contract. If you're under contract, the firm may hold onto your capital until the contract runs out, or a certain period of time as stipulated in the contract.
I would SERIOUSLY look at your training the firm is providing if you even lose $1500 and question everything being taught if you are in this situation. That's a pretty serious drawdown for being trained. Is that the norm for the rest of the new guys you are being trained around. Or are you doing something completely not in sync with the rest of the firm? The equity is always yours, some firms will have a year holding period but about 90% now don't Robert
Losing money is part of the learning curve. I don't know any complete newbies who were profitable right out of the starting gate. If they were, then they were not really trading much and thus not maximizing their learning experience. The old trading adage rings true: You have to lose money to learn how to make money. Newbies should expect to lose their $5K and consider it tuition. Whether or not the prop firm allows the newbie to continue trading the firm's money is contingent on the following: 1. Is the trader displaying diligence in his market preparations and is he applying what he was taught? 2. Is the trader disciplined and does he follow instructions? 3. Does the trader exhibit an aptitude for trading and a passion for it? If the answer is yes, then many prop firms will let you trade firm capital without requiring additional funds. Each case is different and is based on the evaluation of the head trader.
Each case is different I agree. I work on a different model for training traders. Protecting capital is key, getting consistent is 2nd and than after consistent winners is time to start to step up the size. I don't agree with large drawdowns. Again best advice I know is <b> Talk with the traders in the office </b> to find out how they feel about situation. Robert
Rtharp and goldenarm are both right on the money. Even though the training should minimize the amount of capital you will lose, every person learns on a different curve, and you should be prepared to potentially take a big draw down. I've seen both situations with my trainees.