Hi everyone. I started this topic to learn more about prop trading firms, and specifically, Echo Trade. Just to give a little background on myself. I graduated from college a few months ago, but have been unable to find a job. I wanted to go into financial services (preference of equity research, but I really didn't care much with regards to specific finance fields, just wanted a decent job and experience), but was unable to find something. It's been several months, and I still have not been able to find anything. I began to look into trading careers, and after "applying" to a few places, I got a response from Echo about a "equity trader" position. I do follow the markets, and I did used to trade stocks in my personal account, but nothing notable in terms of profit/loss as I was just a teenager when I was more active. So, I just wanted to get more information about a trading career at a firm like this. They say they do not pay a salary, and I wasn't sure if this was the norm for prop firms or not. The posting also mentioned there would be a mentorship program, and I would need to get the Series 7 license. Would this be an ok career move right now just to get experience (I really do enjoy trading stocks, just am not sure if I see that as a long-term career)? How favorable (or not) is trading at a prop firm for the resume (function of p/l?) How are trading losses handled at these firms, specifically Echo? I know there is a min. capital deposit (I believe 5000), but just curious what the max losses and such would be. Any and all information providing info wrt to equity trading at a prop firm, info about Echo, specific advice if this is a good move for a year or so until I can find a better (salaried) job, etc. would be greatly appreciated! I did a search and saw many threads on Echo, but it seems like many of the responses were from more experienced traders, not a newbie like myself, so just hoping you guys can help me out! TIA!
What you are referring to is not a job, not even remotely close. They aren't offering you a 'position', they are inviting you to open an account. That would be your own account, with your own money on the line, taking all the risk yourself, making your own decisions and responsible for all your losses. It's trading, plain and simple and is has absolutely nothing to do with the world of finance. It'd be like opening an account at Ameritrade and trying to make money, only you'd probably get better commission rates and better software. Don't be fooled and know what you are in for. Btw, I trade at Echo and it's a good firm, but it sounds like you are looking for something completely different.
You really need to search through the prop firm threads to learn more. This is all discussed ad nauseum. There are true prop firms and there are arcade shops. The true prop firms offering paid positions are few and are going to be extremely hard to get into especially right now. You have basically no track record and there are a ton of experienced people looking for work. Unless you're extremely talented in quantitative and statistical math you won't have a shot a real trading job. All of the other firms requiring you to pay to trade are simply offering you leverage, that's pretty much it. You get no pay and you will likely have to split profits. If you look around enough you may find one with lower than retail commissions but that would likely increase your split owed to the firm. Once you lose a certain percentage of your deposit, you're either cut or asked to deposit more money and be assured they will be watching you. Lescor is right though, it has nothing to do with a finance career. It's trading, period. Most of the arcade shops will charge you thousands for the 'mentorship training' and the quality of training varies widely from one shop to another. The only thing this would give you is time in the seat and some experience but unless you have a fair amount of money to keep afloat for awhile the percentages are against you in an arcade shop.
IMO, if you are just starting out trading and have limited resources, best to go with with one of the "props" that have a vested interest in your success, i.e. the ones where you are trading with their money (perhaps w/ your small deposit). if you have an extra $25k laying around, then one of the "arcade" props like Echo, Bright, JC may be a better move. i don't think the mentorship programs at these 100% payout firms like Echo would be that expensive and i have heard something like a fee added to your commissions, like .001 per share or $200 on 200k shares per month. the primary benefit of these is that they probably have some top notch traders to serve as their mentors. if you don't have a lot of cash to burn whilst learning, i think you will most likely have a better growing experience, regarding both knowledge and coin, at one of the split payout places. here is a list of some props, you have to sift through them yourself as many are similar to Echo... http://www.tradersnarrative.com/list-of-proprietary-trading-firms-735.html after you have a system down, a sizeable account and are consistently profitable, then it may be best to make the move to one of the so called "arcades" like Echo, JC, Bright, etc. where you get 100% payout, the leverage, etc. good luck
Dont bother with bucketshops. All you need is money and just open up an account with one of the regular places such as etrade etc.. and use the pro version of the software. If commissions is an issue it means you are doing it wrong. If a 10 dollar commission makes the difference between profit or loss then you are not ready. When you start making 2-3K profits, 20 bucks for the round trip trade is a drop in the bucket.
In my opinion do the opposite of everything in this post. Find the lowest fees possible or you won't survive the learning curve. $10 rt's is WAY more than you should be paying. Echotrade is a good firm, they shouldn't be thought of as a bucket shop (and no, I don't currently trade there).
I would have joined a prop firm like Echo long time ago, if not for the exam required by SEC crooks. A better rate, higher leverage, direct access to market, who would reject those advantages? I was with Scottrade for the first few years, not knowing that they routed my orders to their market makers and made money on me besides commission. Now I've just known that the exchanges like Nazdaq also routed orders to a few selected big banks seconds before making them public, allowing big banks to make money on common traders. crooks everywhere, finance world, ha, call it crooks' world.
It's not a hard exam. Just read the material, take the practice tests until you consistently score in the low 80's and you will pass. I don't understand why everyone thinks a S7 is such a big deal.
Thanks for the encouragement. I have a personal reason for not joining a prop firm now: I am still fighting the demon. Once I get over it, I will join a prop firm and get the leverage. Stay open, Echo and other firms, I will call you sooner or later.
fighting the demon? wtf? I have no idea what this means. Having said that, try to leave the drama out of trading.