Scalping, prop trading, commissions

Discussion in 'Prop Firms' started by illiquid, May 21, 2002.

  1. I went to hitman's diary site, one of the best I've read in a long while. I am not very familiar with the realm of prop trading, and many of my curiosities were answered reading this site.

    My question is: is this a reasonable picture of what a successful prop trader is? I mean the trading for .50 (or less) targets based on tape reading, grinding it out each day, paying 50%+ of gross in commissions? Don't get me wrong, I'm not knocking anything that generates a nice bottom line (to each his own), but I always had the perception that off-the-floor scalping was mostly just a broker-take-all game, and the very few who were successful at it end up, like hitman, graduating to management and recruiting other traders to eventually securing a percentage of their commissions. Would a consistent and successful scalper at one of these firms be able to, say, land a job as a trader at a respectable hedge fund? Or is the game of "profitable commissions generation" completely separate from the institutional/hedge fund world?

    Put another way, would a swing trader who used a mix of technicals and fundamentals, and who, god forbid, tried to minimize transactions -- would this trader be welcome at a prop house at all, even if he was extremely profitable? A position trader who plays for %gains instead of quarters/half-dollars -- is it worth it for him to look for capital to trade with at a Worldco or Bright?

  2. Just to clarify, I mean the institutional/hedge fund on the buy side, not that other "profitable commissions generator". :)
  3. If you are "extremely profitable," I'm sure you would be welcome, if for nothing more than a selling point to get new traders.

    I don't know your trading style, but if you want to hold positions overnight, you are going to have to make arrangements to shelter the firm from the added risk. If you are making these larger gains by trading intraday, then good for you. You will be welcome any place where you would want to be trading.