Hi, I've been trading for myself for 5 years, and I'm thinking about joining up with a prop firm. In those 5 years I've made just over $500,000 total (before taxes). I struggled early on, but gradually improved and in the past year I made $190,000. I am very consistent now and I'd like to scale up my operation and possibly join a prop firm. There's one I've been talking to (I won't say which one in case they're reading this) which is offering a 40% payout but no capital contribution (no base salary, but I'm confident enough in my edge). They also have a better fee structure than what I currently have. My trading costs would be cut in half with them. I am based in Milwaukee, Wisconsin but they are in a much higher cost of living area (at least 2x higher) and they won't let me trade remote. However, the no capital contribution required is appealing to me, and I think I'd be able to scale to the max immediately with their capital. I am worried about working in an environment with other traders though. Maybe they'd steal my ideas and destroy my edge? I'm so used to trading by myself. This prop firm preaches about their "open environment" too but I think it could be just more potential for traders to try to steal edges away from each other. I mostly scalp stocks, but I still think I can scale it up to a point where even getting 40% payout it could be at least twice to three times as much as what I make now. And even if there's some desk/data fees, I think the no capital at risk is a huge plus. But my main concerns are relocating (I like it here in Wisconsin) and being surrounded by others who might eat away at my edge if they see what I'm doing. Is it worth the move and the experience?
I would not join the prop firm, but we do not know which prop firm you are talking about, the size of the allocation you will get, and where that can lead.
They're in New York. Traders get $10-$20 million in buying power (compared to my $800k in buying power I'm working with currently). I can do a lot more with that kind of buying power, but they weren't clear on the max daily loss limit. They said they just increase it as you get more established and they get more comfortable with how you trade. They said it's normal for some of their bigger traders to go through 6 figure drawdowns. This just what they told me, maybe they're exaggerating or maybe it's for real.
I don't have any experience with prop firms but on the math of it... In order for you to make $190K next year, you'd have to make ~$500K in profit next year and that's to stay where you are financially. Can you scale this to 2 million/year in the next few months? I doubt it. If you can scale it, then you can do it without a prop firm. There does not seem to be any benefit to you to join someone else's operation.
"I like it here in Wisconsin" I'm not sure you are thinking clearly right now... Just kidding! Good luck.
%% You may want to look into Bright Trading; they may require you to share the details of what you do, is a question.They also have a poker, musical questions,........ which most likley dont count much LOL
They're not going to give you anything but the best viewpoint from the outside so I would assume that worst case is they'll try and steal your edge and kick you out while hamstringing you.
Already looked into them. They payout is higher but I really don't want to make any capital contribution.
Yeah, it's possible. That's why I'm on the fence about this. I already visited them and the office is nice and they're great people, but who knows how it all goes down during trading hours. Their platform and technology is way better for sure (and you can backtest pretty much whatever you want & they have nice execution tools you can use to get way better fills), but I did notice that you can pull up a menu and see what everyone else in the room is trading too and where their entries and exits are. Is this normal? It kind of weirded me out. I've always been very protective of how I trade. I guess I could copy other good traders too though with that thing? But they were emphasizing the group mentality and teamwork and potential to learn new strategies etc. It's true they have really good systems to possibly figure out more trading ideas, but I already know how hard it is just to find one edge and get good at trading it.