Should I join this prop firm or keep trading for myself?

Discussion in 'Prop Firms' started by Ajm1734, Feb 20, 2019.

  1. Ajm1734

    Ajm1734

    30 and single. I think NYC would be more fun, but yes rent will be a lot higher. I pay $1400/month for a 1 bedroom here and it's nice but I actually don't need much right now and I don't make the full use of it. In NYC the same type of place will likely be 2.5-3X the cost. But I can go for a place that's lower quality than my current place but $2.5-3k a month in Manhattan. Or maybe try some other borough if it's decent. I would not be making a commitment to NY long term initially and I really don't want too nice of a place starting out there if I move.
     
    #41     Feb 21, 2019
  2. Have you looked at the prop firms in Chicago?
     
    #42     Feb 21, 2019
  3. Ajm1734

    Ajm1734

    I have but as far as I know they are mainly derivatives market makers. Very different than what I do. Also, I'm not a STEM person or an Ivy league grad so I don't think they'd be interested. If there are equity prop shops in Chicago still around (I heard Tower Hill is closed?) with no capital contribution required, I would like to know though.
     
    #43     Feb 21, 2019
  4. qlai

    qlai

    I can't believe that in this day and age there are firms that will not take on profitable trader remotely. Is that by itself not a red flag (together with their "open" environment)?
     
    #44     Feb 21, 2019
    tommcginnis likes this.
  5. wrbtrader

    wrbtrader

    I hope you understand that the "cost of living" is not just rent/mortgage. You know exactly how much your montly expenses are in Milwaukee and its not $1400 per month via only using your rent.

    As for your edge, you then know what type of market conditions it performs well and what type of market condition it has poor performance. For example, if your performance slows in the summer months...the summer may not be the best time to relocate to NYC unless you plan to downgrade your trading in the summer so that you can "adapt" to living in NYC.

    For example, when I relocated from one country to another country...I used stats of my trading to tell me when would be the best time to do such. I did it during the months when I tend to perform poorly in comparison to other months. Therefore, when I relocated...I didn't trade for 3 months because it was during a time period I tend to not do well. Instead, I used those 3 months to adapt to my new surroundings and just enjoy life.

    Overall the cost of living was cheaper but my mortgage was 2x higher.

    wrbtrader
     
    #45     Feb 21, 2019
    S-Trader and tommcginnis like this.
  6. wrbtrader

    wrbtrader

    Depends on the definition of "profitable" and capital and what such is to the firm.

    wrbtrader
     
    #46     Feb 21, 2019
  7. if you can deduce other people's trade secret from their trades, how can james simons keep his method secret so long since at least some people in the clearing house or brokerage firm have access to medallion's trades.
     
    #47     Feb 21, 2019
  8. This is a red flag for me. My experience relates to prop futures, but I suspect equities would be similar. Your contract should specify the max daily loss limit, so you know if it is even worth considering.

    As a new trader walking in the door, you are starting out with a sub account of $0. Most firms won't let you swing big size off the bat in case you go negative and then walk. They will want you to start small and build up a buffer in the account. Your daily loss limit will relate to how much is in your sub account, and therefore how much the firm is risking (ideally zero for them).

    When you think about it, you are still trading 'your' money, as your percentage dollars of the sub account is being risked.

    They may start you with a daily loss limit much less than you are trading with now. It could then take much longer to size up to a point where you are even matching your current income. That is why I would want this in the contract.

    Also, having your trade history visible to the team sounds like a bad idea. There is no upside in it for you. People might work out what you are doing and reduce your edge, and there is also the psychological impact knowing that every trade you make is being scrutinized. This might mess with your head if you are used to trading lone wolf style.

    Prop trading can be great with the right arrangement, but my recommendation is to be very careful who you do business with it.
     
    #48     Feb 21, 2019
    S-Trader, Ajm1734 and tommcginnis like this.
  9. Ajm1734

    Ajm1734

    Very good points. You highlighted my main concerns here.
     
    #49     Feb 21, 2019
  10. tonyf

    tonyf

    Just borrow as cheaply as you can. Your IRR can support a healthy line of credit.
     
    #50     Feb 23, 2019