Simple advice for those starting prop

Discussion in 'Professional Trading' started by Dogballoon, Apr 13, 2006.

  1. Saw this comment by SDLT13 in a great thread started by limitdown. Just wanted to draw attention to it and throw it out there, as it's good, consolidated advice. Carry on with the afternoon doldrums :)


    I have been a prop trader since 99. I ran a group of 25 traders a year into the business. We were big swingers and most of the guys made a killing. Here are some of the most important things I learned about this business.

    Some people are doomed to failure because of their attitude.
    Some people will fail because of their expecations. Others will fail because of their work ethic. And still others will fail for the usual reasons, discipline, money managment, etc.. If your serious about being a trader here is what I suggest:

    First, start with a reputable firm where you dont have to worry about any capital investment you put in. Second, work for a group that has succsesful traders. I mean guys that are making atleast 2K a day on 100K tickets, a 2-4 cent average is a good trader on that volume. The most important thing to be succsefull is to have a good mentor, someone that will work hands on with you. This person will have a stake in you and you will probably not have a great deal. But that doesnt matter at first, the main thing is to learn to be profitable. Any good trader who can make those numbers will have a good enough system for you to learn.

    Allow yourself atleast 6-9 months of learning and not making any money. You are launching a business it takes time to get it off the ground. If you have pressures to make money to pay expenses, you will put too much pressure on yourself and increase the chance of failure.

    Stay away from negative people, negative perspectives. I read so much of it on this site. LEARN from your mistakes. Memorize every day in the market. If you trade XYZ, watch every trade go off, watch every level 2 movement. At the end of the day go over the charts, go over what happened and what could have tipped you off so you can look for it next time. STOP being pessimistic and starting working your ass off. ASK QUESTIONS. Figure out why something happened. I have learned so many patterns that institutions display when buying or selling, that over time I saw them get smarter and trade better for more liquidity.

    Don't trade for pennies, trade for momentum, trade for the dollar. Trade stocks that move. Start with 100 shares, take your licks, and learn how to punch back. The best type of trading for me is when I know I am right or wrong right away. That is trading at the moment of truth. When you learn to be right, you will learn to punish them. When your wrong get out. Take losses, its part of the business. Dont be emotional, trade like your a computer. I hear all these guys talk about all the programs in the market. The programs have brought trading back for the real traders. The programs provide alot of liquidity and volatility in todays markets. I love them. They are so predictable.

    Just some thoughts...
  2. CONR


    Good, positive, advise for a change!
  3. I second that, a really well thought out post.
  4. I tried to be objective, fair, honest and most importantly expose the fraudulent conduct by so many, as well as expose real truth vs. hype.

    thanks for the acknowledgement....

    PM me.
  5. Right on. It's just good to see informative dialogue here every now and again. Makes it worth flipping over while I'm waiting for my stocks to stop grinding. :D

    PMs away
  6. Casey30


    If only many of the wanna be traders who entered the field saw and followed such advice...I have worked with so many that give it a month or two then quit...get rich quickers...not really possible in the financial hard, study, learn, give it time and you will make money...give it more time and you will make alot of money.
  7. duard


    Trading is a business. A business that is scalable. Scalability is important. Why? Because too many careers are subject to arbitrary limits on the amount you can take home. Failure is great it teaches you more than your successes. Besides in a zero sum game the money has to come from somewhere.

  8. Do you mean I can't be a self-made successful trader?

    I'm a beginner at prop and I do wish that I could have someone to learn from. Right now, I'm struggling to learn to trade on my own. I'm affraid that I have the wrong idea on what to look at. My main focus is on the ecn activity, and from time to time, I will look at the 1-min chart and the s&p future. For the moment, I'm about breakeven in my trades.
  9. As a beginner I wouldn't focus on ecn activity. Will confuse and frustrate you. I wouldn't even focus on the montage.
    Get off the 1-min time frame to much noise. Maybe use it to drill down for exit once your in a position and looking to lock a gain.

    Heres a good thread.

    Try not to get caught up in the blinking lights of the casino, good luck.