Starting out in Prop Trading

Discussion in 'Professional Trading' started by BoSoxFan, Oct 5, 2008.

  1. BoSoxFan


    Hi guys... I'm from boston and am new to the Prop Trading world. Since i was laid off from Bear Stearns(Where i attained my Series 7) in 2006 I guess you could say i've "bounced" around trying to find my niche.

    I'm very unhappy with my job. All i truly enjoy doing is learning the markets & trading. So through my "search" i came across the world of Prop Trading--needless i love the concept but am a novice as to how it all "works".

    So to make it short..can anyone steer me in my right direction, i.e. who are credible prop firms and who to stay away from? Any thoughts on Bright Trading? I've read their site and seem legit.

    I've contacted a Prop firm (Hold Brothers) but they dont have a location in boston. I'd prefer to sit next to someone, pick their brain and then go do my thing.

    Any recommendations/suggestions would great be appreciated.

    Thanks everyone!!
  2. Question: how old are you and where do you 'stand" financially (ie dependents, how long will savings last?)
  3. BoSoxFan


    I'm 31. I have 2 children (9&6) that both live with me full time.

    Savings-wise i have about $5k. I know it's a huge risk but the way i see it, i'd rather try it now and if i fail i can always get up and try again. If i try this when im 40 i might not be as easy.

    In my heart of hearts i love the capital markets and everything that comes with it. I just want to do what i love--it's not a job to me, it's a hobby and i just want to get better at it.
  4. Sorry to say this...

    You will generally need to deposit 5k min to start. In your case that is your savings, which means you need an immediate income. That is about as guaranteed of a failure as it gets.

    Even if you got with a no-deposit firm like hold or swift that 5k would still be gone in a month or 2 and then you still need an income. That just isn't long enough to learn.

    I don't really have any good suggestions aside from get another income going and work on trading part time.
  5. BoSoxFan


    I'll just have to save up for a few months...but that still won't stop me.
  6. pkang


    It's a tough world the first few years because the learning curve in prop trading is extremely high. With that said your bankroll of 5k doesn't really cut it. At most prop firms you'll need at least 5k down along with extra money to pay for your living expenses until you become profitable. Compounded by the fact that you have 2 mouths to feed you may feel the need to push your trading more aggressively when not warranted. I would suggest finding a job that gives you the flexability to trade on the side. Also, I recommend not treating your potential trading career as a hobby or you'll end up in the 95%.
  7. BoSoxFan


    Wrong choice of words...what i meant to say is that it is work..but it's something that I enjoy, like watching football, so i doesn't feel like work.

    But I appreciate everyones responses and feedback.
  8. When I started working for my prop firm of the past, my manager was really honest with me. He said that basically they were in the business of taking advantage of young kids with no money to trade who had potential to make a lot of money. I liked him; he was a good guy....

    It's pretty true though. Prop firms are a good way to get your feet wet and learn. The firm needs to make their money on the deal too though, and they're gonna take it out of your trades.

    I say go for it. Find somebody you can work with and learn. Just make sure you know the real deal about the firm you choose contractually, and if it allows you to make any money after paying their fees, commission, and % cut. Make sure you know if they're gonna hold back payment of your profits, and if so, how long.

    Also, on the chance that you start making big bucks and want to quit to do it on your own, see if they're gonna sue you... or how long they're gonna expect that you stay out of the markets before returning....

    Best of luck to ya.
  9. Start small trade the euro/japanese markets. After that you can go at it if you are making money. Until then trade part time.
  10. It appears there is always a lot of hate towards prop firms. I guess too many bad apples out there?? :confused:
    #10     Oct 6, 2008