I am changing careers and exploring day/swing trading as a full-time business. I have some capital with which I plan to trade. I've also been reading up on TA, direct-access, etc, but I have not tried any kind of trading yet. The way I understand it, I have 2 options on how to start: A. Set up a trading desk at home, open an account at a DA broker, get whatever remote training on their software is available, start trading remotely. B. Find a firm with on-site trading in my area (NY), open an account with them, get trained on their software on-site, trade there (pay them for it) for awhile, then maybe go route A above. Questions: 1. Are there any other options? 2. Which option would be better? 3. If I go with option A, which DA firms should I consider? What should I be aware of? 4. If I go with option B and later switch to remote access, will I either be stuck using the software of the on-site firm remotely or have to get re-trained on another system? Which firms should I consider for option B? How much will I be paying them for trading on-site? What should I be aware of? 5. Is there a danger depositing the capital under either scenario with the firms? Is there deposit insurance? Any help would be welcome, since I'm totally new at this.
- Any help would be welcome, since I'm totally new at this. - if you lose 50 % to 100 % of your capital will you be able to get by ? good luck ... its a trading jungle out there if you are not that old ... you might want to try to get a trading job with a firm using their money instead and a % of profits good luck
1. Are there any other options? 2. Which option would be better? 3. If I go with option A, which DA firms should I consider? What should I be aware of? 4. If I go with option B and later switch to remote access, will I either be stuck using the software of the on-site firm remotely or have to get re-trained on another system? Which firms should I consider for option B? How much will I be paying them for trading on-site? What should I be aware of? 5. Is there a danger depositing the capital under either scenario with the firms? Is there deposit insurance? Any help would be welcome, since I'm totally new at this. 1. I think either is probably the best two choices you have, PROP with captial contribution or Solo with ur capital. 2. I started as a rookie in a Prop enviorment.....i was very very lucky to have been Mentored by successful traders and in a Firm that gave 100% of the capital.........BUT FOR YOU....Prop is a tricky business now. THEY ARE THE HOUSE...so make sure, if you chose this route, you get everything in writing or in contract form......make sure you cover A -Z in your questions....and make sure they answer you so as you are 100% clear on how they operate. Its like any nogetation.....get the facts, get them straight, compaire with other Prop shops and SLEEP ON IT BEFORE YOU DECIDE WHICH ONE. 3.I lost touch with the PROP world a while ago, so im not up on the current Prop shops. 4. I would imagine the rates you pay are between you and the Remote broker. I mean you may be able to negotate once again. Softwear, im sure varies between venders, and to tell you the truth and this is from experience, learning diffrent platforms is the lest of ur worries......the are all basically design the same, some or more user friendly than others....but its really not hard to learn more than one, as you switch vendors and progress to a new platform. 5. depends on how the PROP house is set up, LLC, S CORP, etc. This you will have to research on ur own...and do research on POOLED MONEY and what that means, and how it is handeld by each Prop house.....DONT BE AFRAID TO ASK THEM QUESTIONS. Good luck
Thanks for the advice. Do you have an opinion as to whether I am likely to get good training/education, if I go with a prop firm and my own capital? Unless the answer is yes, I don't see any advantage of doing it rather than going solo... Also, how do the prop firms charge (by trade, by share, fixed monthly fees, % of profits, etc)? Do they expect certain time commitment? If I do go solo, which direct-access broker(s) should I be using? Do I need to worry about depositing $$ with such a broker as much as with a prop firm? Thanks again.
Look at it this way...if you start trading remote from home you probably have about a 5% chance of making it through your first year. If you go prop then you probably have a 30% chance. Most props will require $5-10k and a series 7,55, and maybe 63. It's worth it. The most important factor for you right now is training since you have no idea how to build profitable strategies. You can't get that going remote.
Are you saying I must go for the license, if I go with a pro firm? I was under impression they also let you in as a "customer" with his own capital. I have no interest in the license or using their capital. Can someone also comment on the training you actually receive at these pro firms? I read somewhere on ET that Bright offers very minimal training, true? what about schonfeld, sonic, hold brothers? If there is little or lousy training, what's the reason for not going solo instead?
No, most prop fims will also have a retail division. The difference is usually a lower commission, 100% payout, only 4:1 margin, no license req'd, and a larger initial deposit ($25-30k). Most prop firms employ similar strategies so you will learn variations of mostly the same strategies at each place (like OPG's, filter trading etc.) If you go solo how are you going to learn to trade?
I tried contacting some of these firms, 4 to be exact. The only one that responded was Bright. They said that they don't really provide training other than the week in LV and the boot camp there - all of which is at my own cost (and by the way they don't even have space in their NY office). So, what's the point of working out of their office vs my home? I could sign up for this training on my own. The whole point was to get training from live/experienced traders at a pro firm. How do I get that? Am I missing something?
The way to get training from other traders is to make friends with guys making money, or find someone willing to just help you which is rare. It won't be easy, but what business is? If you just start trading from home and your only learning resources are ET and books you are really stacking the odds against yourself imo.