I have been developing a plan to trade in Thailand. In my previous posts I discussed my desire to trade in Bangkok. Well the plan has taken a turn. Now I am looking to open a proprietary trading firm in Thailand. Please review my business plan. I am looking for any constructive support or criticism. If you would like the data that I used to present this information I would be happy to share. Also if there is anyone with expert advise please PM me. Below is a very brief overview of my business plan. I have 2 spreadsheets to support the cost saving I have listed below. The reason I am confident my business plan will be successful is 1) I have over 10 years experience trading futures, 2) I understand how Thailand works, and 3) I have a background in education. 1. I have traded futures for over 10 years. My experience includes E-mini, interest rate, and energy futures. I believe my best asset is my understanding of the mind of the successful trader. 2. My wife is Thai. I am going to move my family to manage the firm. I have been working on this business plan for over 2 years. 3. I have a degree in Education. I am currently taking courses in Special Education. I know how to train and motivate traders. You asked what the edge would be? Managing expenses is the edge (Strict Money Management) 1. There is a large pool of unemployed college graduates who would work for $50-$100 a month with 10% commission. For example, my wives (she is Thai) cousin is a college graduate who is making $200 a month WITHOUT POTENTIAL COMMISSION. All new traders would trade on the simulator until they showed consistent profitability. If I started with 10 trader trainees it would cost $1,000 a month. 2. KEEP COST LOW INCLUDING DAILY RISK CAPITAL. The trader would have $100 a month draw. As a result, there is no hurry to force profitability. I think the best strategy would be to have very small loss limit - per day and per month. All beginning traders(showed profitability on SIM) would begin trading with $100 daily loss limit. Their monthly loss limit would be 400-500. If they hit monthly loss limit they go back on the simulator. Ideally 1/3 p/l ratio per day would be goal(loss limit $100 profit target $300). All new traders begin on small tick size contract such as NQ, Emini Dow, 10 year, financial spreads, etc. They have to be able to make 3-5 trades before hit 100 loss limit. For example NQ has $5 tick, $20 point. A trader would have to make 5 losing trades in a row to hit loss limit. LOSS LIMIT INCLUDES COMMISSIONS. Very important to hold on to the cost savings. The business plan will have very low loss limit for each trader on daily and monthly basis. It would be very unprofessional to risk employee cost savings with wide loss parameters. Thai 25 traders averaging $25 profit a day over 250 days firm makes $28,750. (PROFITABLE AT $25!!!!!!!) USA 25 traders averaging $25 profit a day over 250 days firm makes $-680,450. (PAINFUL!!!!!!) Thai 25 traders averaging 300 profit a day over 250 days firm makes $1,651,000. ($1,070,000 difference!!!!!) USA 25 traders averaging 300 profit a day over 250 days firm makes $588,300.
just my two cents.... IMHO - in order to offer a viable prop trading deal YOU must have some relationship clearing or commission based that NOBODY else can have! i.e. you can convince some form to give you a deal based on 10-20 (put here the size you want to have) and this relationship must be iron clad otherwise your traders will fuck you in the ass and do this for themselves. This is universal business sense....and makes no difference if you are in Chitown of Bangcock. (yes I know the correct spelling) Your education and other area are bullshit and useless in the trading arena......
thank you for your reply. I already have the clearing relationship. Yes I will have a better cost structure than any trader can get individually. Thank you for your reply. I agree that I must have a trading contract that provides incentive for the trader to stay with me OR scares him enough to stay with my firm until the end of the contract.
There is one company doing it already and I have just visited their offices in Bkk last week. The owner claimed there are others but he is the only one doing it legally and backed up with powerful vitamines if you know what I mean. They are training traders there (I saw about 40 all were foreigners) and carrying out an education programme lasting 3 months (sim trading crude mostly) without any fees charged. Obtaining a license to realize your project and maintaining it legally is already a big hurdle but can probably get solved somehow "for a while". More headache can be expected from competitors who instantly know when you start operating and will watch your fingers moving. Your success is not welcome. PM me if you want to further discuss
This is in response to BkkTrading and Pita. Starting a Proprietory Trading venture is the right way to go for the present in Thailand. But may I suggest that you incorporate trading in Thai instruments too. Besides other things, the time zone factor makes this a very good alternative. It is profitable too. If you are interested, we can discuss this further. Regards, Vilas.
i would be interested in trading the thai market if there is ample info out there regarding the stocks, fundamentals, etc. they are liquid enough to trade and most importantly, a broker with reasonable commish, fees, a good trading platform and quick execution. i may be willing to sacrifice a little profit to trade more normal hours as opposed to trading 'til 3 now, 4 in the winter and then at least 30 minutes to wind down. any info much appreciated. to the OP, best of luck with the whole gig. my wife, Thai also, seems to think that the $50-$100 +10% per month would be a tough sell, especially if they have to sim trade for a month. to me, the prospect of them making $600 per month (with your $300 per day goal) BUT learning something that they can make $6000+ per month when they go off on their own seems well worth it. they should pay you if you have a solid system or even if it is turtle trading. perhaps worth much more than their 4 years. also, as i am sure you already know, contracts here are a little easier to tweak or wriggle out of. not to say contracts don't exist but not so difficult to trade under one of their countless relative's name (they all have at least 47 relatives;-) may be frustrating if your best guys keep leaving and you are always left with the chaff. either way, best of luck with what sounds like an interesting idea, your head seems in the right place.
HI just a few questions. why have you decided not to trade yourself and open a prop firm for other people? have you worked in thailand ( holidays do not count ) what nationality are you? whats your general opinion on thais and their opinion of you?
I think that is simple - working together is better than sittin alone and - happy if in plus - moping if......... Vilas.
opening a prop because i had more success in the prop situation. One of the biggest problems proprietary traders make is not realizing all the different jobs they have taken when they try to trade on their own. When you are a prop trader you have one job TRADING! As an independent trader you have several job titles. risk manager office location specialist business manager strategic planning(increase size etc.) TRADER I think traders are at their best as a prop trader. My wife is Thai and i think it would be an excellent opportunity. Nationality is USA(Irish). My wife is native Thai. Thais like me and I like Thais. The most important thing is they have educated young class of college students that are looking to succeed. My wife's cousin is working for a foreign marketing company working 10 hour days for $275 a month. I will answer any further questions that you may have.
Good idea , thais dont need to make a lot to live well. You need to incorporate local products, thai stocks, thai futures, malay and singapore. one problem will be speed to trade u.s. products. i live between chiang mai, pai and singapore SGX member. only problem is bangkok what terrible city. try hua hin, chiang mai, phuket better places