Ok not a problem, let my start to tell my definition of a Prop: 1. A trader joins a firm, and then trades with the company's money, i.e. 5 Million Dollars. Then, the profit the trader makes will be shared in a certain ratio, for example 50/50. However, there is also another definition of a "prop firm" that is around: 2. The trader gets intraday leverage. Those guys are not interested in how much money the trader makes, they make money from commissions. So the only thing they are interested in is how much monthly volume the trader does.
Thank you very much for the RIA suggestion and some color on basis trade size - 1000 contracts. sweet. What you describe is very similar to investment bank model. They are doing a bunch of client flow, marking up both while buying and selling, index futures-cash arb, pair trading, basket trading - dispersion et all, vol surface arb, vol market making etc. Now, if I am a FX trader, trading multiple fx pairs (2-4) 5-15 times intraday based on 4-5 different strategies (that I don't want to share with the firm), so I don't code up systems rather do execution with my hand. And I have a track-record of 8-10 months, all months positive with a sharpe of >1.2 and PF > 1.6 but only with a TINY capital in my personal account, do you think any of the above firm will be open to the idea of giving me a book to run ? Don't you think this directional way of trading would be adding to their strategy diversification - since they are already running all the arbs and correlation based models ? I ask this because becoming CTA/RIA and raising a fund is much harder compared to joining a prop firm on a profit sharing basis. Do you think there is a prop firm that will be interested in someone like me ? And if yes, what kind of profit split will be possible? Thanks again for your insights.
Gmst, I don't think anyone will be interested. Most of the action in the FX space is all HFT. There is nothing wrong with being a directional trader. You are just not going to get backing. My best advice is to build up capital either with a bucket shop or trade futures. Once you have a track record, form a CTA. I know it's hard work. So is becoming a doctor or lawyer. Just push yourself, you can do it.
Mav, weren't you the one who started a thread about how 99:1 payouts were finished? And you've always had a number of good discussions with dear Don Bright on the state of the prop world in general. Now you're telling me that in this thread alone that prop refers to holier-than-thou firms that wouldn't even talk to little shmoes like us? I apologize, I didn't realize this thread was only addressed to laid-off/washed up institutional traders that secretly lurk on ET lol. Don't worry though, I have as much attitude as anyone else on this forum. Institutional traders couldnt trade their own accounts if their lives depended on it, for one. Market-neutral is for pussies; if you can't trade directional, frankly, you're not a real trader. Directional and leveraged? That's my own money each and every day. I just don't get the feeling you understand what an independent trader is. Lol ok I'll go crawl back into the hole from whence I came.
Why don't you just admit you don't know a fucking thing about me and move on and beat your kids already. I've never been an institutional trader. I have never run a prop firm. I never will run a prop firm and I'm not selling anything. I hope you "guess" direction better then you guess people because you seem to be lousy at both. BTW, I've been an independent trader for 15 years. Good luck at Dimension or whatever shithole prop you trade at.
Dude, i asked a couple serious questions about how the prop model stays in business in this kind of market, and I get told I don't know what kind of world I've been trading in? That, LOL, it isn't about scalping some stupid Internet stocks? I'm not the one giving off an attitude to begin with. Why would I know anything about you except for what you post? Honestly, I've always thought you were someone who posted good info and knew the markets. You gave me an impression that this thread was about prop in general. Clarify further in the future please. I've been trading on my own for 14 years. I'm having my best year yet "guessing" at this market. Why? Cuz when you drop the attitude and learn some humility, you realize it IS all about guessing. You just need to guess better than others. I'm not directing this at anyone specifically, just in general lol. How's that for people skills?
Have you honestly read the entire thread? And not just jumped in at the end? I posed the question what is "perfect prop firm"? Most people would describe the "real props", especially here in Chicago. I didn't do that, they did. They then asked what it takes to get that job. I told them. I never once gave my opinion on that. I simply answered the questions. This thread is not about what "I" think the perfect firm is. It's about what the ET community thought the perfect firm is. For all I know everyone would have answered Bright Trading. Then people started asking what it takes to get fully backed and I answered them. I gave them the truth. Something that is pretty rare on ET. This thread is not about me or what I think.
it really depends what the spread would be IE commission rate : profit split, but you definitely have to take volume into account and other costs associated with trading. For me personally, I'd rather keep more profits and be a client and not have to do with the corporate bullshit. That's why I put up my own money. once the fully-backed or big profit split comes in, that's when the firms start to try to control the trader and criticize every little move. Maybe that's not the case at some places, but I like having my freedom & independence. It's really just a way to trade a nice account without having to put up all the capital or pay those crazy rates the retail firms charge. I don't see what all the fuss about getting a job at a trading firm is about really. Just go to school and get a job in banking. You'll be better off.
Not sure what the corporate bullshit is or would be. Most these guys wear t-shirts and shorts to work and do what they want. It's not IBM. LOL.