The Perfect Prop Firm

how many times do I have to tell you this? I can make 20% a year and I have the track record to prove it. So how much do I need to make a living full time? More than I have. So where do I go? To a prop firm. Yes I give up some of the profits, but I get a whole lot more buying power than the margin my retail broker will give me.

 

Of course when you got more money to trade, the potential profits are higher, that's true.

But keep in mind that you also can get intraday leverage as a retailer. For example, if you trade at Tradestation, you get 5:1 intraday and 2:1 overnight. So if you deposit 50k, that's 250k intraday buying power which is quite high.

 

well hell yes, you can get 40 to 1 trading forex, but we are talking about poor stock traders who struggle to come up with 25k and the best they can get is 50% margin.

 

1. Access to co-located infrastructure.

2. Low comms.

3. Leverage.

4. No salary (to keep certain people away).

Split and desk don't matter as much as 1-4.

 

Suppose a single guy lives in NYC (or Boston or Chicago) and it costs him $100K (take home not gross) to lead an almost comfortable middle class life and he has $250K buying power. And some could make a case the almost comfortable is a stretch ... not quite comfortable might be a better description. If he has a 65% strategy after he pays Fed, State & City tax he covers his nut and adds ZERO to his trading capital. With a 50% strategy he needs to skip lunch twice a week to cover and donate the painting Aunt Betsy left him that is worth maybe $400 and buy an appraisal pegging it at $30K so he cuts the tax bite.

How hard is it to understand he needs not just more leverage but a good deal more leverage JUST TO SURVIVE! To not understand that the prop equation is essential for some traders is to not be able to do fifth grade math. The trader described cannot make the numbers work without prop. The fact is the $250K in buying power is, for many, not "quite high".

If he moves and cuts his personal nut to $70K he can add $30K a year to capital. Not a great equation and he has moved away from family friends etc. When you need to gear it up prop makes a great deal of sense unless of course fifth grade math makes no sense to you. I know I must sound old and cranky (probably because I am old and cranky) but it really gets wearing to have a thread with value clogged up with people who can't do 2+2 without it adding to 3.547.

 

I hear ya, the world took a giant step backwards when they moved from Texas Instruments Calculators to I pads.

otherwise, stock trading is for us old coots who use to watch Wall Street Week with Louise Rukheiser on PBS from Owens Mills Maryland.

Any young kid that is still doing it is lost in the past. Have you ever watched CNBC when they film from the floor of the NYSE? Aint nothing left but us oldtimers.

Get the hell out of the city, move someplace cheap, trade futures or forex and get the margin you need plus the favorable cap gains, that's how all successful bussiness's do it, that's why we don't make I pads in NYC.

but still, on a weekend it's nice to dream about what working at a good prop firm would be like if we were still living in the good old days.

 

Finally some one put my ideas about PERFECT PROP FIRM into words. Thanks. I would like to have talent like following at my ideal FIRM . Even KING OF TRADING like Adam in this example, need 14 months training. Adam and traders like him seems to rely heavily on INTUITION. I can not focus on 50-100 names yet, so for me it is CRUDE OIL ONLY and I do have some INTUITION when it comes to CRUDE OIL after 4,000 hours . I am a slow learner (lol).

A year ago we called Adam Guren — age 28 — the Lebron James of trading. Given his consistent success like King James, Adam was the obvious choice for the top spot on our first annual list.
After graduating Duke in 2003, Adam played professional soccer for a season with the Cleveland Force before starting in the prestigious training program at First New York Securities. After a 14 month apprenticeship, Adam started trading his own book while expanding his focus from Europe to Asia.
Now, Adam focuses on global stocks. His day looks much like a British colonel’s when the sun never set on the British Empire. But with patience and discipline, Adam finds a way to replicate his success in multiple markets. He starts his process by logging on premarket. Then he spends approximately an hour, sometimes thirty minutes, seeing if there’s news out in the basket of stocks he follows. This is how he figures out if there’s any opportunities because he looks for newsworthy events that are going to move his stocks.
When I asked Adam about how he makes his moves, he said:
I’m not a technician and I really don’t study charts. That’s not to say I won’t look at them to see where things are. At the same time, I’m not a big fundamental guy based on the nature of how long I hold a position. I mean, I do understand the fundamentals of each stock and what people generally expect, but for the most part I rely heavily on intuition and the feel I have for a stock based on watching it for so long. After watching the same 50-100 names, you start to easily understand how they trade and what moves them. It’s pattern recognition.
Another key to Adam’s success is his risk management:
Every trade I get into I have a very good understanding of the risk-reward. One of the keys to success is measuring risk-reward. And one of the best ways to do that, as elementary as it sounds, is to buy low and sell high. So you want to buy when things are beat up and sell when things are overdone on the upside. I’d say I do a good job of measuring risk. It’s probably one of the main reasons why I am successful at trading.
Although this sounds very basic, it’s obviously easier said than done. Given that over 85% of traders lose money, Adam has proven that mastering the fundamentals is the key to success as a professional trader.
If you would like to nominate traders for future awards, please send us an email or comment below.


Read more: http://www.businessinsider.com/meet...der-first-new-york-securities-3#ixzz1kCEpJTVv



Hi Maverick 74,

You are always thinking. Thanks for the Thread. FUCK that HITnRUN coward. Let me know when he shows up at your office.


ON A SIDE NOTE: Some traders are making a case why it does not make sense to trade for a firm. All, I know top talent work for a firm or they start their own firms after working at a firm. There are always exceptions , a usual.

 

I actually intended my advanced age to be only a minor point not my central theme ... lol.

 

it aint that funny, when you become old, you become a minority, and it gives you a lot more empathy for other minorities.

otherwise, it's a free market and a level playing field

but getting back to the original question, prop like everything else is going to have to give up a few things to stay viable.

Mav wants to make big money like his boss did. Don't we all? Those days are over.

The only place left to make the same kind of money we made in the good old days is independent trading. No limits, no fees, nobody to blame but yourself.

 

I was joking in case you didn't get it. Lucias' post regarding salary and such are most realistic. Most of the other posts are from dreamers.