Why do traders fail? Insufficient or no research .. not assembling the data and usually not even getting to the right questions..HOW. Charts .. which I can read effectively .. are not the answer (but if anyone says he/she uses them to good effect then fine). After research, backtesting and successful trade testing, then there is simply being strong or weak .. you have to persevere and end up with a very very reliable system: the Holy Grail.
The ungrateful traders are the firm. Without these ungrateful traders, there won't be a prop firm. If you want to build a successful firm, you should invest in them so that they succeed. When your traders succeed, you, the firm will succeed, and vice versa. A statement like this: "The industry is not in business to allow all traders to survive. Traders have no G-d given right to survive unless they are highly skilled." is saying that you are only concerned about commission and payout rates and how much your firm can earn from them. You don't care about the success of the trader and will probably not make any investments in the trader. With only dollars and cents attitude, the traders will probably fail, and when the traders fail, the firm will go under. Also, your attitude will drive traders away from your firm. If you want higher commissions and lower payout rates, you need to make more investments in the trader than what you are currently implying. A lot more investments are made in traders like John Henry and Victor Niederhoffer than prop traders and that is why John Henry and Victor Niederhoffer can charge and do charge lower rates.
I'm a business person. The goal of my business is to make money trading the markets. I have a strategy that works, but depends on some things that I have to obtain elsewhere- software, leverage, etc. In the business world, nothing is deserved or guaranteed. Before trading, I ran a building maintenance business. I had to buy equipment, insurance, a truck, etc. Then I had to go out and win some work. There were no guarantees I'd make money, but my research and knowledge obviously led me to believe that I could. If I failed, I'd have some debts and would have missed out on other opportunities I could have pursued instead. These were risks I was willing to take, even though there had been business failures by people who had come before me. My trading business is the same way. I have money and a plan, I need software, cheap rates, and leverage. I shop around and find a firm that caters to people like me, just like I shopped around for places that sold insurance and equipment to my last business. If I fail, I'll be out some money, and lost opportunity. Would I expect the firm to eat my losses? Would you expect a contractor to ask you to pay more because they charged you too little? Hell no. I'm a big boy, I know the risks involved. The firm providing services to me knows what they are doing too. I expect them to be reliable and competitive with rates and to treat me with respect. If they don't meet my expectations, I can shop my business around elsewhere. I'm a prop trader who put up $15k, trades low-risk arbitrage strategies and pulls $15-20k out of the market every month irregardless of market direction. All my losses and wins are 100% mine. The firm risks nothing on me and I don't have a problem paying them several thousand dollars a month in commissions for the services they provide to me. That's how the business world works, both sides have to expect to benefit, or no business takes place. All the good traders I know think the same way. Corey
You obviously are not a trader, that much is a given. You also do not have even the slightest clue about the state of the day trading industry right now. I know you apparently think that all traders automatically make money with such great conditions that prop firms provide today. But in reality, a huge majority of the traders just churn and never make any money for themselves EVER. Their "losses" are almost all commissions. Times are tough for day traders and the markets are tough as well. Volume is low and it's not easy to find good plays all the time. 3 years ago, traders expected to make millions a year and now they are happy with 100k a year. Please wake up. You have some kind of bias toward prop traders for no reason whatsoever. You made a valid point in your first post, but you do not have an idea of what kind of an experience most prop traders go through. Trust me, most traders do not end up making anything, even with the "amazing" conditions provided by prop firms.
you say you are a global macro trader. who do you trade through and what kind of rates,deals, etc do firms like yours offer? i know tradestation is moving into commodities, futures, options, currencies. as other smart firms are. don bright - any plans?
you guys are comparing two seperate things. trade ya operates a global macro fund that would eat most every prop firm for lunch capital, brain power, and technology wise. he is not a scalper or day trader---- he plays in a different sandbox entirely. his comments are totally within reason given his market world view. mecro, you are totally correct regarding the state of the traditional day trader. times have never been so difficult. best, surfer
Hey Neal. I remember about a month or two ago you were looking for a few traders to put up their own cap and trade their accounts as customers of your fund. Was wondering if you have found anyone, and how the arrangement is working. How has your fund done this year? Hope things are going well for you. Mike
Ok I guess I should be more specific and state that trade ya is not a day trader. I guess he is a trader, although a completely different type, one that trades for someone else, instead for him/herself. I definitely agree with the capital and technology advantage that his fund may have, but I strongly disagree about the brain-power remark. But that's a whole different discussion altogether.
Trade Yah, you seem to idolize Steve Cohen. Is it just because he is a very good trader or do you actually know him? You seem to like calling him "Stevie".
How do you disagree about brain power? You think the really smart and talented traders trade prop all their lives? What's the point? They either go work for a major hedge fund or start their own. In the event that they want to stay independent, they probably trade their own account and outsource everything else.