TRAINING FEES, what are they really?

Discussion in 'Prop Firms' started by WinItAll, Aug 9, 2009.

  1. Through personal experience and information gathered I have come to the following generalization, not all arcades but most can be described by doing the following.

    A deposit, training fee and capital contribution are all the same thing. If you join a true prop firm there is none of this going on. Whenever you put any sort of money into a firm that you are going to trade for it is simply a risk deposit no matter what the firm calls it.

    They very well may teach you along with it but if you put up 5k and go negative 5k you will be asked to put up more money or be let go. This is for the most part, I'm sure that in some firms if you lose and they see talent they will let you go a little further but the bottom line is that whatever you want to call it, it's a risk deposit. There are ways to get around SEC guidelines for a none broker dealer to fudge with the wording but in reality the only way you're seeing a cent of that money back is if you take home checks.

    Ask any trader that's traded at one of these places, the "training fee" is usually about the exact same amount as the "put more money up or you're fired" negative number.
  2. Hippie, thanks for your comments, I clear straight thru a Self clearing B/D and GS. I'm paying less than 1/1000 but I am doing millions a day so I'm not exactly sure whether it translates, although i do know it translates to a lot less than 6 dollars per thousand. Goldman is much more expensive but I use it more for the upgrades, downgrades and informative nature. So to me it's worth the extra commissions for the research.

    However, any time you are ready to go out on your own and trade 4 to 1 unlicensed or be leveraged by a B/D if you aren't you should never ever have to pay more than .0015. Anything more than that is overkill.

    The difference is by going straight thru a B/D and trading your own capital you cut out the two or three middle men that are causing your commissions to jump. For example, if you trade for a sub llc then you have the group leader taking a piece, the prop firm taking a piece and the B/D taking a piece.

    You want to be trading straight thru a SELF CLEARING B/D so that it's only one person making money off of your trading. For smaller deposits you can find such deals at Hold Bros. and Assent. There is a difference between self clearing and regular broker dealers. Unless they are self clearing, rates will be higher b/c they are still taking a piece. If they're self clearing they both provide the trading platform and the leverage as well as clearing so you're only paying one toll instead of three.
  3. An upfront training fee or tuition is a bigger scam than a risk deposit.

    The training fee is gone before you trade for real. They can keep your money and let you go at any time for any reason. They can let you go while you are still paper trading if they don't want to spending more time with you to help trade better.

    Just think about it, their revenue stream is by getting more newbies paying thousands in tuition. Why should they help a trader who had already paid the fee stay on to profit.

    I have heard of scam firms that do that. They don't wait till you lose your fee or even half of it.

    With a risk deposit, it is somewhat better. You have a fighting chance of getting it back if you don't lose the firm's money.

    TRAINING FEE is the biggest prop scam going. Put up a RISK DEPOSIT is you have too. Say NO to training fees. They are scams.
  4. Depends on the firm. Reputable, honest places that use the loophole of training fees instead of risk deposit do exist. If the firm has been around many years and USED to take risk deposits but now only does training fees, most likely it's just semantics and they won't be dicks to you over it because they don't want to risk losing a multi-hundred-thousand per month business over stealing some piker's remaining $3200 or $1300.
  5. If they are not scams, but only call it a training fee to use a loophole, they should refund whatever portion of fees that you didn't lose to you! They can treat it like a risk deposit.

    A see this kind of "job lsiting" in many major cities. Real jobs or scams? You decide.
  6. this one (at least in the main ad) does not seem to mention anything about fees

    Why do you pick them in particular?
  7. Hippie,

    I have looked at several of your posts in the last few weeks in regards to prop firms and upfront risk capital. And I come to the opinion that you are flat out against this business model. However, in your personal crusade, I wonder if you are taking the time to realize that the firms that offer no risk capital with the best payouts and pricings are probably looking for the best of the best. What's in it for the prop firm that brings along inexperienced traders and offers them an opportunity?

    Also, I must say that I am looking into signing on with one of these prop firms. I think that any amount of training and information they can offer will be more than I have at this point. As for figuring it out yourself, sounds good, but how often is money thrown into the furnace with "trying to figure it out for yourself"?
  8. There's absolutely nothing wrong with figuring it out yourself. You just have to have enough control that you don't get a head of yourself and risk more than you can afford. If you trade 100 or 200 share lots of normal stocks you have plenty of time to learn and try different approaches.

    Both models are good, but the comfort of being in control of your own money made me lean toward the teach yourself model. You can't get screwed or have a deal change if you trade on your own.
  9. Blackacres: I have wrote to the advertiser to find what the deal is. The ad says nothing about the many thousands in "training fee" they are looking for - they are sneaky about it. I wish they are clear about the fees so traders won't waste their time applying to these scam outfits for jobs.

    I was looking for a job, only to find out many so called jobs were over-priced scam online schools asking 5k to 10k or more for what you can learn form a book for $50. You may even learn it free online!

    If they had mentioned that I have to pay many thousands for their training in order to work for them on their initial ad, I would not had bothered.

    I don't mind putting up some risk deposit, but not as "training fee" that is gone before I even start working for them.
  10. Quote from WinItAll:

    I'm not really sure why there are so many negative people on this site.

    because people like you start 3 different threads in one day on the same subject, and some of them pretend to be interested in prop trading when in reality, you are trying to get them to write a book for you

    I thought I could get some good insight from different people's experiences but instead I get a whining little girl like you

    As you said, "I WANT INFO ABOUT PROP FIRMS. PLEASE MAKE YOUR ANSWERS GENUINE AND LENGTHY (By the way, did I mention I am actually writing a book using your experience and did not mention that?

    A deceptive who probably doesn't trade and bashs the business b/c you failed in it.

    Deceptive - person posing as a trader and actually writing a book. "Failed in it" A person who knows nothing about prop trading and begs others for information trying to write a book on a subject he knows nothing about.

    Don't bother responding. You are a selfish crud and I won't be reading it or your "book."

    People are well advised to ignore a content thief.

    Posting to all 3 of his new threads.
    #10     Aug 9, 2009