Hello Monkey, I actually work at the biggest arcade in London, I also know people who trade of have traded at Atlas, GHF, STI, and Kyte. I've only skim read the posts in this thread but here's the deal if you're asking for info. I'll only speak for what happens at where I am as I shouldn't comment on the others. Traditionally we have taken on all sorts, although over the last couple of years the emphasis has moved more towards graduate intake. Everyone here has a different style of trading and there is no training so to speak. They do provide a course on economics but economics are irrelevant in daytrading except for understanding how comments by Fed, ECB members, etc. will effect the market. The trainees then spend 6 months on a simulator and are paid a pittance whilst they gain this experience just to keep them going. Once you go live you pick a contract such as Euribor, Bund, Bobl, Schatz, Gilt, T-Note, Eurostoxx, etc and focus on this with small size slowly building up your account. If you lose money the company take the hit until they lose faith in you and you have to leave. Hopefully this doesn't happen though and you go along increasing your size as you improve. For this chance you pay £1750 a month plus extra for any additional support you may want. You also obviously pay the commission fee for each round turn. The company will also take a percentage of your profits usually 40% for the first two years and then you renegotiate as you spend more time there. I moved to 75%-25% in my favour after my second year. The costs may seem steep at first when you're trading 1 lots but a year down the line when your throwing 400 lot clips around in Euribor or 150 in the Bund, your whole desk rent for the month is simply the price of 1 tick. So this is how it works. It is a huge fallacy that the majority of daytraders fail. Maybe this holds up for the people trading at home but we have hundreds of traders in London alone and I've only ever seen about three people leave because they weren't profitable. Don't get me wrong it's not a licence to print money and I have struggled myself but you never know who will be good at this job. Many of the most successful traders I know are people actually not very bright and one of the people that had to leave the company was a chess master. And that's the thing about daytrading it's really just a big computer game, you don't need a brain and the more you try to work out what is happening, the more likely you are to fail. Go with the flow. Just as an example, the guy who sits next to me started trading as a novice with us 18 months ago, he's been trading live for just over a year. He makes £150k a month and does 120k round trips a month. (which means a rebate of over £20k on top of your p & l) Another of our guys who started at the same time has done significantly better and has had a couple of £100k days, he clips 1000 lots each trade. These boys are exceptions though, I myself after 2.5 years have only had moderate success and last year made about £50k. It took me quite a while to become profitable and then three weeks ago I lost £65k on the nonfarm payroll number wiping myself out in the process. And I'm a trader that has never had a big hit in my life. So if you go down this avenue, you must be prepared to take the rough with the smooth in equal measure. The point is, you never know until you try. I have seen guys lose money every week for a year and almost get sacked only to be given another chance and a year later they are absolutely flying making £50k a month. The truth is though that almost everyone here does okay and the only limitations are the ones you set on yourself. If you are interested in trading for a company like us let me know more about yourself. I don't have anything to do with the selection process but I will gladly give a cv to the head of training if you're suitable. You've shown a bit of initiative in finding out the names of some of the prop firms in London and they like that. Do you know how I started in this job? I met an old LIFFE floor trader in a pub and he was impressed with my enthusiasm and got me an interview. The rest was down to me. Before then I was at a guitar college and had never heard of futures trading. This is my first visit here (looking for inspiration after the nonfarm trade) and if anyone is interested I will post here regularly and give readers a real taste of a trading day in London, it might be interesting to see how the experience differs from the guys trading at home.
Hey Stratcat! Awesome post! Finally somebody who brings some realism into all the myths about day trading. I had a violent discussion about this on the other thread yesterday (Gary Smith Challenge), with people claiming "day trading futures is impossible". This guy had offered $500 (LMAO) to anybody prepared to show his financial statements to prove he's a profitable trader! The question is which successful trader would even bother winking for $500... Myself, I am finding the idea of trading in the UK more and more attractive. Since I'm in the Commonwealth (Australian), the work in UK would be no problem, so I might consider this one day in the future. Thinking of the leverage... Even with a 70:30 split, I'd only need to do 4X my current size to make more than I'm making now! But less risk, less expenses etc etc! Must be very conducive to productive trading, the whole prop environment. Not only reduces the 'risk' factor of trading your own money, but let's face it: Trading from home all day long, every day, can be pretty boring and asocial. Being in a firm with lots of other traders must be awesome! And the ping to the exchanges would be a million times faster than from over here (worst ping in the world) I am currently trading DAX, and this would probably be a problem for prop trading (not liquid enough), so I'd have to look for a different instrument in Europe. But otherwise - seems like an option for the future... All that said, thanks for sharing all this! I am very much looking forward to your posts here and anecdotes of trading in London! Go ahead man! This is one of the best threads on ET. P.S: I assume you like Stratocasters...
Interesting post Strat, do you mind if I ask which London arcade you are in? Scientist - I would definitely recommend going to London if you are serious about trading actively intraday. The timezone is much better and London is a major financial centre so there are trading & markets-related opportunities that don't exist anywhere else (except NYC, and possibly Hong Kong). The weather and traffic is terrible, housing costs are silly, but apart from that it is great fun, especially if you are young and/or single. I moved out last summer and am already getting the itch to move back.
Strat, Yes I think we'd be all interested in reading your account of the daily trading at your firm. Scientist, nobody ever said daytrading stock index futures off the floor was impossible, but clearly some people are deluding themselves thinking they can consistently make X amount PER DAY trading from their home PC. I also find hard to believe the numbers thrown around by Strat, 150K a month consistently, 1.8M a year, that 's the stuff of market wizards dude,after a year? Strat, I am not questioning your sincerity. Have you seen their statements ?
Kicking - You're right, the 150K/month (quid on top of that) seem a bit mega. But then - Who are the "Market Wizards"? Prop traders who made millions trading 1,000 cars a clip? No. They were people who did it themselves, at home, with their own scarce capital, and grew it from the very beginning. Marty Schwartz started with, what? $13K? He made $20M in a few years, he had no problems even averaging returns of 2,000%+ per annum over several years. And he did it all by himself. That is true market wizardry. I think that's a huge difference from doing that as a trader at a prop firm, having your "bed made" with superior infrastructure, and "unlimited" capital and no risk (which is a psychological bonus). If you're with a prop firm, and you can do well with 10 cars a clip, then they give you 100. If you do well with 100, they give you 1,000. And so on - without the requirement of cumulation. They just "ration" you depending on how good you are - like investment banks. The number of contracts you trades just become numbers, and so does the money you "make". I don't think that has much to do with market wizardry. It's just a blue collar job like any other. You work harder and you make more, it's still not the same as "building your own empire" - And sustaining it. Remember, if you're a private trader, you need to be careful and stash away $hit-loads, so you're prepared for a major adversity like a market crash, which will occur in any private trader's career. As a prop trader, you don't have to worry about that. The worst thing to happen is that you lose your job - And start anew at the firm next door... :eek:
The firm I worked at before I set up on my own had a couple of traders making £1-3 million trading the Bund/Bobl intraday. So yes, there are people who make those returns. Obviously they didn't get to keep all of it though. Trading their own account they would probably dial down the size. In a panic move they can lose everthing at the firm and it won't be *that* big a deal. If it's their own money then they'd go bankrupt. So you can't really do the same kind of size, and returns would drop maybe by half or more, depending how risk-averse you are. There was a guy I sat near at my first clearing firm, a former bank trader who traded 1000-2000 lots and would have 10-30k days regularly, and sometime 100k. However, he also had a £500k losing day once, and a few months later he lost everything - a multimillion account vaporised in 24 hours. So generally the big hitters are playing for big stakes, and it cuts both ways. There are some big hitters who have great risk control too, but they are very few and far between. They are the real market wizards IMO.
At an I Bank I won't name, I sat next a guy who made 25million Eur in 99 trading the bund up to 3000 lots at a time. Then he lost 8millions during the first quarter of 2000 and got fired (he got fired because he refused to reduce his size during his drawdown and even increased it)
Yeah. Not to mention the guy at Deutsche who took the other side of Niederhoffer's "final trade" and made $45M within a few days... Mind you though, if you're talking 3,000-lots, then you're talking E 30K per tick. That means over a year, you need to net an average of 3.47T per day to make E 25M. I don't think it's hard for a decent Bund trader to manage an average of 3.5T/day...
I didn't know about thet one but the guy I am talking about was mainly daytrading and sometimes holding for 2-3 days. That's a big difference.