I trade my own acct with about 150k. I do well but I need better than 2:1 leverage to get to where I want to be sooner. I am happy to put up capital at a prop firm, I am even willing to share profits. (I have read in these threads people saying do one or the other, but not both. Duly noted.) Here are the essential issues though: (1) I do not want to get the series 7. I do not want to spend months studying. I have spent 5 years figuring out how to trade and it is just a hoop I have no interest in jumping through. (2) I need to trade remotely as their are no prop shops in my town in the Pacific Northwest. (3) I do not want any pressure to trade someone else's system, to churn or to trade large size. I trade roughly 2000 to 4000 shares total per 50k of acct. equity per day. It is not much size but I have excellent returns (ave = .75 to 1% on equity per week with less than 25% losing weeks and less than 1% losing months .) [losing weeks have never exceeded 1% of total equity. Largest peak-trough drawdown ever = 2.1%] (4) I need to have the leeway to hold positions up to 6 days. My average hold is 1.4 days. (5) I need a per share cost, not a ticket cost as I trade small amounts of 10 to 20 stocks a day. To get the leverage I have been seriously considering starting a fund. But that'll set me back 26k. Someone just reccomended a prop firm but I know very little about them. sO here I am with my questions (1) I scoured the bright trading website and didn't understand what they meant by "haircut" = 1% of leverage per month. Can someone walk me through exactly how this works. (2) Any firms that meet my needs as described above? Is it just wishful thinking or might I find a home for my trading? (3) What kind of leverage can I expect with a prop firm? I trade both long + short. I do not strictly trade pairs, but often I have long/short positions on simultaniously. My max risk exposure is 1.5% of equity at any given time. Most often (80%+) it is 1/2%. (4) Any other advice to a prop. newbie Thx!
Where do you want to get to so fast? With 52% uncompounded annual return on a $150K account you will eventually own the world anyway. Savor the delicious prospect of you imminent world domination and spend the extra time figuring out how to keep the rest of a resentful planet from confiscating your non-productive wealth. Or who you will trade against when you ARE the market.
There are shops that will give you lots of leverage, let you hold as long as you want and trade however you want. They'll usually charge you for that capital usage (haircut, interest), but the rates are reasonable and negotiable. However if you don't want to get your series 7, then you are likely out of luck. The places like genesis and the many retail llc's out there now will give you good intra-day leverage, but usually are pretty limited on overnights. I don't know why people make such a big deal about the series 7. You buy the books, put in a few weeks of studying and write a multiple-choice exam. It's not rocket science, the material is easy, there's just lots of it. If you feel the pay off for trading how you want isn't worth the effort, then you just don't want it bad enough.
While I appreciate your extraordinary ability to do math, perhaps you are not aware that most trading systems have limits on the amount of money they can manage. Considerations such as liquidity will prevent this so called "imminent world domination" that you so optimistically profer. And in fact will keep my fortune quite modest. May I also propose that you are either unluckily unaware, or purposefully cycnical about the notion of "regime shift" in the market. All edges that a particular trader might have will eventually disappear. I personally would like to exploit this 52% return while the market allows it with the most capital I can. While diametrically opposed at times, may I humbly reccomend you read Nassim Taleb's Fooled by Randomness and Neiderhoffer's Education of a Speculator. Perhaps then you will see that my trading methodology that gives me returns similiar to the early returns of LTCM (see Lowenstein's When Genius Failed) is not a gravy train I can ride until I own the world. But thanks for your dose of bitter jealousy. All the best to you.
excellent book reccomendations, izzi. among the top 5 trading books ever written. my question to you--MOST brokers provide 4/1 leverage, this seems like plenty. if you need more, there are many prop type firms that do not require series 7--- surfer