Careful guys...Don't make too many comments against prop firms on this board. I made a similar post (along with someone else) about prop firms over on Don Bright's thread and they were promptly deleted. It wasn't even negative, I just said that I was making plenty swing trading from home...and didn't personally see the need for a prop firm...deleted. I guess Don Bright and the other "executives" shouldn't be exposed to such mindless drivel.
Reality check to newbies !!!! There are two kinds of prop firms; A) front money from trader - prop firm risks ZERO takes cut charges money for software, computer, office etc Summary: for the birds !!!! Not worth it. Bullets are expensive office, software cost can be minimized with IB, or some other retail firm. B) firm fronts all money and takes percentage, employs trader Summary: maybe if firms is legit. Prop firms will not do anything that is against *their* interest. Of course this applies to all prop firms. Be careful with them and first of all watch the bottom line. what will it cost you "the privilege" to risk your money. Or if you can risk their money what do you pay-up or give for that. Training - I think (and certainly I have not seen it all) - marginal and tainted, they will train you to risk management and commission generation NOT HOW TO MAKE MONEY !!!! If you could teach someone how to make money consistently it would be done by others. Simply said, since markets change so much one can't teach you squat. The very basic you get from books anyway - you don't need Kanter(etg) ridiculous tapes. I will go on the record and wager to say B) is very difficult to get in and they are more selective, Schoenfeld etc.
OK, so if you trade from home your broker, data vendor, chart vendor, who you pay for your computer lease, your isp and the guy who sold you your desk all ripped you off? Get real, these are all costs of doing business and depending on your trading style, it could be quite a bit cheaper at a shop that provides all this for a fee. Bullets are expensive. Yes, more than the one cent a share commission you pay IB, but while you're waiting for an uptick, the pro trader is already hundreds or thousands of dollars up on you. Not to mention the benefit of working in a setting with other professionals, some of whom are among the best in their business. I think you would soak up a lot of knowledge from that atmosphere.
I can have redundant lines Cable and DSL for $80 month IB is cheap and free. There is no need of anything else ! Period. If you need too many "crutches" to trade maybe you should not !!!
That's why I said "depending on your trading style". If you swing trade and use a free web-based chart service and IB just for order entry, then a pro firm probably wouldn't benefit you. If you need real time market scanning, fast execution, big leverage, bullets or other features of a pro shop to execute your trading plan, then the desk fee and commute might be worth it to you. When you say there is no need of anything else, you are speaking only for yourself.
A quote has been said by many professionals," Once they trade as a Professional way they would never go back to retail." I would agree... Robert Tharp
andrasnm, You'll lose this one with these guys. It does depend on your setup. I don't count the internet connection (as an expense) because I would have that at home anyway, or the desk, or the food I eat during the day. These guys talk about being "surrounded by other professionals". That may be a good thing for them, but I'd get distracted. I own two dogs and have a great wife at home. If I don't want to see her (or the dogs), I close the office door. I live in the metro DC area and commuting anywhere here is a nightmare. I think you and I feel we don't NEED the prop firm stuff. If you suddenly feel the need to spend $600 bucks a month to trade, you let me know and we'll start our own prop firm.
I'm confused by this argument. Obviously different personalities in different situations prefer different accomodations.