Somebody in a previous post took my quote of Rates aren't everything out of context--if you were to read back. If a guy is paying lower than everybody in the business but isn't making a dime? What do rates matter to him? If he isn't gross positive than it won't matter what he has net as it will be negative also. Unforunately one of the posters isn't comparing apples to apples and oranges to oranges. He's mentioned Bright and other firms in comparision to Lynx comparing, commissions, bullet costs and so forth. What about yearly exchange fee's, monthly desk fee's, % payout, and so forth. The firms have to make money otherwise they become just like ICAP direct. Which is now defunct. Yep they are no longer around. Who cares if you are paying .0005 per share but 4 months later lose your $50,000 you deposited to the firm? Being able to get your money out I'd say is a lot more important than commissions. The arguements have been over higher cost and so forth. You can't have both worlds. If you want some type of training and people are going to take the time to explain they need to be compensated in some way for it. Maybe commissions/overrides might be an answer for it.......... but what if the strategies are low volume? The firm has to pay it's bills and if they teach low volume strategies than they need to find another way to make sure they can keep the lights on. This isn't rocket science here. Some of the posters are stating opinions while I'm just stating facts. ICAP is now defunct They had less than 20 traders who have lost all their money to the defunct firm (and some were rather good traders--The NY Lynx office has backed some due to their sheets) Lynx was then compared to some retail firms.......again that' s not apples to apples but apples to oranges. Retail firms have higher capital requirements, most don't have access to bullets and so forth. Than there was Bright--Lynx was compared to which is a very different business model. A lot of their strategies are high volume with PAIRS/OPENS and so forth. They make money off the commissions, charge a desk fee and so forth. The facts are this. Lynx trains their traders. They have only been around for a year and now have waiting lists for both the San Diego and New York offices. You can attack Andover for having a minimum for bullets of 500 shares. Yet Andover has over 1200 traders Compare this to most of the other prop firms.... ( #'s below not guaranteed) Bright with 600 ECHO with around 180-270 or so Liber and Weissman with about 100 World CO with about 800 (haven't verifed this in awhile) and so forth. When the firm is this large maybe they are doing something right. Robert
i work at ETG and can't say the training made me profitable. it's a business where you learn by doing, though they could've done a better job on teaching tape reading. "No firm will tell you to trade small and take home positions etc." nah, they won't teach you to trade small and take home overnights, but become profitable and you can do whatever you want. for example, several people can trade options, including myself - which certainly is not a big commission generator.
We are agreeing on some parts at least. I've found that training traders actually helps my P&L a lot to be honest(and not talking about the back end). This is due to having my trainees copy just my trades for awhile. I am now feeling responsible for my trainees trades, and this caused me to stop taking any sort of stupid /self sabatoge trades. But I know other guys who have had their personal P&L hurt by training others since they have to spend time explaining what they do. This is especially true for thin stocks, arbitrage and so forth where their is a very limited opportunity. Guys I'm trading with or have traded with can back me up pretty well. Ask Lescor, HarmonicPatrick, 2 Points, SDtrader, JWKirkland, MartinWeinberg, WarEagle, about my trading (all posters on the board who I've worked with) or feel free to contact the office asking to speak to the traders I'm working with about me. Robert
So, you are one of their trainers, sorry I did not know that. Again my discussion was about trainers in general and I used word likely, and I have no interest in knowing your profitability at least this time.
Anyone on this board ever gone through a training program or trade for/at one of the big market makers, i.e. Goldman, Herzog, Merrill, Knight, etc? Seems like with all the layoffs on trading desks that some firms must have picked up some marketmaker refugees the last few months. If anyone has could you post what that is like and give us a flavor for how long they take to develop a trader there. Thanks. Avalanche
The few market makers I've met have not successfully made the switch to prop trading. The institutional trading style is very different and these market maker refugees have not made the adjustment. I guess they weren't good market makers to begin with, that's why they were laid off.
I had heard that those guys are so used to leaning on or trading with large order flow that they struggle when they don't have access to it anymore , but I have a hard time believing that someone who has spent a year on a large trading desk somewhere couldn't eek out a few hundred bucks a day prop trading. Maybe the transiton is harder than I think, but I doubt it. Anyone here ever been a market maker or an instutional trader?
I can give a little insight b/c I worked at a mm (wholesaler) b/4 our main bank shut us down last summer... As far as training, it is very on-desk oriented. In the classroom (1/2 of the training 1/2 on desk ) they touch upon charting basics, the software used, the rules of order handling, and communicating w/salesman and the lingo used on desks... In general it is used to familiarize yourslef w/the trading room environment.. As far as charting they just tell you about it and say, it is up to you to learn more (MAJOR MISTAKE IN MY VIEW) From there you sit w/traders and watch/help trade there lists until you get picked up fulltime by a trader. (I got lucky b/c I had previous market exp and got picked up bya a top trader quickly..) That is pretty much it for training.... They main difference b/w prop/day trading and market making is yes, the order flow, and the level of preparation for your trades... Let me explain, in the old environment (pre super soes and decimals) market making was a great game. When you took a personal position if you were wrong, it was the firms $$ and it didnt effect you emotiuonally as much. After all, you had a constant supply of customers orders coming on your screen, so it was only a matter of time b/4 you broke even again to make up for your bad trade... Now market making has been destroyed and they are all going out of business due to decimals, ECN popularity and manpower (traders) arent needed b/c everything is automatic.. What makes it hard is that the market makers dont understand enough about how hard daytrading is and the lack the necessary in depth understanding of charting, and money management (after all it was the firms $$).. I am looking to go to a pro shop soon, and I think my biggest challenges are: 1. money mgt. Knowing how much to trade per trade... 2. psychology: not getting bothered when I see MY capital drop.. 3. stock selection. This I need help with probably the most. My list at my last job had about 20 stocks, that was my trading universe... Now I have all listed and nasdaq to scan across. How do I go about narrowing this list down through technical analysis? Is their a software program that does this? any suggestions would be appreciated....
I doubt they were bad traders, it is just the trading environment these days.... ECN'S are replacing people (market makers) and why should a customer pay .05 /share vs. .01/share. It makes no sense. If market making is even around in 4 years, Id be very surprised. Even our top traders got laid off..