donaldduck3419, Could you post some of the forex prop firms you know of? Or at least the good ones (if there are any "good" ones)...
Try fxcm. Interesting that 'flat earth society' stockies are dissing fx trading considering the frauds committed by so many CEOs etc of publically traded companies, broker price fixing trading of stocks, after-hours trading of mutual funds and 'creative accounting' to state a few of the continual frauds committed in the stocks industry. Online fx brokers in Europe and North America are required to be regulated; in the US of A it is the same agency that regulates the very well functioning futures industry, the CFTC, thereby providing client/broker dispute resolution. Additional benefits of trading fx are the small account size many brokers offer together with small mini/lot margins. Many brokers provide instant fills and guaranteed stops, also providing 'overloss' prevention via their trading program. Fx trades can be Shorted as easily as going Long without an increase in margin, and both intraday and Day-to-Days trading are possible when trading fx currency pairs. Wallace.
Someone tell me please what is so wrong with going long your domestic currency, mine being the USD. I am long USD/CHF I earn interest on my long position and profit if it moves in my direction, that would be up. I see no value in equities at present levels, and don't expect much at all from equities for quite some time.
what is the relationship between FXCM and REFCO ? what do you see as the advantage of FX over euro or yen futures ? surfer
With all due respect to some of my friends on this post, this thread is full of misinformation. Prop. forex is not pushed by major 'prop' firms simply because the juice is not there for them. In other words, it's tough to make money as a prop. house in Forex. Typically (in fact in all cases I've ever heard of), there is no commissions charged in cash Forex transactions (the money is made on the spread). Obviously, this flies directly in the face of the prop. houses as commissions are their main avenue of revenue. Furthermore, most senior management at prop. houses simply do not have experience with Forex. As far as banks rigging the game, etc. this is simply not true and any comments along these lines are borne out of ignorance or alternative agendas. In fact, I would argue that the amount of manipulation that occurs in the Forex market is de minimis to the amount that occurs regularly in equities. Put simply, the market is too large and there are too many players to have manipulation on a grand scale (even central banks cannot manipulate the market for long- see recent $/Yen action by BOJ). Banks regularly employ prop. traders on the desk and allow them free reign within their pre-determined limits. Contrary to previous comments, depending upon experience, these limits range from $50k per day drawdowns to $1 Million+ daily drawdown limits I would hardly consider that a tight leash. More often, banks employ market makers in particular currency pairs to facilitate customer order flow. This activity can be likened most closely with OTC Market Makers with the exception of the spread being miniscuile in comparison to equities and the ability to manipulate an order virtually non-existent. In fact, strict currency market-making is a low-revenue business (in some cases a loss leader) for most banks and is often provided as a 'service' to garner juicer business like structured products, swaps, etc. Obviously, prop. traders at the banks can make huge sums getting a feel for the order flow, however, this entails substantial risk on the part of the bank and is often not much better than simple trend following with a chart. A well paid prop. trader at a bank will generally make a small six-figure draw vs. approx. 10% of their net trading profits. Personally, I have no vested interest in promoting the trading of currencies. I am just trying to put forward the facts. As a trader myself, I find the currency markets to be my vehicle of choice as it operates 24 hours per day, allows for minimal slippage on entry/exit, allows for easy stop order placement and execution with minimal slippage and often has nicely trending markets. As a trend-follower, I find this market to be most suitable. If someone can show me a way to make nice money owning a prop. firm that specializes in Forex, I am happy to start one. However, I just don't see a way to make good, safe $$$ owning a prop. firm specializing in Forex as the spread is the main source of revenue (and the banks have trouble making real $$$ with the normal spread of a major currency pair at 1-2 pips). In sum, currency trading for trader=good; for prop. firm owner=bad.
neal, thanks for the info. the NYC based prop firm i looked at had a 50/50 profit split arrangement--this is how they planned on making $$. not sure if it is working out for them or not. www.propfx.com best, dave
Hey Dave, Who backs the losses? If they do, I say run (don't walk) and take that deal! It's better than any hedge fund in the game (as you know we only make 20%) and the banks only pay around 10% of profits to traders. Of course, you'd want to iron out how much line you can drawdown before getting fired. If that prop. firm is public and they back the losses 100% i'd love to 'put up a bullet' and short them because i'd bet there may be no uptick in their stock. Hope you are well. Look forward to the next time I see you. WSJ wants to come next month if that's ok. Best, Neal.
I just had a look at their website and I think I answered my own question. Obviously, you put up the capital. Deal no good no way. Best, Neal.
neal, when i spoke the them, they backed the traders. perhaps that has changed. you started out trading 2 contracts and were required to trade 10 times a day. i will give them a call and see if this arrangement is still available. dave
i have prop fx on the line. will advise. yes, the WJS is welcome. would be cool if we could arrange some press. i'll be back in NYC on friday. will you be in the city ? dave