Wondering why one would trade prop, give away some of their profits (up to 65%+ in some cases), rather than trading futures at home which give you great leverage with low costs. It seems that energy futures, gold futures, nq, etc have great intraday moves, there is no uptick rule, get out of your position with ease compared to a stock that is moving against you. With as little as $2000-5000 dollars in your account you can be trading hundreds of thousands in capital. What are the advantages of stock and the disadvantages of futures because it seems that futures are a good option over prop trading.
You assume and stereotype what a prop is. You can trade at a prop with your money and keep 100%. People here erroneously assume prop means only one thing...
I am aware of that; I'm generalizing a little bit in order to determine if a successful prop trader could leave, trade futures from home, and have the same success or better. Are there disadvantages to futures vs stocks? I understand the diffuculties associated with daytrading stocks from home versus prop but it seems these are alleviated upon swithching to futures. Furthermore, it seems there are some advantages to trading futures as were previously mentioned. The only disadvantage I can see is that futures can be a leading indicator for stocks - an advantage which is obviously not available to a futures trader.
One more thing; in an arrangement where the trader keeps 100%, would execution fees at the prop firm not be higher than fees to trade futures contracts (IB, for example)?
Futures markets are generally much more efficient than individual stocks, of which there are thousands to choose from. Tiny profitable edges are easier to find and there's less competition in some cases.
He asked why. Yeah why not? Why not options? Why not forex? Why not credit swaps? I saw on TV how a black man can make 15k in ONE forex trade using very simple red/green arrows. Looks like every forex trader can be a certified champion. Can you do it with futures? I mean be a champ.
people are scared of futures because they either don't understand them, have heard horror stories of being blown out in a limit move, or lack the discipline to trade them. If i have 100k and trade 2000 shares of a $50 stock with a .20 stop, most I will lose on the trade is ~$400 or less than 1/2 a %. If I have 5 k and trade 10 contracts with $500 margins with 2 point stops then one bad trade will eat 20% of my capital, and with poor discipline most will get the deer in the headlights and lose much more.
Any prop where you get 100% of profits is saddling you with some high commisions, desk fees and tech charges. It is my experience that the vast majority of prop training is the equivalent of throwing a child in a pool and seeing if they sink or swim, if the sink just toss in another kid.