Quote from Maverick74:
Let me try to further explain. The money management part of this industry is on the sales side, not the buyside. What this means is that in order to build a book of business, you need to do it through one of the private client groups of the big investment banks. This is how most hedge fund managers get their capital. For example, James Cramer built his book at Goldman and when he left to start Cramer-Berkowitz, he took his Goldman clients with him. Steve Cohen started at Gruntal, etc. These are the guys that "manage books". Prop firms don't manage "books" because they don't have clients. They trade partner capital. Partners in general want liquidity and leverage. Holding positions over long periods of time locks up that cash. That creates problems.
Prop firms today are focusing on high frequency and highly quantitative trading methods. They don't "swing" trade. Every trader in this business has to prove his worth through short term trading. There is a really good reason for this. The more you trade, the more you learn. The more you learn, the faster you make it through the learning curve. The faster you make it through the learning curve, the quicker the firm's investment in you pays off.
If you were learning to play tennis for the first time, would you go out on the court and hit 5 balls a day or would you stay on the court for hours and hit 2k balls a day? You'll never learn to play hitting 5 balls a day.
You are in a tough situation because of your age and your current work experience. You are not the only guy on this message board in that rut. I would bet 80% of the guys that post in the prop boards are in your boat. If you read through the threads you will see that all of them are very frustrated with what's out there.
Unfortunately what you are looking for is not going to be available. To be perfectly honest with you, even the young guys are having trouble. The industry is replacing humans with computers. Most firms are hiring programmers, not discretionary traders. That's where we are in this point in the game. It's now a pay to play model. If you want to play the game, you have to pay up.
I'll offer you a suggestion. It's the best one I can think of. Go get your series 7 and become an investment advisor for a broker. Build a book of business. Once you do this you can dedicate a portion of your book to short term or more speculative trading by seeking out clients within your book that are interested in that. As you develop a track record you can market yourself specifically towards those type of clients that want higher returns. At some point when you have enough clients, you can break off from your firm and go on your own. There are a lot of guys that go this route. Is it easy? No. Will it take a long time? You can count on it. But it's a way in the door.
Of course, like was mentioned earlier, you could just fund your own trading account at IB or an FCM and give it a go. There are no easy routes at this point in your life. You are going to have to bust your ass no matter which way you choose. No one is going to hire you to swing trade and pay you a salary though, I'll put money on that. You have my word.
TSTrades you owe Maverick a brew at the nearest Pub!
that was the most honest, advise oriented, balanced realistic response that makes attending these threads worth the bother. Just to sift through all the angst, frustration, anxiety and disgust to find a gem of truth like what he said makes the time spent well worth it.
Thanks Maverick for that post.
Another way that a number of traders used to cut their teeth was to join an exchange. I remember being in Wall Street taking classes at First Options of Chicago before the 1984 crash. Those firms, who essentially were trying to build a book for the newly opened listed CBOE products by extending to the trading cities (San Francisco, Los Angeles, Boston, Philadelphia and NYC) what was being offered in Chicago was one way in the door.
Another way, was in NYC joining one of the many exchanges that have long since gone the way of the Dodo Bird. NYBOT was one exchange that a lot of guys ponied up the $10,000 - $30,000 to get or lease a seat and trade live on the floor. A few other doors were the AMEX Options Pit and Stock pits, since getting even close to the application phase at the NYSE required a WASP name and a 6' presence (essentially a completely locked door). Those opportunities don't exist anymore.
I used to commute with a floor trader on the NYMEX pits, but I believe even the CME bought out the NYMEX, so go figure....
Other than that, take less than $5,000 and open a retail trading account and focus on trading in a cash margin account equity options. Watch CNBC option reports and programing on TV, while working at McDonalds 2nd or 3rd shift. Build a nest egg and leverage from there.
Incidently, other than hubris, nothing is going to nothing is going to fall over you and protect you from the buring sun, as the good book suggests. In this case, that means hire you and provide a salary and allow you to trade and enjoy yourself and job. So you will have to give this to yourself, or bootstrap your way up, like the rest of us have done.
Oh, there is one thing, and that is if you have a recognizable name that brings prestige to the firm, and opens doors, then you can count on a plush trader career, bonus and all. Just the reality of things.
Oh, attendance at one or more of the Traders' Expo events is required, once you have done so, you will see why!
