Alternatives to Prop Firms?
- Thread starter TsTrades
- Start date
Check out there Masters in Financial Engineering. This was the degree to which I was primarily referring. Been so long since I looked into attending one of the programs that I forget they aren't part of the MBA track.
As others have stated, in this and other threads on ET, equity trading on the street is largely becoming (may have completely become) a quantitative affair.
Out of interest, why don't people with great track records just trade their own funds? Anyone with a decent track record should have at least $1 mill stashed away, and 20%+ per annum on that is enough to do it yourself. Set up an incubator fund, trade it for 1-3 years, and you will start attracting capital.
Great posts on this thread by the way, shame the OP didn't listen.
I'll give you some of the most common things I hear. In some cases guys are using an automated trading system that requires a certain amount of capital to contain volatility. So it could be a guy that is trading a system with 50k in capital that ideally needs 250k to 500k to run effectively.
In other cases, guys want to make more money with less risk. Say you have 100k and you are making 50% a year but you are also risking 30% drawdowns. So they would rather earn 20% a year on 10 million with 7% drawdowns. They make more money taking less risk. Nobody wants to push their account all in to earn sufficient returns.
In other cases, the guys who are trying to raise the "big" money, they can't do it with a track of under 10 million. Many fund of funds here in Chicago are prohibited from even looking at a guy unless he already has 50 to 100 million AUM.
Haven't read it all yet, but this thread is hilarious. Just a comment about prop firms my man. It sounds like the "prop" firm you were a part of was actually what is now called "retail in disguise". A true prop firm would not require that you put up a deposit. A true prop firm would capitalize you and hopefully they would set you up with some sort of mentor in addition to some form of training as well. True prop firms have at least some/a little vested interest in your success.
On another note, it seems like you've passed over the advice that Maverick offered....if there is anyone on this site that knows anything about the world of trading, it's that guy. Maverick I'd like to thank you by the way for the thread on tape reading when you went back and forth with shortseller. Classic. I remember my mentor having me read that before I started trading and it made very little sense to me. After I traded for a few months it made more sense, now here we are almost 4 years later and it's second nature to me in watching price action. Although I rarely ever saw double prints.
i never post on this board, i use it to research trading. for the record, i've been in sales 5-6 years, went on to retail brokerage, and am currently a financial advisor for one of the biggest insurance/annuity/money mgmt companies in the country.
What i am thoroughly experienced in is turnover and bad attitudes. people who come in with shitty attitudes and a sense of entitlement either don't make it or get asked to leave during the first interview. i've seen it more than once.
Some kid, former floor trader, comes 5 minutes late to my brokerage firm and gets sent home. he's incensed, all "i don't need this, i worked on the floor, blah blah blah..." i didn't argue, but dude, you show up 5 minutes late with an iced coffee and a bagel in your hand, what do you want? If you were that special, maybe you wouldn't need a new job.
That's also an environment where they care less about age, small retail firms. it's not prop and it's not trading school, but top producer my first year did $2.2M (it was his 7th year, he was hired at 47, broke).
I work with a guy with a great resume, goldman and lehman. but he was in operations, and he's lazy, and he sucks at his job. his fancy attitude is actually a detractor from his success. imagine that...
What i am thoroughly experienced in is turnover and bad attitudes. people who come in with shitty attitudes and a sense of entitlement either don't make it or get asked to leave during the first interview. i've seen it more than once.
Some kid, former floor trader, comes 5 minutes late to my brokerage firm and gets sent home. he's incensed, all "i don't need this, i worked on the floor, blah blah blah..." i didn't argue, but dude, you show up 5 minutes late with an iced coffee and a bagel in your hand, what do you want? If you were that special, maybe you wouldn't need a new job.
That's also an environment where they care less about age, small retail firms. it's not prop and it's not trading school, but top producer my first year did $2.2M (it was his 7th year, he was hired at 47, broke).
I work with a guy with a great resume, goldman and lehman. but he was in operations, and he's lazy, and he sucks at his job. his fancy attitude is actually a detractor from his success. imagine that...
Like you I have traded for Prop firms in NY, Chicago, and Florida. I don't think age is a huge factor. I know plenty of guys in their late 30's/40's who get gigs at other prop firms. It comes down to part track record and part risk management. Most real firms these days want to know exactly how you handle risk. That seems to be the most important factor. Even if you have huge numbers, but have giant swings........firms these days won't go near you. Firms seem to want more consistent/base hitters these days. You go into a firm like First NY these days and get clobbered in the first month they will most likely can you.
I know guys in their 30's and 40's as well who got gigs at prop firms. They all had track records.
businessstaxes
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when you trade other people's money you have rules!!! and have more access to capital. use that cash for a downpayment on a house.
trading with house's money not yours.
a genuine prop firm doesn't require capital deposit either or any fees etc. they pay you to come to work and trade.
trading with house's money not yours.
a genuine prop firm doesn't require capital deposit either or any fees etc. they pay you to come to work and trade.