Quote from propseeker:
for an experienced trader, agreed. for a newbie, though, the biggest edge is actually having an edge, and the second biggest edge (assuming you have the first) is low operating costs.
i started with $2500, a low rate (.0035), and most important, an edge that i had spent more than a year developing. i'd researched risk mgmt, kept my per trade risk tiny and took enough shots with low costs and was able to build that up. no fanatasy, no pipe dream, just smart trading and tight risk control. it wasn't until i was 3 years in, after building a decent roll, where i was able to leverage my experience and track record to get a firm to put some equity behind me and make some real money.
at the time, bright was charging a penny in commissions. i remember that well, because i knew that i would've blown out if i had gone with them. to be fair, they were providing training on an edge that still existed at the time (the infamous opening orders). these days their value-add strategy wise is a ship that has long sailed. which just leaves costs, and truly they're easily the least competitve firm in that category and given the small-edge environment i have no idea why anyone still considers doing business with them. actually, i do: if they don't know any better.
if i were running a prop today, there's no way i'd let some newbie off the street eat up 10k of my capital let alone 50. on principle alone. why should anyone with no experience, no track record, and having done no work be worthy of my risk? what i would consider, is if they came to me with a prospective edge that they'd studied, put some work into, thought about, ie shown some initiative. the only other possibility for letting someone with no experience on my desk would be to work an edge i couldn't automate. if i wasn't doing that (being discriminating), the ONLY edge i'd have as a prop firm is to milk on fees, haircuts and commissions.... which, in a highly efficient market, is a very poor business model. i wish the bright's luck.
