Do i qualify to be a prop trader?

M

mm2mm

Would any prop firm hire me as a trader with 2+ years experience trading futures (index and energy contracts), and also do paper trade stocks. I am very confident in my abilites to be profitable, and i think i have an edge, but just lack teh capital.
I have track record and can show them my trading history. But in general It's just painful to trade highly volatile futures contracts with with just enough money to afford the contract itself, It's too much of a emo rollercoaster. I believe i do a lot better with more capital. At least have the chance to prove my self? I was lookign for a refular job so i can gather more capital but than i said why not join a prop firm?
 
Why not find out with a combine at topsteptrader? Once funded the profit split is immediately 80/20 which is right up there with prop firms.... but you have no desk fees. I can only speak from personal experience, but this has been one of the best approaches I have found... and it is super low risk.

However, I think most prop firms would want to see a current record of profitable trading. Many who call themselves a prop firm, simply want you to put up a deposit and trade with your max drawdown being your own funds... but they charge you a monthly desk fee, commissions, etc. Not a true prop firm in my opinion...

Good Trades,
Yukoner
 
I am new to the prop firm trading in general, but I don't think i like the business model of topsteptrader , specifically having to pay monthly fee just to paper trade. I don't have the patience or time mess around with that now, maybe a year earlier.. I'm looking more for a traditional prop firm (located in nyc or remote trading) that are easy to accept new traders without too much fuss or time, e.g watch/test me for a week to see if i am profitable, then fund me as a non- pro trader but enough to have the ability to live off my profits. I don't care much about sharing % of profits as a start, Ill take even 50%. Just need a good chunk of capital to trade with. I trade NG, CL and HO regularly and maybe the emini incidences and some agricultural. I much prefer thin markets over markets like ES. Things are becoming very stressful the more i depend on the market forliving expenses, that why i'm looking for regular job atm, but wouldn't mind getting back to trading on a prop firm.
 
A traditional prop firm DOES NOT let you trade your own capital. You trade the firm's capital. "Proprietary trading (also "prop trading") occurs when a firm trades stocks, bonds, currencies, commodities, their derivatives, or other financial instruments with the firm's own money, as opposed to depositors' money, so as to make a profit for itself. "

I am not sure why a lot of people think you trade your own capital. A prop trading firm pays you a couple hundred thousand dollars a year (including performance bonuses) to trade the firm's money. Why would they make you trade your own capital when they have millions/billions to trade? They also have extraordinary culture and training programs, along with great exit opportunities if you want to go work in a hedge fund later.

I think many people here fall for scams or fake prop firms that take your money and force you to pay lots of fees.
 
mm2mm said:
I am new to the prop firm trading in general, but I don't think i like the business model of topsteptrader , specifically having to pay monthly fee just to paper trade. I don't have the patience or time mess around with that now, maybe a year earlier.. I'm looking more for a traditional prop firm (located in nyc or remote trading) that are easy to accept new traders without too much fuss or time, e.g watch/test me for a week to see if i am profitable, then fund me as a non- pro trader but enough to have the ability to live off my profits. I don't care much about sharing % of profits as a start, Ill take even 50%. Just need a good chunk of capital to trade with. I trade NG, CL and HO regularly and maybe the emini incidences and some agricultural. I much prefer thin markets over markets like ES. Things are becoming very stressful the more i depend on the market forliving expenses, that why i'm looking for regular job atm, but wouldn't mind getting back to trading on a prop firm.
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I may have misunderstood your original post and assumed you haven't historically been a profitable trader. Your reference to "confidence in ability, and think I have an edge, but lack capital" is what gave me that impression.

If you have been consistently profitable over the last 6 months, with realistic risk, then I recommend just start banging the doors of prop firms in your area. Send them your statements, and follow up with a phone call and a personal visit. Someone is going to listen to you, and give you an interview.

If you haven't been consistently profitable, then obviously I still recommend topsteptrader, as that "fee" you are referring to is a pittance in compared to what you lose in live trading. Lastly, it isn't sim trading... you pass, they fund you, you trade, you get paid whenever you want on whatever amount you make.
 
drag0nsheath said:
A traditional prop firm DOES NOT let you trade your own capital. You trade the firm's capital. "Proprietary trading (also "prop trading") occurs when a firm trades stocks, bonds, currencies, commodities, their derivatives, or other financial instruments with the firm's own money, as opposed to depositors' money, so as to make a profit for itself. "

I am not sure why a lot of people think you trade your own capital. A prop trading firm pays you a couple hundred thousand dollars a year (including performance bonuses) to trade the firm's money. Why would they make you trade your own capital when they have millions/billions to trade? They also have extraordinary culture and training programs, along with great exit opportunities if you want to go work in a hedge fund later.

I think many people here fall for scams or fake prop firms that take your money and force you to pay lots of fees.
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This is so far from reality it's almost comical. The avg "true" prop firm in Chicago has about 3 to 5 private partners with on avg 5 to 10 million in partner equity. That's it. All these firms are one bad year from insolvency. I honestly think that most the guys on here that lecture others about this model have never stepped foot in a "real" prop firm.

Prop firms are private companies, not banks. Their capital comes 100% from partner equity. And most partners want to keep as little equity in the firm as possible for obvious reasons so for the most part, these firms are very thinly capitalized. I have no idea where this fantasy comes from that these firms have 100's of millions or billions of dollars. LOL. Seriously, how does that even make sense from an accounting perspective?
 
drag0nsheath said:
You need to look up the definition of a prop firm. There are so many examples, but here's just a tiny selection of them. Yes, prop firms do have billions of FIRM CAPITAL on hand to trade. Prop firms begin as startups, and they raised their own capital. They do not manage other people's money/assets or use their partners/employer's money.

Prop firms has nothing to do with discretionary/day/algorithmic/high-frequency/automated/swing trading, and more to do with trading the firm's own money. Big prop firms are usually hft traders and/or market makers, and as a result, they have to have billions to provide liquidity for the markets.


Jane Street trades several billion on a busy day.
Knight Capital (now merged with Getco) has an average daily trading volume of 21 billion in 2012.
Spot Trading average daily volumes is $144.2 billion.
Back in 2006, State Street surpassed 40 billion in daily trading volume. Then again, the economy was much better then, but they still trade a few billion now.
Citadel has 13 billion.
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No dude, see this is what I'm talking about on this website. There is such a fundamental void of mathematical understanding or quite frankly, just plain accounting 101. The amount of notional a firm turns over in a day has to do with frequency, not capital backstop. I use to trade for one of the most notorious equity firms on Wall Street in it's hey day. At our peak we did 5% of the volume on the NYSE. We had shit for real capital backing. It was all turnover. It was only discovered when we went under just how little money there really was behind the curtain. It's all margin man. Smoke and mirrors. Very little "actual" cash to speak of. And again, there is en economic reason for that.
 
Yukoner said:
I may have misunderstood your original post and assumed you haven't historically been a profitable trader. Your reference to "confidence in ability, and think I have an edge, but lack capital" is what gave me that impression.

If you have been consistently profitable over the last 6 months, with realistic risk, then I recommend just start banging the doors of prop firms in your area. Send them your statements, and follow up with a phone call and a personal visit. Someone is going to listen to you, and give you an interview.

If you haven't been consistently profitable, then obviously I still recommend topsteptrader, as that "fee" you are referring to is a pittance in compared to what you lose in live trading. Lastly, it isn't sim trading... you pass, they fund you, you trade, you get paid whenever you want on whatever amount you make.
More...




I have only just recently started to become profitable(first time ever in 2+yrs) so i don't have 6 months of consistency. But my edge/strat works now, and can prove that to the prop firm. Realistic risk just isn't possible in this situation lol. That's why i want to join a prop firm in the first place, to have realistic risk.

& I completely agree with you on the tst part. If only i had found out about them earlier...

I'm looking at these firms now....
http://www.schonfeld.com/
http://www.chimerasecurities.com/
These ones don't require cap contribution or any fees i believe
 
You can try Chimera for their training program, however they trade equities, and you'll have to get your Series 56 license. And unlike other firms that promote "educational courses" Chimera doesn't charge for training.
 
Yukoner said:
Why not find out with a combine at topsteptrader? Once funded the profit split is immediately 80/20 which is right up there with prop firms.... but you have no desk fees. I can only speak from personal experience, but this has been one of the best approaches I have found... and it is super low risk.

However, I think most prop firms would want to see a current record of profitable trading. Many who call themselves a prop firm, simply want you to put up a deposit and trade with your max drawdown being your own funds... but they charge you a monthly desk fee, commissions, etc. Not a true prop firm in my opinion...

Good Trades,
Yukoner
More...

I agree with the profit split, not having desk fees and "super low risk" as far as up front expenses, and it's certainly a better approach than "blowing up" your own futures retail account vs. paying for a combine to "find out" if you can do it.

However, TopStepTrader is not a real "prop firm" since the drawdown IS your own profit. If you go below the starting balance of "zero" once you're live, then you are sent back to the combine (simulator). In essence, it's not much different than if a firm asked you to put up 5k and set your risk at that 5k before you stopped trading. If you make 5k in your live account at TopStep, and then draw down 5k, you're only losing your own money, however the firm is losing their 20% cut as well.
 
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