Do i qualify to be a prop trader?
- Thread starter mm2mm
- Start date
I'm going to try to give you some good advice here. Go get a real job with a real paycheck. If you don't have the education, borrow the money and get one. Guys come on here and they ask this question a 1000 times and the solution is actually pretty straightforward. You are probably a young guy with your whole life ahead of you. That's a long time. Stop, take a breather and do this right. If you lack the pedigree, please, go back to school and get it. It's not that hard and you will be thankful for the next 40 years that every time you fall (and you will), you will have that degree to lift you back up.
If you have a degree but it's not quantitative in nature, go back to school and fix that. No firm is going to "hire" you without that. Don't listen to these guys that say "I know a guy who knows a guy who knows a guy that just went into firm XYZ and got a trading job. Hell I went to high school with a guy who was a Heisman candidate and played football in the NFL. I wouldn't recommend that either. Just do this right. This question comes up at least once a week on this forum.
No one is going to pay you to lose their money. NO ONE. This will be the best advice you ever get, so take it.
Let me blunt, and help you as many others have helped me in the past.
1) Have you been consistently profitable with real money over the last six months? Can this continue?
2) If so, then can you view your balance six months ago, and today and tell someone the exact percentage gain?
3) If #1, then how much risk to your account equity did you put on to achieve those gains? Was it reasonable risk?
Don't BS yourself into thinking you need more money to be successful in trading, or to properly execute your edge... either you made money, or you didn't. If you didn't, then be willing to face that reality head on and don't make any excuses for it.
If you simply need more trading capital to live off the trading income, then that is a different problem, and one that should be easily resolved provided criteria #1 was met.
If you want further help, I suggest publicly answering the three questions I posed to you.... if not at least look yourself in the mirror and answer them.
Very well said. This post should be required reading.
Maverick is 100% dead nuts on.
1. Prop firms are typically all about turnover and the collection of fees/haircuts. Profit splits are always welcome but are not required for a prop firm to derive income from a trader who is at least "covering costs". If a firm is collecting a healthy monthly desk fee plus let's say 10 cents/RT overage they could conceivably make several thousand dollars per month on a trader who is just "breaking even". True story: I recently had a Skype conversation with a prop trader out of Singapore. Major firm with instant name recognition very well known in London, Singapore, and Sydney. His trade is the ES vs NQ spread. He had to be flat at the end of the day, and the firm's max position size allotted to him was 6x8 as I recall at the time. His dilemma was that flipping trades and getting flat made it very difficult to stay with an obvious longer term trend during his market (office/arcade hours) and of course trying to trade around market corrections and consolidations. He was just gutshot that he couldn't carry even a small core position overnight to trade around. When I looked up the daily CME intramarket SPAN margin requirements for his max position in terms of initial overnight spread margin ( about $3K as I recall ) he just flipped. Went apeshit crazy. Like holy fuck, he could easily be doing that himself.
2. In the current reality, it's going to take a quantitative science background to get hired as a trading assistant or associate or an analyst. Your foot in the door is a hardcore BS - preferably an MS, at the minimum. It's not right or wrong - it's just what they want these days. Even for running spreadsheets or babysitting a trader's program overnight or fetching Starbucks - that's what all the firm principals think they need. It is what it is. The good news, and the genesis of Maverick's thesis, is that the particular educational core will serve you quite well for the remainder of your lifetime - whether trading and financial markets are involved or not.
3. Yes, do it right fucking now. The markets are not going away and technology is not going away. All trading firms are shitcanning resumes and inquiries from the B.A.'s looking for entry level positions and old-school point-and-click mouse scalpers upon arrival.
Thanks, Mav. Absofuckinglutely true.
1. Prop firms are typically all about turnover and the collection of fees/haircuts. Profit splits are always welcome but are not required for a prop firm to derive income from a trader who is at least "covering costs". If a firm is collecting a healthy monthly desk fee plus let's say 10 cents/RT overage they could conceivably make several thousand dollars per month on a trader who is just "breaking even". True story: I recently had a Skype conversation with a prop trader out of Singapore. Major firm with instant name recognition very well known in London, Singapore, and Sydney. His trade is the ES vs NQ spread. He had to be flat at the end of the day, and the firm's max position size allotted to him was 6x8 as I recall at the time. His dilemma was that flipping trades and getting flat made it very difficult to stay with an obvious longer term trend during his market (office/arcade hours) and of course trying to trade around market corrections and consolidations. He was just gutshot that he couldn't carry even a small core position overnight to trade around. When I looked up the daily CME intramarket SPAN margin requirements for his max position in terms of initial overnight spread margin ( about $3K as I recall ) he just flipped. Went apeshit crazy. Like holy fuck, he could easily be doing that himself.
2. In the current reality, it's going to take a quantitative science background to get hired as a trading assistant or associate or an analyst. Your foot in the door is a hardcore BS - preferably an MS, at the minimum. It's not right or wrong - it's just what they want these days. Even for running spreadsheets or babysitting a trader's program overnight or fetching Starbucks - that's what all the firm principals think they need. It is what it is. The good news, and the genesis of Maverick's thesis, is that the particular educational core will serve you quite well for the remainder of your lifetime - whether trading and financial markets are involved or not.
3. Yes, do it right fucking now. The markets are not going away and technology is not going away. All trading firms are shitcanning resumes and inquiries from the B.A.'s looking for entry level positions and old-school point-and-click mouse scalpers upon arrival.
Thanks, Mav. Absofuckinglutely true.