Going for prop money

There is nothing wrong with prop trading, even if they are opening shops in 3rd world countries and no, it is not dead. lol. However, many of the "methods" used by prop shops are are no longer relavent or profitable. The problem with these shops is that they "taught" traders ONE way to make money quickly and once guys started making money that way, they never attempted to learn anything else. When markets change, loopholes close, and rules change, traders need to adapt as well.

A good trader can make money in ANY market at ANY time using many different methods. A good trader must continue to evolve, to learn new things, to experience different markets. And the truth of the matter is, the majority of traders do not fit in this category. Especially ones who are "trainers". If a guy knows so much about how to trade, why would he want to tell you? Why would he waste his time when he could be making a tidy bundle in the market? Answer: because he can't take money from the market, he can only take it from you!

And if you're tryin to find a mentor at one of these shops, my advice is this: find the quietest guy in the place as he is the one who does the best.

Good luck
 
Quote from optioncoach:

I still do not get it, you said you quit your job to do this and your profits goal is $25 a day for now. I am curious as to whether they are paying you a salary in the meantime or how are you making money while trading these small lots.
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The apprenticeship program sets a number of milestones which ostensibly demonstrate our ability to handle the firm's money responsibly. As we meet the milestones, our buying power and personal freedom grows. When we reach our final milestone, we will take home a percentage of the profits we generate for the firm. Until then, no money for us.


In the meantime, I have savings which I am working my way through. I have paid off my condo and don't have any kids, so this seems like a good opportunity to try trading full time.
 
Quote from AAAintheBeltway:

Certainly my reaction as well. Can the "coach" show you anyone in the office who is taking home any real money trading this way?
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Trading for credits? Sounds like a hard way to make money to me. Even if it were possible, it's not something I'm pursuing actively.

A friend and I are working on a couple strategies together, but we'll need to have access to more stocks first. To do that, I need to jump through these hoops. Only then will my purchasing power be raised and the stocks I can trade opened. And, as they say, when life gives you lemons, make a strategy that generates a pre-set minimum return based on the small basket of stocks you are given.
 
Quote from hilojack:

Get out now while you can and find a firm that will actually teach you something about market fundamentals or technicals or tape reading or anything else. What would happen if they eliminated those ECN rebates? You'd be out of a job with NO market skills whatsoever. Just my .002...
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*shrug*

There's another prop firm in my neighbourhood which offers training, but they charge the same price for schmoes off the street as to people in their firm, so I figured I'd sign up for their classes if I wasn't meeting my internal targets.


If this doesn't work out, I'm not in a bad position. I've had a chance to try something that has been occupying my thoughts, and I can always return to my previous profession. The money there is good, I'm sure I can find work, and it is somewhat interesting.


I can respect the fact that this is a hard profession to break into, but it can be done. I am among the best in my group, making continual progress, meeting my goals, and have only been at it a couple of weeks. Given that, I'm not sure where this level of pessimism is coming from. Is it that you don't like the way I met my goals or something? I'm still learning and trying out new things, so I find it encouraging that I'm able to identify new strategies and make them pay off, even if they aren't going to make me rich.
 
Quote from hilojack:

There is nothing wrong with prop trading, even if they are opening shops in 3rd world countries and no, it is not dead. lol. However, many of the "methods" used by prop shops are are no longer relavent or profitable. The problem with these shops is that they "taught" traders ONE way to make money quickly and once guys started making money that way, they never attempted to learn anything else. When markets change, loopholes close, and rules change, traders need to adapt as well.

A good trader can make money in ANY market at ANY time using many different methods. A good trader must continue to evolve, to learn new things, to experience different markets. And the truth of the matter is, the majority of traders do not fit in this category. Especially ones who are "trainers". If a guy knows so much about how to trade, why would he want to tell you? Why would he waste his time when he could be making a tidy bundle in the market? Answer: because he can't take money from the market, he can only take it from you!

And if you're tryin to find a mentor at one of these shops, my advice is this: find the quietest guy in the place as he is the one who does the best.

Good luck
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The problem is most PROP SHOPS teach NOTHING, but how to execute a trade, with the software.

How many times have you heard "SINK or SWIM" in this industry.

Its another thing if you happen to already know how to trade or study on your own, or have a mentor.

The other thing against prop shops, is the leverage available in other markets.
 
Quote from foible:

*shrug*

Given that, I'm not sure where this level of pessimism is coming from. Is it that you don't like the way I met my goals or something? .
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I'm pretty sure its not pessimissim you are recieving here.

Its sort of like, if you saw someone trying to learn to walk, but is walking like a duck , You'd tell him he's doing it wrong.

Its still walking, He can get to places walking like a duck, but its still stupid to be walking like a duck.

Which makes people tell you:

rebate trading is stupid. Learn to trade the right way. BRUT or whoever did not invent rebate for traders to profit from them, they made it so they can get more people trading on their systems and pay commissions like good little work bunnies.




:)
 
Wow, Coolweb and I agree on something!

Learn to trade, based on technicals or tape reading or pure price action or news etc... Shaving fractions of a penny on something like LU or NT or whatever you guys do that on is not going to train you make it in the real world of trading.
And I am not saying that guys dont make great money doing that form of trading but if, and when, the rebate game ends, you will want to know how to really trade.

Quote from coolweb:

I'm pretty sure its not pessimissim you are recieving here.

Its sort of like, if you saw someone trying to learn to walk, but is walking like a duck , You'd tell him he's doing it wrong.

Its still walking, He can get to places walking like a duck, but its still stupid to be walking like a duck.

Which makes people tell you:

rebate trading is stupid. Learn to trade the right way. BRUT or whoever did not invent rebate for traders to profit from them, they made it so they can get more people trading on their systems and pay commissions like good little work bunnies.




:)
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For the record, I agree that trading for credits is a crap strategy. Sure, I can make ten or twenty bucks in a day, but big whoop.

I also agree that the zero volatility stocks that they have me trading teach me about the keystrokes and ECNs, but give me crap skills for the long term.

I've been saying all that, just as I've been saying that I don't have a whole lot of choice. When all you have is LU, NT, and EWJ, trying to grab the odd penny, or skin the odd credit is the only way to meet the profit targets that have been set.


Bear in mind that this is very frustrating for me, but I'm just trying to adapt and play the game that has been presented. I've been trading for two weeks and only choosing these crap stocks and crap strategies because I want to complete my ticky boxes as soon as possible.

If you think it's painful to watch someone grind out pocket change in BRUT credits, think of how painful it is to actually grind out that pocket change!



So, if you don't mind, please lay off the credits and shaves discussion for a couple weeks. I agree, you agree, we all agree that trading for credits is a good way to earn very little money.
 
Having read through this thread from your first post to your most recent I think there are a couple of points to be made.
First, seems to me that you , like a lot of people I have seen come and go in the prop business seemed to approach your decision to enter this business complete ignorance to what is required to be successful. Noobs in this bus.seem to think that because there are a successful traders out there who make 'very good' money that all they need to do is join a firm and then be brought in to the 'inner circle' of the trading illuminate, who will then dispense all the deep market secrets to them in a nice concise 120 page journal which they can then read, make a month's worth of trades using the clear strategies outlined and be skyrocketing towards goal of unbelievable riches. Perhaps this does not completely and accurately describe your perspective but you get the general idea. And I am sure that you find the 'training' that you are enduring oh so painful. Well here's some perspective for you. Trading is one of the most challenging things you'll ever undertake! And trading for a living is not a job that you learn with a couple of weeks of training like bolting wheels on a car on an assembly line. It is a profession my friend that takes years to be qualified at and develop the skills to be considered in the top half of successful practitioners.
There is no question that what your particular firm is putting you through right now can seem tedious. But the problem lies not in the exercise but in the participant! I mean holy shit, what do you expect, a few technical analysis lessons on support and resistance, some fibonacci s, and some funky indicators and then be turned loose on GOOG? You need to walk before you run. Take something away from the exercises you are doing now. Learn from it and learn it cold! It should stimulate you to look deeper, things a simple as knowing actual credit value and how they differ from product to product, market to market. Look I sure you would agree becoming a brain surgeon is a profession, not a job, and it takes many years. But do you think that a surgeon can dismiss sewing as monkey work? How good would a surgeon be if he couldn't use a needle and thread?

The training and milestones you are going through now are designed to teach you things, patience, success, persistence, and if you have talent you'll be able to quickly achieve them and move on to the next step. You need to have the ability to look beyond what is directly in front of you, and this is one of the most important skills you will ever develop as a trader!

To your benefit my friend it seems as I progressed through your posts that perhaps at least a little of that may be sinking in.

Cheers,

AM
 
An unfortunately interesting day. What a rollercoaster: down $6, up $30, back to +$6, then slowly crawled back up to $27 to complete the second of my "25s". While I would love to smooth out this curve, at least it ended up being "good enough" at the end, and I only need one more day like this to complete the milestone.

I think I need to do some work on position sizing. Some stocks, like CDE and L can move slowly in one direction and give me the time to step onto them and enjoy the ride. The only thing is that in the small-scale, the ride can be choppy, moving up and down a cent or two. I suspect it would be a good idea to start with a smaller number of shares and then add to my position when I have confirmed a move, and set some wider stoplosses. We've been taught that 0.02/share is the maximum that we should take, which often has me panicing out after the stock moves only one cent away for fear of a two cent loss. I'm not sure how realistic that is.

Does anyone have any tips on how they vary their position sizing with volatility, confirmation, and confidence?



I'm also finding a disturbing tendency to want to catch falling knives. When a stock is down or up, I keep imagining it will stop and reverse and I keep wanting to call a top or bottom. It's dangerous and gets me hurt - maybe best to wait for a confirmed move or some obvious resistance/support points.


Anyway, the figures:
#shares: 19400
#trades: 51
adj net: $27.2196
gross: $27.0600
 
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