Quote from MZG:
So I had this interview with summit trading capital today.
They used to operate under the name Platinum plus. They did not bather to change the signs in the building.
We had this group interview with a guy named Oscar. He started by introducing himself and said that he has 15 years of trading experience and that he sees more than 90 percent of traders fail. He said that there is no way to find a good trader except by giving everybody a chance. He stressed that 90% of us will fail. And while most people feel the pressure when they lose capital and leave after 2 months, he will give the capital to each trader, and they should start their own way. He said the thing he hates is sharing ideas. Rather everyone should do his method. However it should be SWING. They use sterling platform.
Trading is with 300,000 for each trader and minimum 10,000 shares in USA equities only. Yes minimum is 10,000 shares. When asked by some one about FX, he replied the answer to all your questions is NO because it should be US equities only. The lose minimum should be 2000$. No overnight positions.
Minimum commitment is 6 months. Split is 50/50 with 3 dollars commission on 1000 shares and no desk or connection or any kind of fees.
Everything moves through a black box. He said that some of the trades my not pass if the black box rejected it. However, they will be counted for you as usually P/L. which means if you made a trade and the black box rejected it, then it was a profit, it will still be reported to you as a profit and you will be paid for it. Payment is on 25th of the next month and is all the profits minus loses minus commission minus their 50%.
The funny thing was those two people, someone with 5 years experience and other with 13 years. They said we told you that in the resume, he still apologized and asked them to leave.
NOW MY QUESTION IS what is it in it for him? WHY he will take people with NO EXPEREINCE give them training and 300,000$ for each knowing that most will lose the money. CAN day trading be that profitable to rent a trading floor in wall street with 6 full time working staff (non trader)? What he will gain?
Think about what you said above:
90% will fail. Each newbie is given $300k to trade. Commitment is 6 months. Minimum is 10,000 shares.
If they start with 100 students on Jan 1, 2011, by June 30th, 2011 the firm will have lost $27 million of their $ capital. (90% failure rate is 90 students multiplied by the $300k they each lost)
How can the firm stay in business?
As others have mentioned, the black box is a simulator! For the firm, it is heads they win, tails the newbie loses! With the black box simulator, the 90% of newbies who flunk out will pay the commissions to the firm. ( 10,000 shares times 100 newbies x 6 months is a commission profit of about $720k for the firm) This is pure profit for the firm since their capital was never at risk in the first place. With this profit from the flunked out newbies, they can pay the 10% of the newbies that are marginally profitable after deduction of commissions.
The problem is that once the 10% profitable newbies figure out that the pasture is greener someplace else, they will go to a real shop and now the firm has to recruit another 100 newbies....Thats why the firm asked the traders with 5 and 13 years to leave. They would have figured out the black box simulator in 2 seconds.
The best advice was given by PropTraderMTL. There is no magic bullet to make a newbie a seasoned and profitable trader.
It takes thousand of hours of screen time, lots of self study, appropriate risk management per trade/portfolio. Even then most folks blow up 1 or 2 accounts before they get it, if ever.
Good luck, but don't believe everything you hear. Most of the time it is too good to be true.
