How do I break in with a legit prop firm?

[ScalperJoe]

I also got .30/1000 and 80% which I thought was a good deal so it had its benefits.

Fees (fixed cost and variable cost) add up when you daytrade, especially when you're licensed trader paying "professional" fees and jumping from stock to stock on a daily basis.

The other issue is capitalization. $5k is an undercapitalized account. If you were getting 20x bp, or $100k in firm capital to trade, a 1% movement creates a 20% swing in your capital. MOST traders that come in with $5k or thereabouts will blow up their account before the lock up expires. You actually came out ahead, but gave up lots of profits due to the fees.

One option is to trade futures, and limit yourself to watching just a few products. (ES/CL/GC/6E, etc.). You can open a demo account through several futures firms (AMP, Mirus, etc.). Try that route for a month, and then open your own futures account, or go through a TopStepTrader combine if you think you can trade within their parameters in order to get a funded account, and scale up to size.

Another option is to show your prior track record from your prop reports at WTS to friends and family, and open up a "Friends And Family" account with TDAmeritrade or IB. Use their capital to get leverage, and negotiate your fees. There is maximum number of sub-accounts you can have without becoming an RIA (you can check with your state regulator or SEC, or just ask the firm).

A third option is to study for your Series 65 license (you do not require a sponsor firm). Then you can register the license and form your own advisory firm, where you can raise capital from outside investors, and then trade a larger account.

If your goal is to trade, then you first need access to EQUITY. It's the EQUITY that matters, not the buying power. The beauty of futures is you don't need a lot of equity, unlike trading stocks, where you will need obviously a lot more than 5k.

Hope that helps.

 

[ScalperJoe]

...I have no real work experience where I had to get up and go to work every morning.

Ya, this makes it difficult to get a trading "job" as most ads require programming skills and relevant work experience. Many also want advanced degrees.

Search this site as a good resource, and you will notice very stringent qualifications to obtain a "real job" at a trading firm.

http://www.efinancialcareers.com/

 

[kmgilroy89]

Ya, this makes it difficult to get a trading "job" as most ads require programming skills and relevant work experience. Many also want advanced degrees.

Search this site as a good resource, and you will notice very stringent qualifications to obtain a "real job" at a trading firm.

http://www.efinancialcareers.com/

Yes, but everybody has to start somewhere. I've applied for internships in the past, but many of them only want current undergrads. I've noticed that I kind of missed the boat, because many jobs require at least some internship experience and to get an internship you need to be in school. I really don't want to go for a PhD. I got into UCLA's MFE program, but ultimately decided against it, because it would have cost me $80,000. I don't want to go in debt and they filled more risk type of jobs than trading jobs. I didn't think it was a gamble worth taking since all I wanted to be was a trader.

 

[tom_czr]

to kmgilroy89:
With $5K of your own capital it is not possible to take you seriously.

U need to show that u can make it on your own, so you should find your investors/sponsors, borrow money, or make money somewhere and increase your trading account to at least $50K, or maybe $200K.
It is easy to make money as real estate broker, insurance or mortgage broker, or even house keeper, car mechanic or car parts trader, whatever u like...

 

[MrN]

"I didn't think it was a gamble worth taking since all I wanted to be was a trader."

There is not allot of logic to this statement. Given your circumstances, trying to be hired as a trader is a gamble, and a bad one at that. Playing poker for a living, which works .1% of the time or less, is even worse. Getting a masters at a very prestigious program and then a well paying corporate job in a related field for 10 years would be a very good step, in my opinion.

 

[kmgilroy89]

"I didn't think it was a gamble worth taking since all I wanted to be was a trader."

There is not allot of logic to this statement. Given your circumstances, trying to be hired as a trader is a gamble, and a bad one at that. Playing poker for a living, which works .1% of the time or less, is even worse. Getting a masters at a very prestigious program and then a well paying corporate job in a related field for 10 years would be a very good step, in my opinion.

I estimate I could survive about 2 years living on my own in Las Vegas while breaking even before needing to get a job. I have a particular poker game I plan to grind. I will also put some money towards an IB account while I do this, but I see poker as more of a sure thing. Believe it or not, small to mid stakes live poker is much, much easier to beat than trying to find a consistent trading methodology. The key to being a good poker player is similar to that of being a good trader, emotionally being able to handle variance. Like trading, proper bankroll management is very important both for avoiding risk of ruin and the psychological aspect.

 

[MrN]

Winning at mid-stakes poker and similar are easy for a bright decent player untill you get a run of bad luck and rent is due, your health in any way deteriorates, personal life blows up, etc, among other things. My only point is there is no reason to be in any rush to immediately trade. Be patient and build fundamentals like programing, analysis, edge creation, methodology for disipline, trading with your own account while employed, build wealth - most often the long way ends up being the short cut, unless one hits a huge run of good luck or an insane market that they can latch onto (which everyone believes is going to be them). Then 9/10 that lucky guy spends to much and loses it. In other words the long way is what works for people who can't get in through the "front door".

 

[kmgilroy89]

Winning at mid-stakes poker and similar are easy for a bright decent player untill you get a run of bad luck and rent is due, your health in any way deteriorates, personal life blows up, etc, among other things. My only point is there is no reason to be in any rush to immediately trade. Be patient and build fundamentals like programing, analysis, edge creation, methodology for disipline, trading with your own account while employed, build wealth - most often the long way ends up being the short cut, unless one hits a huge run of good luck or an insane market that they can latch onto (which everyone believes is going to be them). Then 9/10 that lucky guy spends to much and loses it. In other words the long way is what works for people who can't get in through the "front door".

Noted, but I'm not one of those who believes I'm going to hit the jackpot. I either risk very small amounts figuring things out or want statistical evidence that something is +EV. I also want that statistical evidence to be backed by some type of logical rationale. Then I like to have a certain risk that fluctuates based on my account size. I would update my allowable trade size daily depending on my account balance. I don't believe in "one time" or "it's my time". When things aren't going well I tend to tighten up rather try to make up, because in my opinion it's better to miss a few opportunities and be a little timid while you figure out if it's bad luck or if you're doing something wrong than it is to try and double down on mistakes.

 

[garachen]

Yes, but everybody has to start somewhere. I've applied for internships in the past, but many of them only want current undergrads. I've noticed that I kind of missed the boat, because many jobs require at least some internship experience and to get an internship you need to be in school. I really don't want to go for a PhD. I got into UCLA's MFE program, but ultimately decided against it, because it would have cost me $80,000. I don't want to go in debt and they filled more risk type of jobs than trading jobs. I didn't think it was a gamble worth taking since all I wanted to be was a trader.

I think that was a wise move. I'm in CA and even I don't hire from UCLA or Berkeley's program. It would probably have been $80,000 down the drain and not easily recouped. I did the UChicago program about 15 years ago - I think it was 30K back then - and I can vouch for their job conversion ratio given the right aptitude. At least all my classmates eventually found a job. Now, a lot of students need a job + VISA which is a tougher proposition.

I know at least 4 pro poker players and it's not a demographic I've sought out so I actually think your odds there are pretty good. One of them took a pretty big pay cut going from poker to GETCO. Your most valuable commodity right now it your time. There are limited years here to put you on a path towards your goal. Pro poker might or might not be part of that path. Failing at poker wouldn't look good.

If you want, I could run a fake interview with you. And since you don't know who I am (and the interview is fake) I'd tell you directly what the problems are without the usual legal issues that come with telling people the truth.

 

[kmgilroy89]

I think that was a wise move. I'm in CA and even I don't hire from UCLA or Berkeley's program. It would probably have been $80,000 down the drain and not easily recouped. I did the UChicago program about 15 years ago - I think it was 30K back then - and I can vouch for their job conversion ratio given the right aptitude. At least all my classmates eventually found a job. Now, a lot of students need a job + VISA which is a tougher proposition.

I know at least 4 pro poker players and it's not a demographic I've sought out so I actually think your odds there are pretty good. One of them took a pretty big pay cut going from poker to GETCO. Your most valuable commodity right now it your time. There are limited years here to put you on a path towards your goal. Pro poker might or might not be part of that path. Failing at poker wouldn't look good.

If you want, I could run a fake interview with you. And since you don't know who I am (and the interview is fake) I'd tell you directly what the problems are without the usual legal issues that come with telling people the truth.

I'd appreciate that, thanks. How do you want to do it? Over the phone? Skype?