How do Prop Firms Prevent a Trader from Blowing an Account?

N

newwer

I'm funding a few traders right now. Currently with IB trading futures. My problem is there really is no way for me to set a hard loss limit each day. With IB I can limit size per account but that's it. Considering there are so many trading firms out there I'm sure there are brokers and platforms that offer this functionality since it is essential for a prop firm. Having blown a few accounts myself throughout my career its my biggest fear for my traders.
So far from my research I know rithmic as an auto-liquidate feature but it is set only at the broker level and there is a fee each time its activated. I would like to be able to set it myself for all my sub accounts. Any platform provides this feature? How do prop firm's manage risk?
 
you need to use TT - Trading Technologies has risk control with open positions and auto liquidate per trader

move away from IB, if you do some volume they are way too expensive.
 
newwer said:
I'm funding a few traders right now. Currently with IB trading futures. My problem is there really is no way for me to set a hard loss limit each day. With IB I can limit size per account but that's it. Considering there are so many trading firms out there I'm sure there are brokers and platforms that offer this functionality since it is essential for a prop firm. Having blown a few accounts myself throughout my career its my biggest fear for my traders.
So far from my research I know rithmic as an auto-liquidate feature but it is set only at the broker level and there is a fee each time its activated. I would like to be able to set it myself for all my sub accounts. Any platform provides this feature? How do prop firm's manage risk?
More...

In the end, if you are hiring traders, you need to watch them. We can set max loss limits per day, but that does not auto liquidate them, just prevents new opening positions. If you won't watch, don't do it.
 
Robert Morse said:
In the end, if you are hiring traders, you need to watch them. We can set max loss limits per day, but that does not auto liquidate them, just prevents new opening positions. If you won't watch, don't do it.
More...
re:auto liquidate
prior post above says differently. please explain.
 
Robert Morse said:
What are you referring to?
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"- Trading Technologies has risk control with open positions and auto liquidate per trader "
vs. "We can set max loss limits per day, but that does not auto liquidate them We can set max loss limits per day, but that does not auto liquidate them"
 
zdreg said:
"- Trading Technologies has risk control with open positions and auto liquidate per trader "
vs. "We can set max loss limits per day, but that does not auto liquidate them We can set max loss limits per day, but that does not auto liquidate them"
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OK. Well, we offer TT but do not have anyone using it. I'll let the TT rep confirm and now I'll change my comment to be more clear.

IN MY OPINION, if you are hiring traders, you need to watch them. That simple. It is not the same as hiring a registred CTA that has disclosure docs and needs to follow their strategy. You can't depend on your software to be a risk manager. It is your money. You need to monitor the traders you hire.
 
newwer said:
I'm funding a few traders right now. Currently with IB trading futures. My problem is there really is no way for me to set a hard loss limit each day. With IB I can limit size per account but that's it. Considering there are so many trading firms out there I'm sure there are brokers and platforms that offer this functionality since it is essential for a prop firm. Having blown a few accounts myself throughout my career its my biggest fear for my traders.
So far from my research I know rithmic as an auto-liquidate feature but it is set only at the broker level and there is a fee each time its activated. I would like to be able to set it myself for all my sub accounts. Any platform provides this feature? How do prop firm's manage risk?
More...

The TT platform from Trading Technologies includes Credit Loss Adjustment Settings. These included automated actions to take on an account when its credit loss percentage is breached:

-Disable trading
-Disable trading and delete working orders
-Disable trading, delete working orders, and close open positions (auto-liquidate)

clos.png


You may read more about this feature here: https://library.tradingtechnologies.com/user-setup/rl-account-auto-liquidation.html

Message me your contact info if you'd like a TT rep to contact you.
 
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