how to blow up a prop firm acc in 2 days

Clubber Lang said:
A $2,000 loss blew up your account?

You were vastly undercapitalized to begin with. Be glad it only took 2 days wasted for the inevitable to happen.

BTW- What kind of desperate clown "prop" firm takes on guys with only 2k capital? And who let's a newbie trade 300,000 shares on his second day trading?

Please name the firm so we can bash them and publicly out them as an amateur hour bucket shop (If for no other reason than it might save someone else time and money).
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g6

I was trading 4k shares of FNMA at a time and making profits, however my platform did not display the correct commission number and I ended up paying 50 bucks round trip for commission and ECN fees... didnt know until later that night when they compiled the report
 
Compulsive said:
Trade futures
1st goal - have a risk established automatically
Trade to break-even - When I see $30-40 I place stops +1 tick from entry
Move stops to cover profits as market continues
I get stopped out many times, but at the end of the day it is profitable

Also place the DOM in ticks or points never in dollars

57 Trades
114 RT
$3.09 per RT (all fees)

+$1,207.38
-$352.56 commission

+$855.12
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I think when I start up again ill trade like 100 shares of some large cap stock at a time... I was trading small caps and those take couple thousand shares a time to trade
 
bearmace said:
g6

I was trading 4k shares of FNMA at a time and making profits, however my platform did not display the correct commission number and I ended up paying 50 bucks round trip for commission and ECN fees... didnt know until later that night when they compiled the report
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Yikes! $50 round trip is stealing.

I paid that back in the mid 90's at All-Tech and that was retail. Even today I pay close to just 1/2 cent per share retail.

If your firm had any credibility they'd either reimburse you about $40 of the $50/trade and/or admit their mistake if, in fact, the trading platform was displaying the wrong commission each time you made a trade. Sure, we all accept that the software may have glitches at times when we sign agreements but to have a problem with commissions as significant as you experienced is weird. What was your understanding on commissions prior to starting? Heck, even retail in the mid 90's All-Tech initially let us trade for $5 each way as we got our feet wet.
 
DHOHHI said:
Yikes! $50 round trip is stealing.

I paid that back in the mid 90's at All-Tech and that was retail. Even today I pay close to just 1/2 cent per share retail.

If your firm had any credibility they'd either reimburse you about $40 of the $50/trade and/or admit their mistake if, in fact, the trading platform was displaying the wrong commission each time you made a trade. Sure, we all accept that the software may have glitches at times when we sign agreements but to have a problem with commissions as significant as you experienced is weird. What was your understanding on commissions prior to starting? Heck, even retail in the mid 90's All-Tech initially let us trade for $5 each way as we got our feet wet.
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Even if he signs the agreement that says commissions are .005c per share?. Also using market orders on ARCA for each entry and exit also contributed to his blow up.
Going into each trade he knows that .008 (.005 +.003 for arca) are his costs per trade, which is .016 cents a share, yet he continues to scalp for small profit targets.

I feel like the OP should take responsibility for the terms that he agreed to when opening the account. If for some reason the firm quoted him .0025c per share, and at the end of the day he realized that they were charging him .005, then yes he has a valid argument. But this person sees his updated PnL after the first day (with omissions) and then turns around on the second day and trades the exact same strategy with small profit targets, after the first day he should know that his commissions are slightly higher then he would like them, and halfway throughout the day he can see that he is at 80k shares traded, even if the commissions are not updated in the PnL, he could have done some quick math to see, hey I better watch myself. He did not take any responsibility for that and kept trading and trading.

If he thought that .005 was too much and possibly could lose his money with the strategy he planned on using, why did he open the account?
 
Clint said:
Even if he signs the agreement that says commissions are .005c per share?. Also using market orders on ARCA for each entry and exit also contributed to his blow up.
Going into each trade he knows that .008 (.005 +.003 for arca) are his costs per trade, which is .016 cents a share, yet he continues to scalp for small profit targets.

I feel like the OP should take responsibility for the terms that he agreed to when opening the account. If for some reason the firm quoted him .0025c per share, and at the end of the day he realized that they were charging him .005, then yes he has a valid argument. But this person sees his updated PnL after the first day (with omissions) and then turns around on the second day and trades the exact same strategy with small profit targets, after the first day he should know that his commissions are slightly higher then he would like them, and halfway throughout the day he can see that he is at 80k shares traded, even if the commissions are not updated in the PnL, he could have done some quick math to see, hey I better watch myself. He did not take any responsibility for that and kept trading and trading.

If he thought that .005 was too much and possibly could lose his money with the strategy he planned on using, why did he open the account?
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I'd have never traded that large as far as # of shares the first few days regardless of how prepared or confident I was. And, as someone who trades retail, I didn't start until I had what I felt was sufficient capital ($90K back in 1996). Trying to go prop with such a small amount of $$$, as the OP did, puts a lot of pressure on them to succeed from day one.
 
Fortunately for you, you happened to be well capitalized. Not all of us (myself Included) have 90k to put into IB and start trading.

I know accomplished traders say you should be well capitalized. However, I don't believe it is necessary to have 90k, 50k, or even 25k as long as you have access to buying power.
Obviously starting with 2.5k you are risking a bigger portion of your account per trade, but if your system is well tested, which also includes factoring in commission costs that you have agreed to per share/per trade, whether they are Lightspeed, MB trading, Tradeking, Nonko, suretrader, JC trading group, WTS ...(you get my point), there is no reason why starting with 5 or 10k should hold you back. As long as you do not need the money to withdraw to pay daily expenses, because in theory, starting with 5k and risking 100-200 per trade is enough to net you a little bit of % return on that buy in. That is where the buying power of WTS, Nonko, comes in handy. Obviously Nonko charges more commissions then WTS, but that is the deal that has been proposed...and the Commisions of .005 per share should not make you blow up an account in 2 days.

I think we both agree on the same thing. The only reason I am sort of arguing against you is that in the post that I replied to, you seem to be saying that $50 round trip per trade was ludicrous and the firm should refund $40 of it. This part I can not agree with...the trader needs to take all responsibility for the fees that he has agreed to pay.

I am almost certain that he did not heed the advice of the person that set up his account. Or if none was given, he should have demanded ECN fee information and commisions information so that he can make a responsible decision on share sizing, stop loss, profit targets, to maximize his chance of not blowing up his account in 2 days.
 
Clint said:
I think we both agree on the same thing. The only reason I am sort of arguing against you is that in the post that I replied to, you seem to be saying that $50 round trip per trade was ludicrous and the firm should refund $40 of it. This part I can not agree with...the trader needs to take all responsibility for the fees that he has agreed to pay.

I am almost certain that he did not heed the advice of the person that set up his account. Or if none was given, he should have demanded ECN fee information and commisions information so that he can make a responsible decision on share sizing, stop loss, profit targets, to maximize his chance of not blowing up his account in 2 days.
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I wasn't saying he should get $40/trade back. I meant that if he in fact was told his commissions would be $x/trade then it should be that amount. I assume he understood ECN fees as well. Perhaps he didn't. Last, not sure if he was trading remote or in an office ... but IMO whoever ran the office or handled remote traders, especially newbies, should have, called/texted/emailed him to make sure he truly understood the total commission he would be paying. When I was in an office in the 90's the 2 guys who ran the office kept a close eye on new traders to make sure they traded small and didn't blow up early on.
 
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