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how would one even begin to start a prop firm
- Thread starter TIMMY57
- Start date
Quote from TM_Direct:
First things first....When you say "firm" do you mean your own FINRA registered firm or do you mean you want to have an LLC that trades in an office somewhere and you pay the rent and take the profits and losses?
Most likely talking about LLC model, FINRA route would be WAY to much work....
umm... don't forget that if you open a swift or title it's not a 50/50 split between you and trader. head office will take a nice chunk so it's more like 50/25/25 as far as I know
and you'll be lucky to have traders making 2-3K after a few months... or even years. a number of traders been trading for 2+ years at my place still breaking even or losing. don't know why they continue....
and you'll be lucky to have traders making 2-3K after a few months... or even years. a number of traders been trading for 2+ years at my place still breaking even or losing. don't know why they continue....
Quote from Don Bright:
Just a comment...$2000 per day, but cutting losses at $50 bucks.... a bit of a tough set of parameters in my opinion. Also, if you're making $2k per day, why bother with overhead etc., just duplicate what you're doing in different stocks, pay a small salary or something (as many of our people do).
FWIW,
Don
Don I completely agree with you, and no two ways about the salary part either. And yes $50 is quite a tough criteria not just because of the limited scope for traders to play n learn but also the possibility of damage that can happen to a traders psychology.
Though that is swifts method (in the hq for sure). Of course there are ways to increase the limits on the basis of past performance(3-5days prior to be precise) etc.
As for the person who mentioned about 2-4 newbie traders not being able to make 2-3k total using your successful strategy/style/training skills basically would only prove 1 thing, you(the person starting the business/franchise) do not have skill to teach something you know works and have not been able to teach your strategy/style at all.
Of course if I had to follow the same thing I would need to have some serious non-compete agreements protecting my interests.
In all honesty if you intend to teach your strategy etc. I would go in the direction of what Don mentioned.
But to start your own floor/franchise you should be a good trainer and mentor, i.e. be a true teacher/guru (not the current trend of the use of that word but the literal meaning).
From the first day that I entered an educational institution as a toddler till date I have had over a 100 educators/professors etc. but in true form I would give anyone leaving 3 the title of a teacher.
Starting a prop shop is not(only) a business of investing/trading the markets its is a business of investing in people and it can be extremely expensive, if you taught well you will get the returns else you will have a whole lot of traders who will be either in a loss 2+ years in or just breaking even.
Though again breaking even is yet another business model. There are the added benifits for that too.
And I do not intend to explain the last statement, if I would have been teaching you to swim this would be the part where I would teach you all the basics and leave your hand in the deep end so that you could analyze what to do and do it.