If you had a prop firm, how would you develop traders?

[comagnum]

I just started funding 5 futures traders and the first week all five have lost money. I know that 95% of traders lose money but damn.

How do help these guys out?

Easy - take 1 of your traders & have them take inverse trades as the others, sized up at least 3x larger. Do this without letting the others know.

Amazing that anybody could even work at a prop shop averaging into losers. If ever I did that I would fire myself.

 

[newwer]

Are the traders experienced who come to you with an edge and verifiable track record?

No, all new to futures trading. Also 4 of them are in early 20s.
Some of them have experience in stocks but not really intraday.
One guy does delta hedging in options.

 

[fan27]

No, all new to futures trading. Also 4 of them are in early 20s.
Some of them have experience in stocks but not really intraday.
One guy does delta hedging in options.

Something is not adding up here. How could this possibly be a wise business venture? Unless you are sitting on a pile of money and are looking for some excitement, I just don't see why you would do this.

 

[newwer]

The 6th guy is on a demo and shows some promise.
1st day he makes 1300 trading the micros 150 RT.
Which got me thinking maybe there is two most likely ways to successful trading:
1 very high frequency: (100+ RT), trading somewhat like a market maker.
2 very low frequency: just 1 or 2 trades a day and maybe no trades. Wait for the rare fat pitch.

 

[El OchoCinco]

I would train them to churn and burn so I make money on their commissions over and over again.

 

[newwer]

Something is not adding up here. How could this possibly be a wise business venture? Unless you are sitting on a pile of money and are looking for some excitement, I just don't see why you would do this.

Is any new business venture wise? I don't think so. 90% of new businesses go bust. The ones that succeed rapidly iterate their way to success through trail and error. This is something I just wanted to try in an attempt to learn more about markets, trading, psychology.

 

[newwer]

Almost all pro poker players are backed or staked by 3rd party investors...who is the equivalent of a "prop poker house"

I forget his name but a legendary trader started off playing blackjack in casinos. He was funded by a mobster. After he won too much money and got banned from the casinos he started his hedge fund. What's his name?

 

[Overnight]

Is any new business venture wise? I don't think so. 90% of new businesses go bust. The ones that succeed rapidly iterate their way to success through trail and error. This is something I just wanted to try in an attempt to learn more about markets, trading, psychology.

I told you. 20 million in your account. That grants them 4 million each to make mistakes. 10 contracts maximum, let them swing.

Futures are no joke, man.

 

[Real Money]

I'm guessing that this guy is just looking for advice for his trading of futures.

100 RT in a day is nothing, and you should not use micros to trade like this.

High freq for a day trader is somebody who flips their exposure, is both long and short, and uses cross hedge to act like a market maker. This is called "working an average price" or legging into and out of cross hedged positions. This can help you size into a huge position.

Or it means that you trade size in and out during the day.

Either strategy could be (easily) hundreds of RT's.

Sometimes professional traders don't have a choice. They can't just 'get flat' and go home. Managing risk means trading around a position. This is a really important skill.

 

[fan27]

Is any new business venture wise? I don't think so. 90% of new businesses go bust. The ones that succeed rapidly iterate their way to success through trail and error. This is something I just wanted to try in an attempt to learn more about markets, trading, psychology.

Dude...you are not funding five traders. This thread is BS.