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

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


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.
This is a really important skill.
More...

can you explain in a little more detail? what do you mean cross hedge for future traders?
 
gaussian said:
Actually yeah, it's relatively easy to get staked (the equivalent of a prop) if you've made your name in the tournament and cash circuits.



I would recommend following the policy every other prop does. Require them to post a minimum funding amount (say 15,000) and you will fund them up to whatever level you are comfortable with. You are providing leverage to them but their money is at first loss, and you cut them if they blow their posted funding.



Ahem A Man For Any Market.
More...


then why does someone join in his prop firm? he can find broker with 10-20X leverage on the market and bring him 100% profit.
 
i wonder why the op let his traders trade up to 20 contracts if they do not prove profitable, unless the op is very rich, in that case, he should have other best vehicle to invest his money.
 
New traders are not expected to make consistent profit.
You can't develop them. It's like you can't develop any college students to play NBA.
For traders to make consistent profit, they need both talent and long experiences.
Select traders who have longer than 10 years experiences, there may be 1/10 of them who can make consistent profit.
 
My guess is that the OP is looking to fuel a story -- either a journalist or a undergraduate looking to flesh out a paper. (Given the date, probably an Incomplete that needs to get off the agenda before the serious current-semester workload ramps up...) Good on 'em, for the imagination.

But the premises suck: you *funded* a floor, and *now* look for technique? Puh-lease. Oh, and you've got control of your risk management, do you? Yeahhhhh. No.

So, back to the chalkboard: erase everything and start over.
Define a set of markets.
Define a set of maneuvers within/between those markets.
Define floor-wide limits on holdings: hedge the firm.
Define traders' limits on holdings -- with blaring alarms for violations.
Prove that your firm-wide parameters will likely provide efficient returns to engaged capital.

THEN, GO FIND YOUR TRADERS.

That's as much as I'm going to say. And there's already too many solid posts on this thread. Go write your own paper.
 
MrMuppet said:
Almost all pro poker players are backed or staked by 3rd party investors...who is the equivalent of a "prop poker house"

Not all prop shops are a scam. There still are a couple of serious P/L firms out there.
I think you got confused over terminology...you meant arcades. Desk fee + first loss deposit...scam
More...

'almost all' perhaps an overstatement?

staking is different from a 'prop house'.... players staking each other to smooth out the volatility I guess... and still doesn't make sense for a winning player to look for a pure financial backer.... guy wins why would he want to lose part of the prize.

also prop firms obviously have conflict of interest.... get fresh meat off the street, churn some volume to get commission/order flow... this scenario is not in poker.
 
dozu888 said:
'almost all' perhaps an overstatement?

staking is different from a 'prop house'.... players staking each other to smooth out the volatility I guess... and still doesn't make sense for a winning player to look for a pure financial backer.... guy wins why would he want to lose part of the prize.

also prop firms obviously have conflict of interest.... get fresh meat off the street, churn some volume to get commission/order flow... this scenario is not in poker.
More...

You know little about poker.
 
You must log in or register to reply here.
Back
Top