Is the average annual income of prop traders approx. £164,000?

[pinetboltz]

recently came across a table of stats in a published paper that lists the concrete income of traders in a London prop trading floor:
http://www.pnas.org/content/105/16/6167.full.pdf?sid=923de3de-1794-448b-be58-5019925c299b

it's somewhat dated, from 2007, but it gives the specific avg annual income of traders there, and given that it's published in a journal with peer-review, the stats seem more applicable to the general population than the avg rumor mill / anecdote, etc, which either gives the income at negative/0 (for strong believers of the strong form of Efficient markets hypothesis) or at $30+ million (for individual wizards plugging away in the Japanese futures markets).

on page 4 of the article, it says the avg age of traders in their sample is 27.5, with annual income around £164,000.

given that it's a limited sample on 1 trading floor, am wondering if the average numbers today are roughly comparable? (wage inflation prob not as much of a direct factor, as they seem to be locals who work on profit split, not as hired labor)

or has avg numbers come down with influx of algos? (perhaps range has gone up, with some traders figuring out how to game the algos and etf accumulation mechanisms)

compared to this published stat, how r the guys on ur trading floor doing?

 

[777]

Most prop traders never become profitable.

Few become seriously profitable and stay that way as trading situations change.

Most prop training is poor.

Office managers often misrepresent all of this and I have known a number who blew up trading, owed their firms money, and were working off their debts.

However, some prop traders, like Lescor, are the real deal and have done extremely well. Please realize those are rarely the people training new traders.

 

[jjcokeor]

Most prop traders never become profitable.

Few become seriously profitable and stay that way as trading situations change.

Most prop training is poor.

Office managers often misrepresent all of this and I have known a number who blew up trading, owed their firms money, and were working off their debts.

However, some prop traders, like Lescor, are the real deal and have done extremely well. Please realize those are rarely the people training new traders.

Tanks for your reply. I am from china. I do not konw Lescor .Could you tell me sth about him?
Or give me the link.

 

[777]

Tanks for your reply. I am from china. I do not konw Lescor .Could you tell me sth about him?
Or give me the link.

Put Lescor"s (Lescor) Elitetrader name in the search box on this site. He has many posts telling what he trades, how he trades, why he trades, who he is, where he trades- plus general philosophies.

Lescor has posts from 2001 before he developed his style through a hello post in 2017. You can go back in time and see his growth and evolving ideas.
________

A great general philosophy will not make you a winner all by itself because you must have "positive expectation" on your trades; however, I will offer one Lescor quote that is a good road map.

"The three goals of trading, in order of importance:

1. Protect your capital
2. Earn consistent returns
3. Earn large returns"

(One reason traders blow up is they often try to skip directly to #3.

Taking too much risk- even with an edge, or trading without positive expectation, are two of a number of good roads to the poor house.

If you can live by Lescor's first two rules, then as your account grows, #3 will naturally occur)

 

[777]

Put Lescor"s (Lescor) Elitetrader name in the search box on this site. He has many posts telling what he trades, how he trades, why he trades, who he is, where he trades- plus general philosophies.

Lescor has posts from 2001 before he developed his style through a hello post in 2017. You can go back in time and see his growth and evolving ideas.
________

A great general philosophy will not make you a winner all by itself because you must have "positive expectation" on your trades; however, I will offer one Lescor quote that is a good road map.

"The three goals of trading, in order of importance:

1. Protect your capital
2. Earn consistent returns
3. Earn large returns"

(One reason traders blow up is they often try to skip directly to #3.

Taking too much risk- even with an edge, or trading without positive expectation, are two of a number of good roads to the poor house.

If you can live by Lescor's first two rules, then as your account grows, #3 will naturally occur)

However..

At the end of the day, becoming close with a winning trader is usually the best try and I don't mean paying a hustler for a trading course. This is extremely hard. For obvious reasons, most can never do this.

Mentors-for-hire are often hustlers with good fronts who will charge thousands and try to keep you on the hook with lessons and maybe products.

The extremely high level of competition and things like slippage and fees/commissions make day trading a game most people will lose at.

Very smart people and very fast computers go to bed dreaming of ways to win.They go to bed dreaming of ways to take your money!

 

[jjcokeor]

Put Lescor"s (Lescor) Elitetrader name in the search box on this site. He has many posts telling what he trades, how he trades, why he trades, who he is, where he trades- plus general philosophies.

Lescor has posts from 2001 before he developed his style through a hello post in 2017. You can go back in time and see his growth and evolving ideas.
________

A great general philosophy will not make you a winner all by itself because you must have "positive expectation" on your trades; however, I will offer one Lescor quote that is a good road map.

"The three goals of trading, in order of importance:

1. Protect your capital
2. Earn consistent returns
3. Earn large returns"

(One reason traders blow up is they often try to skip directly to #3.

Taking too much risk- even with an edge, or trading without positive expectation, are two of a number of good roads to the poor house.

If you can live by Lescor's first two rules, then as your account grows, #3 will naturally occur)

I appreciate very much. Very useful. I find that you have changed your reply to be more specific. Thank you for your patience. I trade Soybean Meal in China, and its average daily volume can be several billion.But it mainly changed with Soybean in CBOT, so I have to pay more attention to CBOT. Although it is very hard to understand what you say for my poor English, I will always read the posts on this site to contact the traders in USA.

 

[Scataphagos]

recently came across a table of stats in a published paper that lists the concrete income of traders in a London prop trading floor:
http://www.pnas.org/content/105/16/6167.full.pdf?sid=923de3de-1794-448b-be58-5019925c299b

it's somewhat dated, from 2007, but it gives the specific avg annual income of traders there, and given that it's published in a journal with peer-review, the stats seem more applicable to the general population than the avg rumor mill / anecdote, etc, which either gives the income at negative/0 (for strong believers of the strong form of Efficient markets hypothesis) or at $30+ million (for individual wizards plugging away in the Japanese futures markets).

on page 4 of the article, it says the avg age of traders in their sample is 27.5, with annual income around £164,000.

given that it's a limited sample on 1 trading floor, am wondering if the average numbers today are roughly comparable? (wage inflation prob not as much of a direct factor, as they seem to be locals who work on profit split, not as hired labor)

or has avg numbers come down with influx of algos? (perhaps range has gone up, with some traders figuring out how to game the algos and etf accumulation mechanisms)

compared to this published stat, how r the guys on ur trading floor doing?

I understand you'd like to believe, "here's this group which is just KILLING IT" in trading... and you want to be the same.)

But aren't you suspicious of ANY story touting "average success is very high"? That infers there is an equally large pool of losers. (Doubt the losers have that much to lose, don't you?)

The markets overall are basically a 50-50 proposition. For every player who's convinced it's correct to buy, there is another on the other side of the trade who's convinced it's correct to sell.

I doubt ANY group is going to get heavily on the winning side... over time and with significant money, regardless.

 

[Scataphagos]

I doubt ANY group is going to get heavily on the winning side... over time and with significant money, regardless.

Big money and professional traders admit, "If we can get into the 52-55% win ratio range, we're doing great".

If you believe otherwise, likely it's "hope over reason".

 

[beerntrading]

I understand you'd like to believe, "here's this group which is just KILLING IT" in trading... and you want to be the same.)

But aren't you suspicious of ANY story touting "average success is very high"? That infers there is an equally large pool of losers. (Doubt the losers have that much to lose, don't you?)

The markets overall are basically a 50-50 proposition. For every player who's convinced it's correct to buy, there is another on the other side of the trade who's convinced it's correct to sell.

I doubt ANY group is going to get heavily on the winning side... over time and with significant money, regardless.

You're overlooking that the study's sample set is actually of currently profitable traders. If only because losers have lost and moved on. While you're points are true (mostly) of a random sampling of traders, selection here was not random.

Also, because more money enters the market than leaves it over very long time frames, it needn't be a zero sums game.

 

[Turveyd]

Its an average 1 bloke makes millions everyone else makes 50p, but enables that bloke to make the millions.