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keystone trading group
- Thread starter bonds
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If the $5K is paid for training fees, then of course the starting balance is zero. It's not being masked for deposit, it's payment for training under the prop terms and the training is carried out. You get a prop account to trade with, and that account absorbs all the losses. You don't pay any more to make up the losses. The prop account comes with very low commissions and 50/50 or 80/20 payouts if you make money with it.Quote from WinItAll:I GUARANTEE YOU THAT YOUR STARTING BALANCE IN YOUR DAILY REPORT WILL BE ZERO, even after you just handed a 5K check over. That means you have waived your right to your own money and only paid for training. Firms can now limit you as they see fit b/c in theory you only paid for training.
If the $5K is deposited as risk capital, then of course the starting balance is $5K. In this case there is likely no "free" training, and you get a leveraged account based on your equity (10:1 or 20:1). Losses are deducted from your risk capital and not absorbed by the firm. The platform fees also deducted monthly from this deposit. The commissions is slightly higher or negotiated, and 90/10 or negotiated payouts. Some firms required proven track record of consistent profits over 6 months period to accept such account, since you don't pay for training.
The "starting balance" as you defined, will depend on which of the two kinds of account (prop or leveraged). Training and mentorship are differentiated in favour of prop traders obviously, since losses are absorbed.
hope you stay true to this statement. so far, any facts stated are attacked as "shill", and the number of posts checked and past posting scrutinized for signs of promoting any of these firms ....Quote from WinItAll:I would like to hear from some guys who work at one of these shops. And other posters PLEASE DO NOT ATTACK THESE PEOPLE AS THEY'VE DONE NOTHING WRONG..... THIS IS A DISCUSSION, NOT A PLACE TO RIP APART GUYS WHO ARE TRYING TO LEARN IN THIS BUSINESS. SO LET'S KEEP THIS AN IMFORMATIVE DISCUSSION AND NOT A FIGHT.
Yes, T3 is set up this way for their "hedge fund". You can give whatever leverage you want because it is all margined against your primary account as that is the only account that is actually making trades (on the b/d side that is). But if you are not registered firm, the SEC still looks down on you if you charge overrides. That's a no-no.Quote from cashmoney69:
If a firm does NOT require any risk capital of its traders, and only trades the firms money. is that firm still considered a broker/ dealer?
say a trader with 15mil starts his own operation, he brings on 5 people and trains them, and gives them 3mil a piece + leverage through say lightspeed.
Is something like this common/ easy to set up?
An overide is the difference between what a prop shop charges you and what they are paying.
For example, any firm with a few traders is paying no more than fifty or sixty cents per thousand shares and probably charging you five or six dollars per thousand. At the end of the month the thousands that this amounts to is the firms override.
For example, any firm with a few traders is paying no more than fifty or sixty cents per thousand shares and probably charging you five or six dollars per thousand. At the end of the month the thousands that this amounts to is the firms override.
In a last attempt to try and give you atleast basic knowledge of what's going on..... They can't call it a risk deposit b/c it's illegal. Obviously if your bending regulations you don't call it that. If you're not smart enough to figure that out then I can't help you.
Also, it's completely illegal to give leverage above 4 to 1 to a trader that is unlicensed. If you have under 25K in your account the SEC rules state that you are allowed to make 3 trades per week and if they see you are doing more than this your account is dropped to 2 to 1 b/c you are a pattern day trader without sufficient capital. AT NO POINT IS AN UNLICENSED TRADER LEGALLY ALLOWED TO HAVE MORE THAN 4 TO 1 LEVERAGE. MOST PROP SHOPS LIKE THIS ONLY THEMSELVES HAVE 4 OR AT MOST 8 TO 1 LEVERAGE FOR THEMSELVES. THEY GET 4 TO 1 FROM A B/D OR CLEARING HOUSE AND THEN LEVERAGE YOU OUT B/C IT'S SETUP LIKE YOU'RE TRADING THEIR MONEY. AND LASTLY, IT IS ALSO ILLEGAL FOR A NON-BROKER/DEALER TO MAKE MONEY ON COMMISSIONS OFF OF YOU IF YOU'RE NOT A LICENSED TRADER.
But obviously you knew all of that. The fact that you can't figure out by yourself that your training fee is the same amount of money you can lose before getting trained again is somewhat concerning. If you decide to join a prop shop then atleast do the research and understand what you are joining instead of trying to correct others who know infinitely more than you.
Also, it's completely illegal to give leverage above 4 to 1 to a trader that is unlicensed. If you have under 25K in your account the SEC rules state that you are allowed to make 3 trades per week and if they see you are doing more than this your account is dropped to 2 to 1 b/c you are a pattern day trader without sufficient capital. AT NO POINT IS AN UNLICENSED TRADER LEGALLY ALLOWED TO HAVE MORE THAN 4 TO 1 LEVERAGE. MOST PROP SHOPS LIKE THIS ONLY THEMSELVES HAVE 4 OR AT MOST 8 TO 1 LEVERAGE FOR THEMSELVES. THEY GET 4 TO 1 FROM A B/D OR CLEARING HOUSE AND THEN LEVERAGE YOU OUT B/C IT'S SETUP LIKE YOU'RE TRADING THEIR MONEY. AND LASTLY, IT IS ALSO ILLEGAL FOR A NON-BROKER/DEALER TO MAKE MONEY ON COMMISSIONS OFF OF YOU IF YOU'RE NOT A LICENSED TRADER.
But obviously you knew all of that. The fact that you can't figure out by yourself that your training fee is the same amount of money you can lose before getting trained again is somewhat concerning. If you decide to join a prop shop then atleast do the research and understand what you are joining instead of trying to correct others who know infinitely more than you.
The training fee is just that. The amount you can lose theoretically on a prop account is not tied to the amount paid for training, all losses are absorbed according to the terms. I think this is what confuses you in your arguments.Quote from WinItAll:The fact that you can't figure out by yourself that your training fee is the same amount of money you can lose before getting trained again is somewhat concerning. If you decide to join a prop shop then atleast do the research and understand what you are joining instead of trying to correct others who know infinitely more than you.
Quote from WinItAll:I would like to hear from some guys who work at one of these shops. And other posters PLEASE DO NOT ATTACK THESE PEOPLE AS THEY'VE DONE NOTHING WRONG..... THIS IS A DISCUSSION, NOT A PLACE TO RIP APART GUYS WHO ARE TRYING TO LEARN IN THIS BUSINESS. SO LET'S KEEP THIS AN IMFORMATIVE DISCUSSION AND NOT A FIGHT.