Keystone Trading - SCAM or not?

Why is everyone saying this is a "scam". It's not a model I would ever trade in, but for a newbie it isn't bad. First, you pay a "training fee" of between $4,000 and $10000. The $4,000 is what Online Trading Academy charges. I have no idea if the training is any good...but if it is then its not a bad deal. Second, they let you trade after you take their course. It seems like they only let you trade 100 shares and probably can only lose $100/day (just a guess). Is that so bad? True they really have a $4,000 cushion, and they might cut you off after losing $2,000 . But if you wanted to try to be a trader and have $4,000 to risk its a good option.

Most firms are doing the "training", or "membership" fee as opposed to a deposit. That seems to be what the SEC wants.

Most firms are also doing a profit split. 50% seems a little high, but 90% seems more reasonable.


Someone asked how they can only charge $.20/1000. Here's how. On their website they say that during the training period they tell you what stocks to trade. So basically everyone is pretty much trading the same stock. I'm going to assume they have a "per stock" clearing, which means they pay one amount to clear the trades, whether they trade 100 shares or 10,000. Only a guess but it makes sense.

For a newbie, this isn't a bad model to get your feet wet. If you become highly profitable you can just move to a firm that pays a higher payout.

Just my two cents!

GT
 
Quote from gtgtgt3:

That seems to be what the SEC wants.

GT
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Sorry GT, but the above sounds SOOOO socialistic. I've actually been a proponent for the demise of the SEC....the ones who brought us the obsolete PDT Ruling, and now the naked shorting rules. They're just terrible.
Prop trading is near the penultimate capitalistic endeavor....it's sad to see them succumb to the government.
See recent articles on America's movement to Socialism on www.marketwatch.com !
 
I agree syswizard...but if the SEC can come in any time and threaten to force you to spent 100's of thousands of dollars defending yourself, what are the prop firms supposed to do? And I'm sure someone is going to claim that what the prop firms are doing is illegal...but they would be wrong. Just call Sadis Goldberg and ask them.


Quote from syswizard:

Sorry GT, but the above sounds SOOOO socialistic. I've actually been a proponent for the demise of the SEC....the ones who brought us the obsolete PDT Ruling, and now the naked shorting rules. They're just terrible.
Prop trading is near the penultimate capitalistic endeavor....it's sad to see them succumb to the government.
See recent articles on America's movement to Socialism on www.marketwatch.com !
More...
 
Quote from IWT2008:

Any new info on Keystone Trading??

Wondering if they are worth looking into further.
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Same old, same old....big commitment in their training program is required regardless of your trading experience. The cost of the training is about equivalent to the min. deposit required at most prop firms.
 
Quote from syswizard:

Same old, same old....big commitment in their training program is required regardless of your trading experience. The cost of the training is about equivalent to the min. deposit required at most prop firms.
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Thanks for the reply...

Do they seem professional???

How is their platform (sterling?)???

Any negatives that you know about?
 
I have an update, after 3 or 4 months I am leaving. But I am happy. They have taught me to trade, and I am profitable now. The rules they make you trade under are a bit restrictive for me and I have certain goals that I don't think I can pursue trading under them.

So my opinion is that it is a great enviroment to learn, and for me it was well worth the money. I would have lost >5k in 4 months of trading on my own almost for sure.

I can't comment on how much $ they will let you work with if you really prove yourself as a consistant winner, because I didn't stick around long enough. So this is in no way a criticism of their rules. I just have some money ready to go in my own account, and see no reason to stay there anymore.

So basically, I really recommend them to someone that wants to learn to trade. If you already are a winning trader, I wouldn't bother, unless you trade a style that would benefit from the .0002 premier plan with 50/50 split. I am trading more of an intraday swing style, so the .005 90/10 and having to use sterling isn't my best option.

My only gripe is that they only let us trade 4 stocks a day. When you are shooting for bigger moves that can really put you out of action some days.
 
Thanks for the response baggerlord!

I have read your input on Keystone on a few threads and no doubt this information has helped me (and probably others) make an educated decision about this firm.

Just a few more questions if you dont mind.

1. Who determines the 4 stocks you trade? If they do what seems to be the criteria?

2. Do they dictate the style you have to trade? Can you scalp, trend trade, pair trade???

3. Is anyone, that you have personally seen, making good money? (Trading 100 shares with a $25k account it seems difficult)

4. How is the Sterling software? I have read unfavorable posts about it.

5. Is the company and environment professional?

Thanks in advance!


Quote from baggerlord:

I have an update, after 3 or 4 months I am leaving. But I am happy. They have taught me to trade, and I am profitable now. The rules they make you trade under are a bit restrictive for me and I have certain goals that I don't think I can pursue trading under them.

So my opinion is that it is a great enviroment to learn, and for me it was well worth the money. I would have lost >5k in 4 months of trading on my own almost for sure.

I can't comment on how much $ they will let you work with if you really prove yourself as a consistant winner, because I didn't stick around long enough. So this is in no way a criticism of their rules. I just have some money ready to go in my own account, and see no reason to stay there anymore.

So basically, I really recommend them to someone that wants to learn to trade. If you already are a winning trader, I wouldn't bother, unless you trade a style that would benefit from the .0002 premier plan with 50/50 split. I am trading more of an intraday swing style, so the .005 90/10 and having to use sterling isn't my best option.

My only gripe is that they only let us trade 4 stocks a day. When you are shooting for bigger moves that can really put you out of action some days.
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Quote from IWT2008:

Thanks for the response baggerlord!

I have read your input on Keystone on a few threads and no doubt this information has helped me (and probably others) make an educated decision about this firm.

Just a few more questions if you dont mind.

1. Who determines the 4 stocks you trade? If they do what seems to be the criteria?

2. Do they dictate the style you have to trade? Can you scalp, trend trade, pair trade???

3. Is anyone, that you have personally seen, making good money? (Trading 100 shares with a $25k account it seems difficult)

4. How is the Sterling software? I have read unfavorable posts about it.

5. Is the company and environment professional?

Thanks in advance!
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1. You have a list of 20 ish stocks, you pick 4 each day.
2. Yes. There is a scalping and a trend trading program. Details on their site.

3. No. I have only had contact with a couple other guys though. The chat room doesn't allow PM's between members. For all I know people could be killing it, I really have no idea. Your size and risk limits increase based on a rolling 20 day average of your profit. I found it too hard to make much money being limited to 4 stocks a day. That is probably a result of my impatience though. I also have had a hard time taking it too seriously, because I risk so much more at poker every day. My goal going in was to learn and then go my own money under a better payout, and that is what I am doing. I am sure if you really worked hard to prove yourself you would be given a lot of freedom.

Also, there are 2 levels, "apprentice" and "pro". When you graduate to pro you have much more freedom with how many stocks you trade. I am still an apprentice so have very tight restrictions.

4. I'm not a fan, but it works. It seems like nearly everyone in the industry uses sterling.

5. Yes. Great people, very professional, experienced traders. What you see is what you get, the website is a very honest description of what you will get.

I've actually decided for the time being to keep the account and make less trades on it, just so that I can stay in the room and keep learning from the guys, while I trade my own money for bigger P/L.

I would like to make the point that I haven't really put as much effort into this as I could have, and that is probably why my size is still so restricted. Based on my numbers so far, there is no reason to have upped my limits, so I think as far as size goes, I am the problem, not them!

I have heard Pete mention a few times taking positions of 2-5k shares so maybe that is the size they give to pro traders with a nice history.

Sorry for the long response, but I am trying really hard to share my experience without accidentaly giving the impression that I am unhappy with them.
 
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