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My Experience at a Prop Firm
- Thread starter pineman
- Start date
Quote from Maverick74:
As far as the prop firm bringing in traders they know will fail, I have to disagree with this.
I'll let you on on a little juicy tidbit. The owners of Worldco thought otherwise. They believed that noone really could make it trading unless they had an exclusive edge or were lucky. The whole game is based on commission generation. So that whole story about Walter talking to you when you asked him for money, he was straight up bullsh*tting to you. He just wanted you to keep generating volume.
Quote from the gardner:
compensation
just like any other hedge fund, ie sac capital
its all one account .....with direct investments by its top traders on witch they recieve 100 percent of the profits on their own money they have invested in the fund minus the management fee of 2 percent and minus comissions
on money raised ie 100 mil...the fund would split equally among its traders and managing partners
20 percent of the profits and 0 percent of the loss...so if the 100 mil becomes 200 ...the 20 million dollar profit would be split say among say10 individuals......2 mil each.......plus or minus 35 percent based upon performance metrics ie sharp ratios ,absolute gain, consistancy, diversification etc
about 30 percent of any indivduals compensation is then generally
left in the fund as a direct investment as long as that individual is with the fund
all of the above is the new way....foward ..their are so many great individual traders that if just a handful really focused and came together the result would be staggering ..rivaling any roi on any fund presently out their...
and their are many other things that could be easily done to tweek the performance...and amount of capital raised even higher much higher
its time we stoped selfishly trading in our briefs ...trading 2000 share lots...alone in the dark..when we have the absolute talent
to trade 400000 share blocks...
yes/// when your green your growing when your ripe you rot
gee, you guys think so?
i wonder why. maybe because the establishment wants the little guy to stay at a disadvantage and disorganised to maintain it's income stream from commissions and to dump it's larger positions on to the masses, via pension funds and 401ks, after they've raped the markup to pay for their vacation homes in europe?
now if only someone were crazy enough to go to a goldman sachs or jp morgan and say, loan us $10B, we promise not to wipe you greedy fucks off the map if we get the money from someone who'd love to knock GS/WS off its pedestal for causing the oil debacle of 2008. like, say, china or the former ussr.
i think putin would love to get oil back up to $100 a barrel, as would most of opec, the oil industry, auto makers wouldn't mind at this point either.
china might hate that, tho. could china by itself control oil prices by trading it within their borders, or would having the mass of props out there backing their positions following the trend and taking some volatility out of corrections, do you think they'd be interested in financing something like that to ensure the stability of future growth of its economy, keep its military growing and fed? or do they do that already?
i wonder...
only problem with high oil is it just fucks everyone's budget up at a time when all our budgets are squeezed to using our credit cards to eat at mcdonald's.
maybe recruit a couple of top executives and security lawyers to handle the compliance issues, so we traders can sit and do what we do best, scalp the fuck out of the ETFs day and night providing much needed liquidity to a market that could at any moment collapse from a major world news event.
like, say, another 911. london tube bombing. or who knows what. global warming floating half the populated cities of the world inside 20 years. yeah, that might fuck things up a bit.
or would we only make it worse?
hmm...
i think it's about time props get their shit together and stop pretending they're all smart enough to be the next SAC when the rules of engagement have clearly changed against that ever happening again.
why didn't i think of this first?
rb.
No doubt there are prop traders making millions. Keep in mind barriers to entry into prop firms are low that's why risk capital comes out of traders pockets. At the large hedge funds eg. SAC capital, barriers to entry are extremely high i.e. graduates from top universitieswith Phds or math/ science degrees and tenure with the top banks on Wall St.
Quote from dealmaker:
No doubt there are prop traders making millions. Keep in mind barriers to entry into prop firms are low that's why risk capital comes out of traders pockets. At the large hedge funds eg. SAC capital, barriers to entry are extremely high i.e. graduates from top universitieswith Phds or math/ science degrees and tenure with the top banks on Wall St.
of this i am aware, and rightly so. they earned the right to play in the show.
Quote from the gardner:
it seems to me that all the really good or great true prop traders are starting to band together to start a real hedge fund.
6 or 7 guys trading 1 account....in a real partnership ,with a real track record..raising and running real money
the market for these alternative investments also seems endless
some are even going public..ie fortress
it seems that the hedge funds are now where the day trading firms were 8 years ago..back then the technology was the hot thing now its intelligent money management..
the consistant prop trader,now must learn to trade real size,create real partners with whom they will work
not an easy thing to do ,after all most of these traders have been lone wolfs for years,competing against one another.
the big money will only be achieved these days via real cooporation,
the big prop shops should see this comming and foster the development of these new fast money hedge funds...while
maintaining a percentage of ownership
after all so many of us are as good or even better than managers who run billions. so now its our turn at the table.
i think it's a fucking great idea, because it's mine. i can find the people i need for managers easily, the money is a no brainer, traders will walk through my door and the ones figure out how to beat me on the golf course will get to get to join TRYK with their piece of the action.
after that it's game on.
the difference between talking about it on a trading forum and doing is me.
just watch.
People talk about prof firms as if they are some magical place you can get some kind of advantage.
You either can trade or you cant. If you can, you will be served well with competitive rates and a shit load of leverage. If you cant trade, stay home. Nothing is going to change, or trade small and until you figure it out.
You either can trade or you cant. If you can, you will be served well with competitive rates and a shit load of leverage. If you cant trade, stay home. Nothing is going to change, or trade small and until you figure it out.
Quote from dealmaker:
PROP FIRMS DOES GIVE YOU AN ADVANTAGE, 1) proprietary trading 2) access to capital 3) training and access to traders who have and are successful. The game is tough ( rate of success is very, very low) and most traders are ill prepared.
if the success rate is so low and traders are ill-prepared, then obviously what didn't work in the past is not going to work in the future. i think you proved my point. thanks.
TRYKtrading
"of this i am aware, and rightly so. they earned the right to play
in the show".
"if the success rate is so low and traders are ill-prepared, then obviously what didn't work in the past is not going to work in the future. i think you proved my point. thanks".
I never intended to criticise your right to make money. I was commenting on an earlier post comparing prop traders with traders at hedge funds.
You must admit hedge fund traders are better trained and better capitalized.
Success rate is low because both at prop firms or reatil brokerages trading is a MINUS SUM game i.e. you have to make on % basis much higher returns than trading firms on Wall St.. Majority of most prop firms profits come from the mark-up on the comission, that's why prop firms have to continually recruit.
At the same time if prop firms were not around successful traders will not have the opportunities they do. My vote is stick with the prop firms even though they are not perfect.
"of this i am aware, and rightly so. they earned the right to play
in the show".
"if the success rate is so low and traders are ill-prepared, then obviously what didn't work in the past is not going to work in the future. i think you proved my point. thanks".
I never intended to criticise your right to make money. I was commenting on an earlier post comparing prop traders with traders at hedge funds.
You must admit hedge fund traders are better trained and better capitalized.
Success rate is low because both at prop firms or reatil brokerages trading is a MINUS SUM game i.e. you have to make on % basis much higher returns than trading firms on Wall St.. Majority of most prop firms profits come from the mark-up on the comission, that's why prop firms have to continually recruit.
At the same time if prop firms were not around successful traders will not have the opportunities they do. My vote is stick with the prop firms even though they are not perfect.