Quote from colonelangus:
as dealmaker had said, the GOOD props will offer some sort of training and/or mentorship program to get you going
AND you have access to intraday with infinite amounts of leverage.
with that, if you truly are a whiz at the game but only have $5k in your retail 4X leverage intraday account, making 30% per month, it will be a while before you have the capital to trade half a million Apple shares per day. for me, i would rather not be paying the extra coin for the data feeds of a "professional trader" BUT the intraday leverage makes it well worth it.
NO prop trader is burning through 500K AAPL a day.
FEW prop firms have sufficient mentoring to maintain a consistent pool of profitable traders. i think the ratio of HOME to OFFICE is like 100:1 for assent backed offices. maybe even 200+:1.
and out of that, maybe 5% are making money consistently day in day out. the rest are just backsliding into debt and crime to feed their delusional greed habit. chatting over AIM what's moving and listening to that annoying little geek over the squawk box bark out baitandswitch trades does NOT qualify as mentoring. paying for webinars with esignal, paid for by kickbacks on the professional trader data fees, does not qualify as education.
hedge funds absolutely DO NOT provide better mentoring. hedge funds are staffed with pirates, blood-thirsty sharks that are in it for the money, and will employ every possible strategy, play every possible angle, manipulate and coerce everyone they can for an edge, with absolutely no concern for anyone but themselves, and their employers' bottom lines.
prop firms are about churning execution volume. nothing more. the more bodies they get on the network, the higher their leverage, the more money they make using your risk capital deposit in their collective accounts to trade against the positions (didn't think of that, did you?) of inexperienced traders, and in their own volume trades having access to a deep seeded string of waiting trades on the bid/ask in which to liquidate against their own traders.
you do not honestly believe they have your best interest at heart, when they can just recycle naive college student after college student with $5K, $10K of daddy's money to burn, do you?
it's no different than an atlantic city casino game of roulette. place your bet, lose, double up, lose double, double again, win, double down again, bust out. and all along that process, the house is betting against your position, delaying trades, front running, shorting you out, keeping you on a string scalping dimes so you don't get wise and rat them out to the sec.
any scumbag can hire a couple of traders to buffer incoming trades to cut .005 off every position, double them up, send them back cutting another .005 or whatever they can get away with depending on the volatility of the stock or etf. this is why you see massive gaps in the opens and closes. pending overnight trades coming waiting on preopen with delayed execution against opposite side positions within the same firm.
you have a room of 100 prop traders, half of them think AAPL is going to open down on the bell, the other half are long. it's not like any of these assholes can agree, or their opinions are based on any solid analysis, technical or otherwise, there are maybe 5% with university educations. most are wannabe poker players.
at best.
what a stock is going to do is all a guessing game. no one can predict the future. to assume you're right one way or the other is just insanity. so if you're the house, why wouldn't you delay executions by a half second, throw an extra .005 on there as a "liquidity fee" and run one side long against one side short and make money off both sides?
hedge funds play volume, move massive blocks of stock against known opposite side positions of their clients, other funds, and the pool. the prediction and matching processes are completed by computers that can calculate pi to the 1024th bit faster than i can type it. humans can not out think computers. hedge funds eliminate risk from the process by evening the odds, they don't assume it, or create it. but they can be destroyed by it if the entire market moves against them, which ironically, is themselves cannibalizing each other into oblivion at the moment.
you think you understand this game.
well, you don't. if you did, you'd be starting your own prop firm and not pretending to be smarter than everyone else by thinking you can actually guess which way a stock is going to open in 7 hours...
