My thoughts on Prop firms (Some)

Well I think your degree will help you out. It might not make you a better trader but it will help you land a job with a good firm. Most firms that require no capital will start you out as a "trader assistant". Like Geneva Trading.

http://www.geneva-trading.com/index.asp

They are one of the hundreds of firms that you could look at. Starting as a trader assistant will teach you a lot about trading with out having to blow a large wad of your own cash.

But Caro is right, sometimes losing your own money can be the best education in trading.
 
Another big advantage of trading with a prop. group is the chance to learn from successful traders. This can be worth a lot more than lower commissions,especially for someone just starting. Just make sure that if you go with a prop. firm that you are not locked into a long term contract. Read all contracts carefully. visit as many firms as you can....trust your gut instinct...good luck
 
Anchor,

what else have you found in your search for a suitable prop firm (other than Geneva trading). For example, have you checked out Echo Trade? I am also currently looking at going pro and finding a good prop firm.

:)
 
I am not looking at Geneva, I just posted that web site to show how many different firms are out there. I too am looking into Echo. The office they have by my house is great. The treaders there are cool and easy to talk to and get along with. I have also just started talking to Don Bright. Then there is a small handful of other firms that do not involve putting up any capital that I am talking with right now. At the moment I like Echo the most.
 
Originally posted by tradinpat
Just graduated from college and all I want to do is trade. So I thought I would apply to some prop. firms. After a few resumes were sent I started to get responses. Now, I have never worked at one but from the conversations that I had I was not impressed. Basically, prop. firms have little to no risk (adding traders) and start making money the day you start trading especially if there is a capital contribution req. You are not "hired" but rather you are their customer or client. Yes, it is true that they would like to see you succeed but mainly because you will be trading more shares and of course the 5-10% of your profits(if you are profitable). The only advantages that I see are greater leverage and low commissions, but what about shitty workstations and bad execution. Bad execution is worse than paying more upfront on the commissions. It is important to note that I haven't spoken with all prop. firms and I don't want to generalize from my experiences but thats all I have to go on. What are you thoughts?
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You have the right idea. BTW, I completely disagree with CaroKann's advice. If you lose the firm's $$$ and go in the hole, it'll take you longer to get out before you ever see your first paycheck. And the advice of not to short stock is completely off center; you have to learn how trade both ways...with bullets... at a professional firm.

There are not too many firms left that will stake you, but if you have good credentials, you might want to try ETG, Heartland, or Schonfeld. These places provide training and stake you. ETG's deal kind of sucks, but their training is supposed to be excellent.
And they look new colllege graduates with ZERO experience to mold themselves.


Good luck.
 
Anchor suggested that you look for a firm where you don't have to put money up but to avoid a long term contract. I think with virtually every firm you have to make a choice between these two. Either you sign a long term contract or you put money up.

As far as firms that pay salaries or stipends to traders and take just a piece of profit, there are very few of those anymore (only a few I think).
 
If you want to be involved in trading then you need to treat the entire process like a business and ask questions like: who is taking the risk, who is providing the capital, what do you add to the equation etc. Lots of prop firms see you as nothing more than easy money. Others will be a more legitimate opportunity. Anyone who asks you to put capital up is NOT offering you a job - merely the option to pay for training of some sort. This is not unlike the deal the university probably gave you for your degree.

Good prop firms do exist: there are not many. They will offer you a legitimate employment opportunity coupled with qualifed ethical coworkers who will actually train you. Salary "Draws" are IMHO not equivalent to a legitimate employment opportunity. The key here is to spend time carefully researching and investigating any prop firms you are considering.

Another option is to go into financial services and get paid a legitimate salary for a few years to learn the ropes and then come back to trading: after a few years you might find that "trading" is only part of an larger investment strategy that you will develop.
 
Originally posted by CalTrader

Good prop firms do exist: there are not many. They will offer you a legitimate employment opportunity coupled with qualifed ethical coworkers who will actually train you. The key here is to spend time carefully researching and investigating any prop firms you are considering.
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I was just wondering what firms would make your "good prop firms" list?



Another option is to go into financial services and get paid a legitimate salary for a few years to learn the ropes and then come back to trading: after a few years you might find that "trading" is only part of an larger investment strategy that you will develop.
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I disagree. You are either a trader or an investor. Working in financial services and cold-calling shleppes all-day will not help you one bit with your future trading. Just my 2 cents
 
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