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Need help sorting thru the prop firm maze
- Thread starter DLama
- Start date
look at other threads, oh well I will do it for you
http://www.traderslog.com/proprietarytradingfirms.htm
not curve, invertedCurve meaning the Inverted yield curve we had the last 2 years!
http://www.traderslog.com/proprietarytradingfirms.htm
not curve, invertedCurve meaning the Inverted yield curve we had the last 2 years!
Another thought. Generally speaking, if you are new and an unknown quantity to the prop firm and you decide to put up say $25K, so as to get a bigger split (90-100%), wouldn't most firms cut you loose if you lost your stake, before the firm had too much of a chance to lose their own capital? So effectively, they're "backing you" for leverage purposes only (and of course to make commissions).
I hope that doesn't sound too cynical but better to have all the facts upfront.
I hope that doesn't sound too cynical but better to have all the facts upfront.
From the other thread, for your consideration:
It's a whole different mind set than the "no money up" type firms. Our traders are running their business within our framework, using our capital to trade with, and keeping 100% of their trading profits.
If you make money, why pay a firm $5,000 or more each month in lieu of putting up money?
The "no money up" guys that are left, cerainly won't let you stay more than a couple of months if you're not generating profits to them via your share of commissions or profits.
One is an "employee" type relationship. Ours (for example) is an independent trader relationship.
And, when you leave your money in the account, month after month, you are putting money up anyway, right?
FWIW,
Don
It's a whole different mind set than the "no money up" type firms. Our traders are running their business within our framework, using our capital to trade with, and keeping 100% of their trading profits.
If you make money, why pay a firm $5,000 or more each month in lieu of putting up money?
The "no money up" guys that are left, cerainly won't let you stay more than a couple of months if you're not generating profits to them via your share of commissions or profits.
One is an "employee" type relationship. Ours (for example) is an independent trader relationship.
And, when you leave your money in the account, month after month, you are putting money up anyway, right?
FWIW,
Don
One thing to keep in mind is that some deals and types of firms are better suited to certain strategies.
For example some of these no money up firms let you trade at their cost, which is pennies per trade. Not per share, per trade. So if you flip 30,000 share blocks of stock and pay under a buck to do it, giving up 50% might be worth it because at .5 cents per share, or 300 bucks per round trip, you might not make anything.
If you position trade 5000 shares per day and make $1000 with not much drawdown, you'd be silly to give up anything.
If you're just starting and don't have any money, then there's really only one choice.
For example some of these no money up firms let you trade at their cost, which is pennies per trade. Not per share, per trade. So if you flip 30,000 share blocks of stock and pay under a buck to do it, giving up 50% might be worth it because at .5 cents per share, or 300 bucks per round trip, you might not make anything.
If you position trade 5000 shares per day and make $1000 with not much drawdown, you'd be silly to give up anything.
If you're just starting and don't have any money, then there's really only one choice.
It would seem to me if trader had two choices:
1. $5,000 deposit down and 80% payout
OR
2. $0 down and 40 to 50% payout
trade should chose #2. Trader would not have to worry about how close am I to losing my deposit and therefore out the door.
Also $0 trader could just focus on trading NOT worrying about commission cost and what is my leverage limit.
Its true that if Trade hits it big he wouldn't make as much.
1. $5,000 deposit down and 80% payout
OR
2. $0 down and 40 to 50% payout
trade should chose #2. Trader would not have to worry about how close am I to losing my deposit and therefore out the door.
Also $0 trader could just focus on trading NOT worrying about commission cost and what is my leverage limit.
Its true that if Trade hits it big he wouldn't make as much.
tradethetrade
Vendor
Traders trade differently when they put up capital. They are more cautious and disciplined which to me is very important especially in the beginning. My shop never forced me to trade when I started but I recognized quickly that with the scalping strategies that I was taught I was not going to make any real money sitting and waiting. Today the market shows me a lot of opportunities all day long. What do you want to become? A scalper or swinger?
Like Lescor said make sure you do some work on your prop. Is it a sub-llc? They can be dangerous so I heard.
What would they do to you if they recognize right away you won't become a successful trader. Since you didn't put any money and you are bleeding their money they might just cut you quickly. Putting your own money you could be hanging around long enought to learn how to trade.
Good luck...long road ahead either way you go.
Like Lescor said make sure you do some work on your prop. Is it a sub-llc? They can be dangerous so I heard.
What would they do to you if they recognize right away you won't become a successful trader. Since you didn't put any money and you are bleeding their money they might just cut you quickly. Putting your own money you could be hanging around long enought to learn how to trade.
Good luck...long road ahead either way you go.
Thanks to Lescor, Don and everyone else for their replies. You all make valuable points and provide me with much food for thought.
It seems clear I should do my homework and not make a hasty decision.
As a young person with a family, basically just starting out (though not without some trading experience), I unfortunately do not currently have the risk capital available to fund my own account. This is why I find it desirable, at this time, to go with a firm that doesn't require a capital contribution from me and promises to provide a good amount of capital to trade with. The one negative however is, they say since they are taking all the risk, I must trade from their office, which is not close to where I live.
To that end, does anyone know of a reputable firm, either based or with an office, in the Philadelphia/Southern New Jersey area that does not require a capital contribution and would make a fair deal....or one located elsewhere that would allow me to trade remote? Also would any of these firms allow futures and/or options trading?
Thanks to all for their help and Merry Christmas and Happy New Year.
It seems clear I should do my homework and not make a hasty decision.
As a young person with a family, basically just starting out (though not without some trading experience), I unfortunately do not currently have the risk capital available to fund my own account. This is why I find it desirable, at this time, to go with a firm that doesn't require a capital contribution from me and promises to provide a good amount of capital to trade with. The one negative however is, they say since they are taking all the risk, I must trade from their office, which is not close to where I live.
To that end, does anyone know of a reputable firm, either based or with an office, in the Philadelphia/Southern New Jersey area that does not require a capital contribution and would make a fair deal....or one located elsewhere that would allow me to trade remote? Also would any of these firms allow futures and/or options trading?
Thanks to all for their help and Merry Christmas and Happy New Year.
Nobody is letting a new guy they donât know trade at home with no capital down. I donât think there deal is good if itâs a day trading account. If itâs a swing trading deal itâs amazing then. Whatâs the commission rate? Anything over 6/10âs with a 65% payout will never make you money. I don't even think the 2 million buying power makes sense. Who is there right mind is letting a new guy trade 2 million dollars day one.