New Scalper at a Prop firm, cause for alarm?

Quote from Shrad7178:


I wish I had found these forums before I took the job.
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I knew that there would be tricksters and con artists out there running prop and "prop" firms, but I deliberately DIDN'T read any of these postings in order to keep my attitude positive.

It's kind of like warning somebody "Don't look down!" when they're on a tightrope. The only way they're gonna make it across is if they completely and congruently believe that they're going to cross just fine.

Of course, a positive attitude doesn't necessarily guarantee that you won't get ripped off or lose your own wad, but it's a must in order to win, and if you aren't in it to win, why start at all?
 
Quote from Shrad7178:

Hey Elitetrader,

First time poster. I have been browsing through these forums and have found the information excellent.

A little about myself. I just graduated school and found a job as a day trader on Craiglist. I was called up, went for an interview, took the position and am currently trading. I had to put down a capital contribution and receive no salary (seems like a fairly standard deal).

Our strategy is scalping the specialist on the NYSE.

With the advent of the hybrid system, the desk has dramatically dropped in number. I have been told by the manager that this always happens whenever something new happens in the market. The weaker players get weeded out. However, the manager seems more concerned with recruiting new people than helping those who are left.

I saw several posters mention in earlier threads about managers who scalp/churn their traders and blow them up and then just find new ones to repeat the process.

I was hoping posters could share whatever experiences/stories/advice they would be willing to.

I wish I had found these forums before I took the job.

Thank you.
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Hey Shrad,
I have been day trading for over a year and half now. I was just like you and started at a firm that scalps the nyse via "tape reading" the specialist. I was doing pretty well up until about 2 months, just when the hybrid really started rolling in. The hybrid market is extremely different and the old tape reading lessons and reading the specialist no longer applies. If your firm is teaching you this, about following size, then get out now. Go find another firm that will teach you better, up-to-date techniques.

One more thing to add...you shouldn't be worried about other traders leaving because they can't adapt to hybrid. You are starting out in hybrid so there is no drastic change for you to re-learn.
 
Just some advice: in 2 or three months when you burn out your deposit in commissions and losses, don't get discouraged. That's what these places are designed for. If you can't hold overnight positions it's set up so you generate large commissions. Even with rebates, it's really hard to trade a breakout by adding liquidity.

You're better off trading retail where you don't have to pay the ecn fees. If you calculate the desk fee and all the extra little fees, you're paying more to trade prop.

You're better off withdrawing your deposit and spending that money on some good education. Otherwise you will blow it in a few months and all you will learn is that trading that much is not how to make money.
 
Quote from Spxdes:

Hey Shrad,
I have been day trading for over a year and half now. I was just like you and started at a firm that scalps the nyse via "tape reading" the specialist. I was doing pretty well up until about 2 months, just when the hybrid really started rolling in. The hybrid market is extremely different and the old tape reading lessons and reading the specialist no longer applies. If your firm is teaching you this, about following size, then get out now. Go find another firm that will teach you better, up-to-date techniques.

One more thing to add...you shouldn't be worried about other traders leaving because they can't adapt to hybrid. You are starting out in hybrid so there is no drastic change for you to re-learn.
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Thanks Spxdes,

Are there any firms you would recommend? What are you doing now if you don't mind me asking? PM me if you'd like.
 
SCALPING STOPPED WORKING YEARS AGO. SORRY!

yes the hybrid system is pushing out a lot of people who can't adapt, but then again most of them were about to drop out anyway. look up zero sum game on google and then take a close look at how much you spend on commissions and i think a light bulb might click on for you. there is no way to succeed as a scalper unless you are paying a very low commission rate, but to get that rate you have to do a lot of volume, so how do you do the volume before you get a good rate? answer: deep pockets.
 
We have very few "pure scalper" types any longer...the scalpers have added automated programs to increase their profits in that arena, and we're glad that the hybrid has so many sweeps every day...but most have added other strategies to make much more money (pairs, M&A, etc.) to their quiver of techniques. Kind of neat that an automated scalping program can continue to make money, while at the same time you can be trading the openings and pairs.

Don
 
Quote from trade4life1234:

How has everyone adjusted to the NYSE changes?
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We have been thankfully surprised with how the "sweeps" are working...even better than "price improvement via trade throughs" - as I mentioned before, I kinda doubted that the Specialists would "go quietly into the dark night".

Trade on the same side as the guys making the money.

Don
 
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