Pro Firms

BrokerBoy, I had somebody tell me that you need a million dollars to trade for a living this week. I almost fell out of my chair laughing. I said it's not how much money you have friend; it's whether you can trade. Most people think money makes you a trader. Money makes amateurs a target, scared money.

In addition, I have been trading my own account without a prop firm and I am doing fine. So, I dont necessarily subscribe to the belief that joing a prop firm is going to make me more successful.

Furthermore, it appears there have been some scandals concerning Prop Firms so everyone should be careful.

In my humble opinion Bright Trading is run by a group of very knowledgeable people (The Bright Brothers) and family.

Trading from home gets boring, I like the idea of being around people who are passionate about trading like I am.

Anthony.
 
Come on guys...we lose the reason for having this darn board if we get back to silliness....we all have things to learn about trading, and we should respect one another...the Damn political parties are divisive enough...at least "us capitalists" should be able keep a common goal and be civilized....

Don
 
I owned a prop equities firm during the 1990's and we offered leveraged trading. It is neither a scam, nor a ticket to salvation. Here are the pro's and con's, as I constently saw them:

pro: Having a large sum at your disposal changes your mindset from "What can I trade with the money I have available?" to "Since I don't have to worry about running out of trading capital, what are the BEST issues to trade?" Admittedly, this benefit was more important when there were more juicy $300 stocks to trade, and trading capital allocation was more an issue, but it still changes your trading mindset.

Con: To the poster who was calling people "foolish" and challenging someone to prove him wrong, I can tell you. In regard to the typical trader, you are wrong. When you trade with leverage, you are swinging a big stick. Your money is able to involve you in trades you'd otherwise not be able to access; and in the case of most prop firms, if you put up your own money, then it goes first. This means that your $25K or $50K has ten times the buying power and 10 times the opportunity for gains...or loss. Most traders get in over their heads, either going into the market trading too much size, or taking on too many positions for them to track.

To me, the benefit of a true prop firm, one where you are trading the firm's capital, exclusive of your own, is that it builds the discipline necessary for a realistic view of the markets.

Absent discipline, the leverage tends to be a loaded gun in the hands of a kindergartener.

OT
 
Quote from Oldtimer:

I owned a prop equities firm during the 1990's and we offered leveraged trading. It is neither a scam, nor a ticket to salvation. Here are the pro's and con's, as I constently saw them:

pro: Having a large sum at your disposal changes your mindset from "What can I trade with the money I have available?" to "Since I don't have to worry about running out of trading capital, what are the BEST issues to trade?" Admittedly, this benefit was more important when there were more juicy $300 stocks to trade, and trading capital allocation was more an issue, but it still changes your trading mindset.

Con: To the poster who was calling people "foolish" and challenging someone to prove him wrong, I can tell you. In regard to the typical trader, you are wrong. When you trade with leverage, you are swinging a big stick. Your money is able to involve you in trades you'd otherwise not be able to access; and in the case of most prop firms, if you put up your own money, then it goes first. This means that your $25K or $50K has ten times the buying power and 10 times the opportunity for gains...or loss. Most traders get in over their heads, either going into the market trading too much size, or taking on too many positions for them to track.

To me, the benefit of a true prop firm, one where you are trading the firm's capital, exclusive of your own, is that it builds the discipline necessary for a realistic view of the markets.

Absent discipline, the leverage tends to be a loaded gun in the hands of a kindergartener.

OT
More...

We have found that the traders who have their own money at risk are far more disciplined than those who trade the firm's money...and since they also keep all the profits, their reward is much better as well.

I do agree that certain people should stay out of prop trading... just like the nickel gambler who starts playing at a hundred dollar table....they need to keep things in perspective.

All the best.

Don
 
>>>We have found that the traders who have their own money at risk are far more disciplined than those who trade the firm's money...and since they also keep all the profits, their reward is much better as well.<<<

It was my experience that folks ran out of money more quickly when they started. We limited the lot sizes and brought them along slowly. Problem was, when it was their money on the line, it was harder to teach the needed discipline. People wrap their ego's in their trading accounts and start to think that their trading prowess is a reflection of their personal standing.

This is not an issue when folks aren't trading their money.

And I certainly have no stake either way. That was just my experience.

OT
 
Quote from Oldtimer:

>>>We have found that the traders who have their own money at risk are far more disciplined than those who trade the firm's money...and since they also keep all the profits, their reward is much better as well.<<<

It was my experience that folks ran out of money more quickly when they started. We limited the lot sizes and brought them along slowly. Problem was, when it was their money on the line, it was harder to teach the needed discipline. People wrap their ego's in their trading accounts and start to think that their trading prowess is a reflection of their personal standing.

This is not an issue when folks aren't trading their money.

And I certainly have no stake either way. That was just my experience.

OT
More...

I'm not disagreeing with you at all...but we have a bit of an "edge" because all of our traders are trading our money as well, so we monitor them pretty closely. After 30, 90, and 120 day reviews, we encourage the positives, and do our level best to discourage the bad habits ...but it's tough to do with many of these "type A" personalities....we try to lead by example when at all possible.

Thanks for the input...

Don
 
Con: To the poster who was calling people "foolish" and challenging someone to prove him wrong, I can tell you. In regard to the typical trader, you are wrong. When you trade with leverage, you are swinging a big stick. Your money is able to involve you in trades you'd otherwise not be able to access; and in the case of most prop firms, if you put up your own money, then it goes first. This means that your $25K or $50K has ten times the buying power and 10 times the opportunity for gains...or loss. Most traders get in over their heads, either going into the market trading too much size, or taking on too many positions for them to track.

To me, the benefit of a true prop firm, one where you are trading the firm's capital, exclusive of your own, is that it builds the discipline necessary for a realistic view of the markets.

Absent discipline, the leverage tends to be a loaded gun in the hands of a kindergartener.

OT [/B][/QUOTE]

well i make money and i could not trade if i did not have firm capital. i also know alot of others like me so in the end people who can't do this will just be weeded out. so why do we have banks and creditcards and loans so people can use it as a tool right. i think thats the same thing a prop from does or am i crazy. lets be real there are people in this world who are going to screw up. so how will the guy who can handle it get his shot. also i don't understand you since you are saying basically part of your career you were wrong. maybe even worse your saying you proposely hurt people by letting them trade with alittle capital up so you can have nicer things. i just don't think you can go both ways.
 
Quote from silk:

How much can you make day trading with 150k??

If you make 100% after commissions (which is near impossible in this mkt) that is only 150k income.

I stand by my comment that you are wasting your time if you are trading 150k in capital.
More...

LOL are you serious? Look it's not 1999-2000 anymore where any monkey can flip around size. Trading takes skill and quality trades. Churning size for 10 cents is not the way to trade if you want to make money.

I know a trader, in fact I spoke with him today, who uses less than 150k in buying power. His trading is so damn good that he can make a 1000 bucks a day on small 100-500 share lots and minimal number of trades. When I was turning profitable, I was able to make 500-1000 a day trading no more than 500 share lots. I did not touch my 150k buying power at all. Later I needed more BP because I was starting to trade more size and was trading more expensive NYSE names. I was also starting to take more positions at one time. But 150k buying power is more than enough for a skilled trader.
 
We have a few traders with our group that have the same structure and can do well on P/L with 100k of BP.

The option and swing traders need more Cash to operate and don't make a % return that is even close. Trade well.
 
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