After reading the responses and some thought, I see that the trader should focus on making money b/c ONLY a trader that is making money can continue to generate commissions and share the profits.
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prop firm dilemma
- Thread starter simpleplan
- Start date
I was trading for one of the largest prop firms (not WorldCo). I had to put up $10K capital.
Every two weeks they would take traders who don't trade enough (i.e. don't churn their accounts) to a conversation, in which they would clearly state that "if you don't increase your volume it doesn't pay off for us to keep you". I and some other traders in the office have gone through this conversation on a bi-weekly basis.
More statements they threw at me and at other traders at our office (these are accurate quotes):
"A trader who trades less than 10 trades a day is a wanker."
"If you trade 50,000 shares a day we'll even pay you a salary."
"Just use the Time and Sales window to buy when there's a big bid and sell when there's a big ask, this way you'll make a lot of profitable trades."
I sure enough got a lot of those manager's angry looks that you guys mentioned.
I for one was not willing to accept their pressure to churn my account. I told the manager very firmly "I am trading with my money and therefore I will trade exactly how much as I like". Needless to say that increased the love between us.
The end of my personal story is, that after a few months at the office I took a month's vacation in Europe. One day I get an email from my dad, telling me that I got something called a "U-5" form in the mail. In other words, they simply fired me while I was on vacation. Once I heard about the U5 form I emailed my office's manager from europe and asked him what it was all about. He responded "we have decided to terminate your trading here, and we don't want you to work here anymore". Obviously I still have this email archived.
If you're sitting in a prop firm office you're asking for trouble. It's much better to trade remote, if for some reason you're hooked on going prop.
Anyway, to each his own.. but the least I can do is post my comments about these scums.
Good trading
50
Every two weeks they would take traders who don't trade enough (i.e. don't churn their accounts) to a conversation, in which they would clearly state that "if you don't increase your volume it doesn't pay off for us to keep you". I and some other traders in the office have gone through this conversation on a bi-weekly basis.
More statements they threw at me and at other traders at our office (these are accurate quotes):
"A trader who trades less than 10 trades a day is a wanker."
"If you trade 50,000 shares a day we'll even pay you a salary."
"Just use the Time and Sales window to buy when there's a big bid and sell when there's a big ask, this way you'll make a lot of profitable trades."
I sure enough got a lot of those manager's angry looks that you guys mentioned.
I for one was not willing to accept their pressure to churn my account. I told the manager very firmly "I am trading with my money and therefore I will trade exactly how much as I like". Needless to say that increased the love between us.
The end of my personal story is, that after a few months at the office I took a month's vacation in Europe. One day I get an email from my dad, telling me that I got something called a "U-5" form in the mail. In other words, they simply fired me while I was on vacation. Once I heard about the U5 form I emailed my office's manager from europe and asked him what it was all about. He responded "we have decided to terminate your trading here, and we don't want you to work here anymore". Obviously I still have this email archived.
If you're sitting in a prop firm office you're asking for trouble. It's much better to trade remote, if for some reason you're hooked on going prop.
Anyway, to each his own.. but the least I can do is post my comments about these scums.
Good trading
50
Hey 50,
unfortunately, there are more firms out there like the one you were with than the good guys. You don't hear alot about the very good good firms because they are not the recruiting maniacs that the reputable firms are. I was reprimanded for many times for asking a trader to reconsider his career goals because he was doing himself no good by spending so much time on something that at best he was marginal at. But because he traded volume, he was kept on and given $1000 draw.
Some firms will have 2 different payout schedules, one for volume traders and one for those trader longer time horizons. But your right, if you are risking your money you call you shots, they can however then ask you to help defer their cost. Fair is fair.
unfortunately, there are more firms out there like the one you were with than the good guys. You don't hear alot about the very good good firms because they are not the recruiting maniacs that the reputable firms are. I was reprimanded for many times for asking a trader to reconsider his career goals because he was doing himself no good by spending so much time on something that at best he was marginal at. But because he traded volume, he was kept on and given $1000 draw.
Some firms will have 2 different payout schedules, one for volume traders and one for those trader longer time horizons. But your right, if you are risking your money you call you shots, they can however then ask you to help defer their cost. Fair is fair.
Soesman,
They could instate a desk fee for low volume traders. This way things are clearer in advance. They could do a lot of things.. but as you read in my post, that is the way they chose.
> I was reprimanded for many times for asking a trader to
> reconsider his career goals because he was doing himself no
Ha.. we had some traders who churned their account to DEATH at our office. These guys were considered the master traders. One of them was assigned to teach new traders who just came to the office. This guy was a net loser, he lost all his account and eventually quit. Do you want to know what strategy he was using? Once the futures broke the high of the day, he would buy a few baskets of stocks. That was his main strategy. And that's what he taught new traders that came to the office. I shit you not.
I have chatted with this guy on MSN a few months later, and he admitted to me how blind and fool he was. I told him that even though I was smart enough not to churn my account, I was, like him, very naive about a lot of other things at the time. That prop experience taught me a lot about life. It was my painful initiation ceremony, so to speak. I have learned, and experience is the best teacher, that in life, there are those who sell dreams and those who buy them. Guess who's getting rich.
People must do their own thinking whether to go prop or not. But at least I hope that they are AWARE of what is going on, before making their decisions.
Cheers
50
They could instate a desk fee for low volume traders. This way things are clearer in advance. They could do a lot of things.. but as you read in my post, that is the way they chose.
> I was reprimanded for many times for asking a trader to
> reconsider his career goals because he was doing himself no
Ha.. we had some traders who churned their account to DEATH at our office. These guys were considered the master traders. One of them was assigned to teach new traders who just came to the office. This guy was a net loser, he lost all his account and eventually quit. Do you want to know what strategy he was using? Once the futures broke the high of the day, he would buy a few baskets of stocks. That was his main strategy. And that's what he taught new traders that came to the office. I shit you not.
I have chatted with this guy on MSN a few months later, and he admitted to me how blind and fool he was. I told him that even though I was smart enough not to churn my account, I was, like him, very naive about a lot of other things at the time. That prop experience taught me a lot about life. It was my painful initiation ceremony, so to speak. I have learned, and experience is the best teacher, that in life, there are those who sell dreams and those who buy them. Guess who's getting rich.
People must do their own thinking whether to go prop or not. But at least I hope that they are AWARE of what is going on, before making their decisions.
Cheers
50
Quote from 50 cent:
Soesman,
They could instate a desk fee for low volume traders. This way things are clearer in advance. They could do a lot of things.. but as you read in my post, that is the way they chose.
> I was reprimanded for many times for asking a trader to
> reconsider his career goals because he was doing himself no
Ha.. we had some traders who churned their account to DEATH at our office. These guys were considered the master traders. One of them was assigned to teach new traders who just came to the office. This guy was a net loser, he lost all his account and eventually quit. Do you want to know what strategy he was using? Once the futures broke the high of the day, he would buy a few baskets of stocks. That was his main strategy. And that's what he taught new traders that came to the office. I shit you not.
I have chatted with this guy on MSN a few months later, and he admitted to me how blind and fool he was. I told him that even though I was smart enough not to churn my account, I was, like him, very naive about a lot of other things at the time. That prop experience taught me a lot about life. It was my painful initiation ceremony, so to speak. I have learned, and experience is the best teacher, that in life, there are those who sell dreams and those who buy them. Guess who's getting rich.
People must do their own thinking whether to go prop or not. But at least I hope that they are AWARE of what is going on, before making their decisions.
Cheers
50
so in other words.. traders who trade alot and make alot have little to worry about.
50 cent wrote:
>If you're sitting in a prop firm office you're asking for trouble. It's
>much better to trade remote, if for some reason you're hooked
>on going prop.
You can trade proprietary in an office or remote.
You can trade individually (retail) in an office or remote.
It wasn't exactly clear which you were referring to.
>If you're sitting in a prop firm office you're asking for trouble. It's
>much better to trade remote, if for some reason you're hooked
>on going prop.
You can trade proprietary in an office or remote.
You can trade individually (retail) in an office or remote.
It wasn't exactly clear which you were referring to.
whether the firms were scumbags or not for other reasons, would you rent out space to fill it with guys who do 10 trades a day and not pay the rent? just being devil's advocate... and i don't mean guys who do 10 trades at 20k shares a trade. you can make 2 points a trade but if they can't pay the rent, why would they be in business?
Quote from i'mlong:
whether the firms were scumbags or not for other reasons, would you rent out space to fill it with guys who do 10 trades a day and not pay the rent? just being devil's advocate... and i don't mean guys who do 10 trades at 20k shares a trade. you can make 2 points a trade but if they can't pay the rent, why would they be in business?
You're right, and as I wrote, someone who's going prop should be AWARE of these things.
simpleplan (who started this thread), asked quote Am I supposed to make money or generate A LOT commissions? Note the keywords "A LOT". end quote
The answer is: YES, you are supposed to generate tons of commissions, and if you don't generate them, expect the managers to give you hell, and profits do not matter to the prop firms. Even if they get payout, eventually when you are good they reduce the payout % to a very minimal amount. They are not concerned with your profits, and the strategies they teach you are first and foremost designed to generate a lot of commissions. If you do go prop, you'll see for yourself.
So simpleplan, that's the answer to your question, at least from my experience and from the experience of people I know personally.
Once again, to each his own opinion.
Cheers
50