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prop firm dilemma
- Thread starter simpleplan
- Start date
Quote from 50 cent:
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
with your 1st line you have defanged wordlco bashers for a moment. don't worry the worldco whiners will regroup quickly.
Quote from zdreg:
with your 1st line you have defanged wordlco bashers for a moment. don't worry the worldco whiners will regroup quickly.
I was mentioning it's not WorldCo because I didn't want people to assume that I was trading for WorldCo, a firm that was known for its shady practices, and that's why I had such a bad experience. It wasn't WorldCo i was working for.
In the firm's I've managed, someone who put in 10k was afforded the same quality of service as those who put in 1mil. If they bitched and moaned they were looked at as any idiot who was exceptionally rude. It seemed however the rudeness level was in direct correlation to the amount of stupid, (not bad) trades that they decided wasn't their faults.
I will say however that I would go that extra mile for a heavy hitter in terms of additonal services that cost the firm extra dollars. If a guy is making me thousands a month I will give him addditonal equiptment and technology if needed. If a guy who was barely break even requested it, he would have to pay any additonal costs himself.
But yes there are those who barely maintain accounts and think they own the firm. But its more of a personality flaw than a monetary one!
I will say however that I would go that extra mile for a heavy hitter in terms of additonal services that cost the firm extra dollars. If a guy is making me thousands a month I will give him addditonal equiptment and technology if needed. If a guy who was barely break even requested it, he would have to pay any additonal costs himself.
But yes there are those who barely maintain accounts and think they own the firm. But its more of a personality flaw than a monetary one!
The most amazing advantage trading gives you is FREEDOM. You need to answer to no-one but yourself.
Once you go prop, you lose that advantage. Suddenly you need to answer to everyone, just like when you had a day job, except you don't even get a salary!
As I mentioned before, I was naive not to be aware of these things. I appreciate traders that ask opinions on elite before going prop. Because I didn't. I simply didn't know where I was walking into. That was a very very naive move on my side. Anyway, you live and learn.
Once you go prop, you lose that advantage. Suddenly you need to answer to everyone, just like when you had a day job, except you don't even get a salary!
As I mentioned before, I was naive not to be aware of these things. I appreciate traders that ask opinions on elite before going prop. Because I didn't. I simply didn't know where I was walking into. That was a very very naive move on my side. Anyway, you live and learn.
Quote from 50 cent:
...
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.
Look, this type of behaviour is classic sales (scum) techniques. Obviously to the firm you were nothing more than a customer to be pressured.
Bottom Line: Any firm that behaves like this should be ignored. That is the word needs to get out that this is their mode of behaviour and that this is the scam they are running and basically the industry should refuse to do business with them.
I know that my companies would refuse to do any business with a firm that operates in this manner: believe me I have heard this story before not only in this industry but in others and there are plenty of companies - big names by the way - that we avoid and politely refer to our poor competitors.
Thoroughly check out firms before you do business with them: the easiest way to do this is to pull credit reports and do background investigations on the owners / officers. I have never yet found a disreputable firm in which a background investigation of the officers or principals did not turn up something negative.
Quote from simpleplan:
I can make money trading at a prop firm but I have this nagging guilt like I will get fired if I don't generate enough commissions even though I make money.
Here is my question. It sounds stupid but here it is:
Am I supposed to make money or generate A LOT commissions? Note the keywords "A LOT".
I can generate a lot of commissions also by scalping a lot but then I churn a lot also and lose a lot of my profits.
If I don't scalp aggressively then I don't churn and I will make more money. Sometimes a lot of money BUT I don't generate A LOT of commissions.
Hi Simpleplan... didn't catch this thread til today.
Trade and make money. That's your number one job. Any prop firm that doesn't want a profitable trader has issues.
Cash
i always wondered that if a prop firm trusted its system, its traders and its trader screening process--- why does it require a capital contribution from the trader ? can someone explain this to me ?
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