Prop for an FX trader

Georgii

Georgii

Hello all,

I have been learning to trade FX for a while. At the moment I am in breakeven land. I'm coming to a fork in the road as far as my trading future is concerned.

I love trading FX and this is definitely what I want to do. The question is how to best go about it.

Currently I'm getting a finance MBA (its not a name school). I don't fancy working at the big banks, besides it seems the S&T departments are getting badly hammered these days.

I love the idea of trading totally retail, but I don't have the risk capital nor the confidence and experience necessary to do that for a living at this point. I could try to continue learning while working a FT job, but then I would be relegated to getting up at 1 am to trade Europe, and I'm not so sure I'd be able to be well focused on either my trading or my FT job with such a schedule. The learning curve would probably be tough to handle.

The idea of trading at a prop firm is appealing because unlike at a bank, I get to learn trading right away, and get to use someone else's risk capital to trade. I also get to be around experienced traders and learn from them.

It seems most prop firms in the NY-tristate area are all equities driven. I'm very much interested in sticking with currencies, because I believe in specialization.

In an ideal world, I'd love to join a program out of school where I would not have to pay for training or make any capital contributions. Does anyone have any suggestions for me?

Thank you for your help and constructive advice!
 
There are no FX prop firms since they already give you more leverage than you actually require to trade currencies.

The reason there are equity prop firms is that retail only gives you 50% margin or less plus requires $ 25,000 if you want to day trade.

So my advice is finish your degree and get a job. You will then be able to save enough money to trade currencies.

If you save enough money, I would switch to currency futures since you no longer have to pay a spread to trade. For example, lets assume the difference between the bid and ask for the EUR/USD is 2 pips, and assume you actually place a large enough trade like myself, that equates to $ 12.50/pip.

If you were to trade EUR futures, you don't pay any spread instead if the currency moves 2 ticks in your favor, you are already up $ 25 while a normal trader is now just break even. Also, assume you went long, when you finally close your position, you are paying another 2 pips, while a futures trader like myself just pays standard round trip commission for the entire trade.

The above is why most FX scalpers lose money over time not to mention some shady brokers that trade against you.
 
Quote from oraclewizard77:

There are no FX prop firms since they already give you more leverage than you actually require to trade currencies.

The reason there are equity prop firms is that retail only gives you 50% margin or less plus requires $ 25,000 if you want to day trade.

So my advice is finish your degree and get a job. You will then be able to save enough money to trade currencies.
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Thanks for your reply...

I understand that FX does provide excellent leverage. What I'm looking for in a prop firm is 1) someone else supplies me with risk capital, in other words invests in me 2) sponsored training, 3) being around profitable professionals whom I can learn from. I think that with points 2 and 3, I would be able to learn faster than if I stick it out on my own.

The problem I have is that if I get a job, I won't be able to trade during hours of peak liquidity (there are no entry level MBA type jobs that are 'part time' or start after lunch), unless I keep an odd schedule and trade the european session from 2 am to 4 am (in other words, go to bed at 9 pm EST, get up at 2 am, then go back to bed from 4 to 6). It'd be a bit crazy, and I'm imagining its going to take me a long time to get good because I'm not focused.

I have heard about the futures being good to trade, but right now I'm sticking to OTC because of the micro lots.
 
No disrespect, but good luck finding a prop shop that is willing to train you, and take all the risk while you learn to trade. From what i know so far props will want you to bring some capital to the table to cover any losses you may incur. And in some cases in order for you to trade their capital you would have to prove you are capable of trading for a specified time period. Im not saying they dont exist, because anything is possible, but i would say, the chances are slim that you will find a prop willing to take all the risk. Again, you will have to prove you can trade, before touching any capital they have. I would say focus on longer time period for example 4hr and above that way you dont have to be in front of computer all day, you only have to check every 4 hours or so. and just work your account up that way. Learn to trade first and then someone may be able to take a chance on you.
 
Quote from rtiger29:

No disrespect, but good luck finding a prop shop that is willing to train you, and take all the risk while you learn to trade
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From what my research has shown me, there are prop firms that will train you (as in, for free) and let you trade their money. I just haven't found any FX oriented ones so far. There are firms like Jane Street and First New York Securities who will train you (the problem with Jane Street is that they are pretty much looking for quant/algo types, and that is not me)

These firms look for graduates from undergrad/grad, typically, and I thought it would be an idea to approach them when I graduate.

If a firm invests in me, then I have a reason to be with them - its a mutually beneficial relationship. It shows that they trust me and are personally vested in me doing well.

On the other hand, if they just want to make $$$ off trading education and the commissions, while my capital is entirely at risk, then its a much, much worse deal and really pretty much pointless. For the money you pay for these courses, you might as well just use that money for trading.
 
Quote from Georgii:

From what my research has shown me, there are prop firms that will train you (as in, for free) and let you trade their money. I just haven't found any FX oriented ones so far. There are firms like Jane Street and First New York Securities who will train you (the problem with Jane Street is that they are pretty much looking for quant/algo types, and that is not me)

These firms look for graduates from undergrad/grad, typically, and I thought it would be an idea to approach them when I graduate.

If a firm invests in me, then I have a reason to be with them - its a mutually beneficial relationship. It shows that they trust me and are personally vested in me doing well.

On the other hand, if they just want to make $$$ off trading education and the commissions, while my capital is entirely at risk, then its a much, much worse deal and really pretty much pointless. For the money you pay for these courses, you might as well just use that money for trading.
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I can only speak for props that deal with forex as that is what my experience and research has been about. And to follow up on your last comment, yes, you might as well use that money to trade with. Thats why there are demo accounts. Open one up with the amount you think you will start with and start practicing. There are forums out here that can help. If you need them send me a pm and i can foward you links. There are a few places that will train you (forex) but you still have to prove and show for example two months of steady growth for them to allow you to trade any of their income. But you would still have to bring some money to the table in case you start loosing. They want to cover themselves
 
Quote from rtiger29:

There are a few places that will train you (forex) but you still have to prove and show for example two months of steady growth for them to allow you to trade any of their income. But you would still have to bring some money to the table in case you start loosing. They want to cover themselves
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Interesting, so there are places that will give you actual training if you show that you already have some basics down and can make money. At that point I would gather its more like coaching than training per say, but that's fine with me because I already have the basics of technical analysis and fundamentals down. If I have someone that will review my trading, analyze setups with me, etc. that would be very good - on top of being with other traders and seeing them in action.

Two months account growth is not something I find unreachable (I think that's something you can simply get lucky with), six months or a year is a tougher call. (First New York demands 3 years of records). My question is, does size matter? For instance, do they want to see at least a four or five figure account?

Also, how does the deposit part work? Do they share in my profits and losses, or do the losses come out of me and the profits get split with them?

Thanks for your input...
 
Look on CL. Depending on where you are, there are a few fx props that advertise. Especially in the NY CL section. Don't know the details, but they are there.
 
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