Prop Shops
- Thread starter Bones1955
- Start date
No,
What you actually said was YOU AGREED with P2, and if you read MY response, you will see that I was suggesting that one can go prop and be serious. Here is what you actually said:
Like I said, although I have never seen these "retail shops" that offer all these "perks" that you get at a prop/prof firm, I will take you word for it. HOWEVER, point 4) in my original post, the psychological aspect of trading ones own money, IS NOT catered by these retail firms.
So, _if_ you agree with P2 that you are not serious if you trade prop, I disagree with you. And if you disagree with me that these retail shops cater to those traders that would prefer to not put up their own money, then I disagree with you. Otherwise, we are in full agreement.
nitro
What you actually said was YOU AGREED with P2, and if you read MY response, you will see that I was suggesting that one can go prop and be serious. Here is what you actually said:
Like I said, although I have never seen these "retail shops" that offer all these "perks" that you get at a prop/prof firm, I will take you word for it. HOWEVER, point 4) in my original post, the psychological aspect of trading ones own money, IS NOT catered by these retail firms.
So, _if_ you agree with P2 that you are not serious if you trade prop, I disagree with you. And if you disagree with me that these retail shops cater to those traders that would prefer to not put up their own money, then I disagree with you. Otherwise, we are in full agreement.
nitro
Would you rather make 1% of a billion, or 50% of 100,000? Its very simple. If you are a retail trader, unless you are loaded, good luck doing more than one real arb position. Its all about capital. And then as long as you are holding your own, its all about more capital. If you have a ton of buying power and know how it use it effectively, who cares if you give up 10, 20 30 percent even 50% of your profit? Chances are you coulnd't have made that much with a small account and or small leverage on your own money. Anyway, I know I am speaking to the few here, but my opinion is the same. Most money managers are happy to make a few percentage points on their total assets, which is not THEIR money, so I should be happy doing the same with my firms money. And I am.
Back in the late 90s when I was trading prop, I was paying like.02 per share and my retail buddies were paying ticket charges of like 20.00 or 10.00 for 100 to 1000 shares, per side. I would make hundreds more per day and it was a simple decision of changing firms. Now all the commissions are the same pretty much on both retail and prop, i think, I can't imagine anyone paying a huge ticket charge, thats a joke. However, the difference is capital and how its used.
In some prop firms also you can draw on your profits and that doesn't affect your buying power. Especially in a place where you started with little or nothing, to me this is a big advantage. I don't know that the strict rules of the retail world would allow this, especially at 4:1.
My friend, the late Gene Weissman, used to say that leverage and buying power is all about the EFFICIENT use of capital. It truly is, and in my opinion, I use it more efficiently with the huge financial backing of a prop firm.
Back in the late 90s when I was trading prop, I was paying like.02 per share and my retail buddies were paying ticket charges of like 20.00 or 10.00 for 100 to 1000 shares, per side. I would make hundreds more per day and it was a simple decision of changing firms. Now all the commissions are the same pretty much on both retail and prop, i think, I can't imagine anyone paying a huge ticket charge, thats a joke. However, the difference is capital and how its used.
In some prop firms also you can draw on your profits and that doesn't affect your buying power. Especially in a place where you started with little or nothing, to me this is a big advantage. I don't know that the strict rules of the retail world would allow this, especially at 4:1.
My friend, the late Gene Weissman, used to say that leverage and buying power is all about the EFFICIENT use of capital. It truly is, and in my opinion, I use it more efficiently with the huge financial backing of a prop firm.
I'm going off topic but I trade in what is considered a prop. firm. I have a few good systems but my capital is too low to trade them comfortably. (Sharpe Ratio ranging from 1.6-2.7, all minimal to negative correlation with different concepts)
The firm sponsors my systems to trade and I get to keep 50% of the profits unlike 25% for a Hedge or CTA. They were willing to let me keep a relatively small account for my discretionary trading too with minimal commision rate (The owners are members of the Merc and other exchanges
)
Anyhow, prop. firms are nice.
The firm sponsors my systems to trade and I get to keep 50% of the profits unlike 25% for a Hedge or CTA. They were willing to let me keep a relatively small account for my discretionary trading too with minimal commision rate (The owners are members of the Merc and other exchanges
)Anyhow, prop. firms are nice.
What about the leveraged retail accounts. PTF for example.
Reread my posts. I said that I have friends who trade prop and are serious. I did not question that of some prop traders. How many times do I have to say that? I agreed with P2 in regards to the fact that its about the capital. I disagreed with you in regards to the perks. You are continuously putting words in my mouth.
nitro, I know you trade from home, but do you trade prop (remote) ?
-FastTrader
Here is my experience and thoughts on trading retail vs prop. I have never understood the problem of giving prop a percentage of profit or loss.
If you have 50K at retail and you leverage it you have 200K buying power. You make your trades throughout the day using that buying power, gains and losses.
If you are trading prop and you give 20% back to the firm instead of trading with 200K buying power use 240K.
My solution is to just increase your size by 20% and you will net out the same. If you trade in 1000 share lots just up it by the percentage you give back to your prop firm. Trade 1200 share lots.
Obviously there is some psychological implications but if you want to be successful in trading you need to learn to trade with bigger size.
If you have 50K at retail and you leverage it you have 200K buying power. You make your trades throughout the day using that buying power, gains and losses.
If you are trading prop and you give 20% back to the firm instead of trading with 200K buying power use 240K.
My solution is to just increase your size by 20% and you will net out the same. If you trade in 1000 share lots just up it by the percentage you give back to your prop firm. Trade 1200 share lots.
Obviously there is some psychological implications but if you want to be successful in trading you need to learn to trade with bigger size.