Prop Trading Firm

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phil_rj

Hi guys,

I've decided to pursue trading for a living but humbly admit I have no daytrading experience. All I can say for myself is I've watched the markets pretty closely for the last couple of years and swing traded on and off -- unable to get intense given my intense job and wasn't profitable either, but acquired appreciation for risk management. I also did a good deal of reading on trading.

I feel I'd like to go work for a prop trading firm as a newbie and learn the ropes from there.

I've got a few questions:

1) Do you guys recommend firms that require initial deposits (such as in the 3k neighborhood) or only the ones where only firm capital is at stake?

2) Any suggestions as to which firms are best for the newbie?

3) How hard is it to get a job at a prop trading firm as a newbie?

4) Any tips on what the strategy should be at the interview? (eg. should I mention I've traded before or is that looked upon as a potential negative bias that will be difficult to "correct"?)

Thanx folks!
 
most firms require that you front up some money now. this aint the golden years like during the internet boom. if they dont ask for money, they are probably going to sweatshop you with high fees and commissions. first new york doesnt ask for money and they pay a salary but they are hard to get into.

keep in mind that prop shops make money off of you. they dont really care if you make money. as long as your generated commissions and fees is greater than your losses, they really shouldnt care.

for example, if you lose $2K per month trading, but you made them $5K in commissions, they are still making $3K off of you despite your losses.

some firms are strict with their hiring policies and some are not. usually if you can front the minimum capital contribution and you seem to have at least "average" intelligence, you are hired.
 
Thanks for the reply, monistat7. Any ideas, then, as to which firms would be a good place to start?

I've got an interview with Hold Brothers (they don't have a capital contribution). Any thoughts on them? I assume that since firm capital is involved, they could be stringent on the interview. Any tips on interview strategy will be much appreciated.
 
Quote from phil_rj:

I've got an interview with Hold Brothers (they don't have a capital contribution). Any thoughts on them? I assume that since firm capital is involved, they could be stringent on the interview. Any tips on interview strategy will be much appreciated.
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Dude, the requirements are not stringent at all. As long as you show that you have at least average intelligence and are not a crazy gambler that is itching to blow out, you're hired. Since you're not putting money up, they are gonna rip you off on commissions & fees, a churn & burn scheme. But if you are dedicated, you will spend the time learning, knowing that you have none of your own money at risk. Be concerned about your living expenses while you attempt to make it as a prop trader and your other options if you fail, which you most likely will.
 
They need a guy smart enough to not lose much and dumb enough to not catch on to being screwed. There is nothing better to a firm then having a guy come in happy and believing he is going to get paid. Anything over a 1 cent a share with system fees, and 85% or less payout then they are playing a game called bitch and you’re it. I say do for 6 months and leave. Don’t sign anything. If your good then maybe you can rework your deal even.
 
hold bros should not ask anything too technical like brain teasers or finance questions. everyone will definitely ask why you want to daytrade.

hold bros is a reputable firm but i cannot comment on any training they might offer. if you know anyone who is trading, i suggest going to that firm because you know it is an honest shop. in regards to training, there usually is none. if you can find someone to show you the basics, that is good. if you can find someone who will show you anything beyond the basics, you are damn lucky.
 
Quote from monistat7:

[...]
keep in mind that prop shops make money off of you. they dont really care if you make money. as long as your generated commissions and fees is greater than your losses, they really shouldnt care.[...]
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I disagree with you here. You are describing an arcade not a prop shop. A prop shop does NOT take money because you are a proprietary trader using the house's money to make money and you get a cut of what you bring in. That is prop. The "pay commission until you are poor" business plan does not work for prop because the money is their's. There is a huge difference. A prop firm cannot profit until you do. Arcades that require up front money can only profit by frequent trading.

To the OP: Please be sure to understand the distinct difference here. Also, you didn't mention what it is you want to trade and where.
 
I am a professional trader, have been for the past 5 years, and to have some refer to me as "trading at an arcade" is an insult.

Why do I trade as a professional vs prop. Because I make more money trading on my own vs doing a profit split at a prop. Commissions have come down quite substantially, interest expense is very small, and I have a great edge in my trading. So why would I want to give my talents away? Only if the cost savings add more to the bottom line, then I am giving away in profit splits. For me, and many other professional traders out there, the profit split doesn't make sense.

Mike
 
Quote from mschey:

I am a professional trader, have been for the past 5 years, and to have some refer to me as "trading at an arcade" is an insult.

Why do I trade as a professional vs prop. Because I make more money trading on my own vs doing a profit split at a prop. Commissions have come down quite substantially, interest expense is very small, and I have a great edge in my trading. So why would I want to give my talents away? Only if the cost savings add more to the bottom line, then I am giving away in profit splits. For me, and many other professional traders out there, the profit split doesn't make sense.

Mike
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Why is it an insult? By arcade, it doesn't mean that you are playing games. It just means that you trading your own funds using someone else's infrastructure, office space and, possibly, computer systems.

Strangely enough, people here have a bad impression of what a prop firm is and others have a bad impression of what an arcade is. My post seeks to clarify the difference.
 
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