Prop vs. Hedge Fund

Quote from Don Bright:

Well, Mav...I was denied my request to post on a public board. But, I will bet you dinner that well over 50% of our "seasoned" traders are profitable (seasoned=24 months experience here). If I were to add all the newbies, you're correct just by my own definition of "losing" 50% during the first year (vs. 90% for all business ventures, as mentioned before).

Compared to the days on the trading floor, I think we do much better...the attrition rate was horrible...and, from what I'm told, isn't much better these days.

(Now, I'm going to wait for anyone from anywhere to say anything remotely significant about a firm that they run)....I won't hold my breath, LOL.

See you next week...

Don
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Don,

I'm pretty good with the linguistics. I see you caution your words carefully and I just want everyone to see what you are saying. Of course, through survivorship bias, anyone that is at your firm 2 years or more and who fall under your definition of "seasoned" will have a 50% success rate or greater. It should be close to 100% in theory.

But that was not the original question asked. My guess is that only 10% (20% tops) of all new traders ever make into their 2nd year at Bright or anywhere else for that matter as net profitable traders.

Don, I'm not pulling these numbers out of my ass, I talk to over 50 different prop firms in the Chicago area that trade everything from fixed income products, to index futures, to stocks and options. The numbers do not change!!!!!!!

I repeat this again for the hearing impaired, THE NUMBERS DO NOT CHANGE!!!!!!

The normal distribution curve over a large sample pool of traders has not deviated in 100 years and it will not deviate over the next 100 years. Anyone implying differently is trying to sell something!

Don, I run an office here in Chicago. I have every reason to lie, mislead, and tell tall tales of the joys of trading and wonderful lifestyles that one can lead from making millions in the market. The difference is, I choose not to. I tell every guy that comes into my office that they probably will be gone in 6 months.

And Don, listen to me carefully. It does not matter what product or what strategy they trade. They could be trading Crude, stock pairs, or stat arbs, it does not matter Don. The normal distribution curve is the same. I know traders don't like to hear this, but anything other then the truth, you are doing them a disservice.
 
I have never, and will never view success in our industry through rose colored glasses. I choose to to see the glass half full, as opposed to half empty. The success rate for any business venture is low, and we simply do our best to give those who are going to attempt trading (no matter what), the best chance to do as well as we possibly can.

And, for the record...."This is a tough business, and very few can survive, and much fewer can be successful"

Do you not agree that education and adequate funding help the chances for success? That's what we offer, no holy grail ever mentioned here.

So many come into this field blinded by claims from the "buy on green, sell on red" type of nonsense (that has been beaten to death here on ET, thank goodness)...that, in my opinion, represents the lowest of the low in promotion, but yet they get thousands to buy in every year.

As in the past, I think we actually agree more than we disagree on most trading related issues. You may think differently, but I've always respected your comments and beliefs.

Don

(check your PM, please)
 
Quote from Don Bright:

well over 50% of our "seasoned" traders are profitable (seasoned=24 months experience here). Don
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Playing semantics.

Yes, of course, OF WHOMEVER IS LEFT AT 24 MONTHS, 50% can be profitable. No big stat.

However, the number to be using there is: Of those who started 24 months ago, what rate of those are profitable. Your stat excludes those who have failed/quit.

Just not sure that the perception that you're leaving accurately portrays the reality.
 
Not playing semantics, I freely offer (many times) that 50% of those who start don't make it to year 2. My comment is only meant to show that much more than 50% of seasoned traders obviously make money, or they wouldn't be here.

Trading is certainly not for everybody, we make up a very small sector of the overall workplace.

Let's go chase down State lotteries and legalized roulette for a while, LOL.


Don
 
Given the failure rate in this business, the stats that Don provided are very good.

I do not understand why so many respond negatively to the only prop. owner that will get on a message board like this and share proprietary information.


Don... kudos.
 
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