Proprietary Trading Firms - A Different Business Model

[expiated]

A SNAG IN MY PLANS...

If I'm going to move forward with this, I'm first going to have to deal with an issue that has come up right from the jump, which is that Nadex stipulates that its users must abide by their rule that no one else has any economic interest in the trades they make. (My trader in India can sit by his computer and wait for trigger signals, not to mention monitor and adjust trades over several hours, which I simply cannot do presently, but MUST do to implement the system properly.)

Apparently the exchange does have a means of accommodating businesses, where several individuals might be trading, but since I did not sign up as a business, I do not know (and will therefore have to find out) what all that entails.

At the moment however, as a proprietorship, it's not going to apply to me anyway, whatever it is.

On the other hand, since my partner lives in India (I'm going to call him, Ajay), he can trade via an outfit I traded with while living in the United Arab Emirates (UAE), and I actually prefer over Nadex anyway (Deriv). However, they too stipulate that anyone who opens an account with them needs to be "acting only for their own benefit and not for any other person or on behalf of anyone else."

Consequently, instead of trading MY money (for the time being anyway) any funds Ajay receives from me will have to be as compensation for helping me to verify the robustness, validity and reliability of my system; and any funds I receive from him will have to be for the consultation, information and education I provide (which he will be free [and supplied] to do once our initial pilot project/study is over, God willing).

 

[expiated]

A Side-by-side Comparison
From MDFinancialSkills

At the moment at least, I plan to start off junior traders with a $250 account. There will be no fees nor any discounts. Employees will keep 50% of their profits, and foreign currency pairs (Forex) will be the only asset class they will be trading.

Education will consist primarily of instruction on how to follow the signals provided by the firm. Ideally, money and risk management will be programmed into the system/platform.

There will be no need to have any kind of challenge (other than demonstrating that one is able to follow directions) because obviously, this is NOT going to be an opportunity for those who think they already know how to trade. Rather, it will be designed for people who have been unsuccessful at trading, and for folks who have simply been searching for a low-entry way to make money online.

There will be no need to charge them to become "employees" because the business model itself will be designed to guarantee their success.

 

[expiated]

Foreign currency pairs (Forex) will be the only asset class they will be trading.

CORRECTION: Foreign currency pairs and foreign currency pair DERIVATIVES will be the only instruments traded.

 

[expiated]

EDUCATION​

For some time now, it has been my contention that intraday traders should always be entering their positions in the direction of the slope of the 20-minute baseline (with the six-minute baseline helping to inform entries and exits), and that from a day trading perspective, this measure has prominence over all others.

But to my surprise, I am of a different opinion now, having recognized that the 20-minute baseline is still too slow or lagging to be assigned this role, and that it is actually the eight-minute baseline which should be regarded as prominent, and whose slope should dictate the direction of each trade, with ideal entries made following pullbacks in this measure (see the bold crimson moving average below).

Even so, it remains that it is probably best if one heeds the recommendations of the eight-minute baseline ONLY when it is ALSO aligned with the angle of the moving average whose role it has replaced⁠—the 20-minute baseline.

 

[lucysparabola]

 

[Overnight]

...
There will be no need to charge them to become "employees" because the business model itself will be designed to guarantee their success.

What if they all blow out their accounts on the first day? Will you be the one on the hook to pay the counterparties? (I.E. The ones who staked you the money?)

Dude, you could not make $250 per day trading FX, and now you think you will make money by teaching other people how to trade FX? What is wrong with you?!? You have a screw loose.

There is a seriously hard truth to real trading you have never come to grips with. It is gnarly, it is rough, tough and tumble, and it is not for the timid.

This is what trading with real money looks like...

https://www.elitetrader.com/et/threads/and-they-have-a-plan-live.306838/page-67#post-5714585

You have proven over and over and over again that you are not cut out for it. You are not cut out for the real world of trading live monies. We are witnessing the birth of the new FTT, in you, in this your new, latest "trading idea" about starting your own prop firm. You need to step back and look in the mirror, man. You need to just chill, brah!

 

[ph1l]

What if they all blow out their accounts on the first day? Will you be the one on the hook to pay the counterparties? (I.E. The ones who staked you the money?)

Dude, you could not make $250 per day trading FX, and now you think you will make money by teaching other people how to trade FX? What is wrong with you?!? You have a screw loose.

He wrote:

At the moment at least, I plan to start off junior traders with a $250 account.

So, he will be responsible for $250 if one of his traders blows up an account (assuming it's retail forex where the most one can lose is 100%).

And

any funds I receive from him will have to be for the consultation, information and education I provide

So he will charge the "employees" for the information he provides.

How could this possibly not succeed?

 

[Overnight]

He wrote:

So, he will be responsible for $250 if one of his traders blows up an account (assuming it's retail forex where the most one can lose is 100%).

And


So he will charge the "employees" for the information he provides.

How could this possibly not succeed?

You know, it just occurred to me...There was a user on this site who kept banging on about how the best way to make money in this market it to just push BS instructional courses etc. If you canot trade, teach, yeah, that whole thingy.

But shit! I guess that is how expiated will finally make his money! Sucker people into his system of trading, which somehow worked for him in his head even though he lost money on it, and he is now a bazillionaire in his head!

I like this plan! Baffle the billions with bullshit!

 

[lucysparabola]

You know, it just occurred to me...There was a user on this site who kept banging on about how the best way to make money in this market it to just push BS instructional courses etc. If you canot trade, teach, yeah, that whole thingy.

But shit! I guess that is how expiated will finally make his money! Sucker people into his system of trading, which somehow worked for him in his head even though he lost money on it, and he is now a bazillionaire in his head!

I like this plan! Baffle the billions with bullshit!

I'm telling you, that last chart he posted... I could be profitable with it. I was going to throw him some bones but we all see how that went.

guy needs help fr.

 

[themickey]

I'm telling you, that last chart he posted... I could be profitable with it. I was going to throw him some bones but we all see how that went.
guy needs help fr.

A man with a white cane and dog on a leash can make money on a hindsight uptrend chart.
As for bones, you get them on your ass when trend falls or goes sideways.