Proprietary Trading Firms

Quote from Don Bright:

a trader would have to lose all his money, plus $10 million of ours before even having a potential loss assigned...beware of firms who lock up money for 12 months or have more traders money than their own....bad, very bad.

All the best,

Don
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Don, what kind of loss assignment are we talking about? At a prop firm, say a trader is long full buying power, $5million in a trade...the stock gets halted, the company is going under, and the guy just lost $5million.

Say there are 50 traders in total, are we saying that each trader might be assigned 1-50th of the loss? Would each trader be liable for $100,000 even if they each contributed a $5,000 or $20,000 deposit or whatever? Are we talking about those kinds of loss assignments or just about risking up to the trader's deposit amount at prop firms?
 
Wow - I love how these paper traders always take things to the extreme.

If you think in these extreme hypotheticals, how do you expect to be able to pull the trigger, ever?
 
Quote from optionzztrader:

On average, what does a good prop trader make for the day?
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It really depends on the person. A good prop trader can make tens of thousands a a day if he decided to risk that much.

It depends on their risk. If I had the capability to buy 10k shares of AAPL and scalp that all day long, well you can see how the profit or loss could be substantial. The good traders usually take it slow and slowly increase their shares.

For example, I might have a weekly or monthly goal. If I hit that goal, I go up 100 more shares per trade if I feel like it. If I do badly, I reduce my shares and wait until I make money to move back up. That is just an example of one way to do it. It also depends on your style.

Red_Ink_inc makes about 50 trades per day on average and on his days where he makes money he probably brings in around a thousand per day. He is very consistent with that. He trades stocks that cost less, which could impact his trading results. I trade stocks that move fast like AAPL, BRCM, NEM and all those that move quicker so it depends.

You should ask yourself what you COULD make, because the fact is, YOU COULD make anything you want as long as you have the strategy, it's just a question of the risk you take, which should be proper for your amount of capital. I only keep $1,000 in my prop trading account and sweep anything more than that.

It's just a question of style, there are a lot of traders that post on the P&L thread that have a rocky time, but people like Buddha and Tachyon, Steve Tvardek, they are very consistent, and those are the inspiration that keep me going, I don't care about the results, I care about the consistency, because as long as you are consistent with any amount, you should be able to scale it up and get the same consistent returns, yet so many new traders want to trade more shares to hopefully bring in more money and settle for unconsistent results.

You get the idea though.
 
I would say, these days, a good prop trader should avg $500+ a day (which is ~120K+/year). A great prop trader should avg over 1k a day.

A phenominal daytrader will make 300k+ a year.

Of course these numbers are all applicable nowadays, in 1999/2000 obviously the criteria would be a lot different :D

Quote from optionzztrader:

On average, what does a good prop trader make for the day?
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Quote from Steve Tvardek:

I would say, these days, a good prop trader should avg $500+ a day (which is ~120K+/year). A great prop trader should avg over 1k a day.

A phenominal daytrader will make 300k+ a year.

Of course these numbers are all applicable nowadays, in 1999/2000 obviously the criteria would be a lot different :D
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I guess I'm not good then :(

But I'm still doing 100 - 300 lots, and lately haven't made as many trades.

Steve, how many trades would you say you take a day on average?
 
thanks jmowery and steve. i have never daytraded stocks for a living since i mainly trade stock options, so it would be a little different for me to just trade stocks. i've posted somewhere asking if prop firms let you short as well as long. as you can see, totally new to the prop firm world, so any other insight would be appreciated. i've already learned alot about them by reading all i can on elitetrader and internet. just need to know more b4 i sign on with any of em. thanks.
 
Well, its hard to say because clipping out 100 shares here and there counts as a trade. I would say somewhere between 100-200? I really never keep track, just of share count. I would say I do btw 1.5-2.5 million shares a month if thats helps.

Quote from JMowery1987:

I guess I'm not good then :(

But I'm still doing 100 - 300 lots, and lately haven't made as many trades.

Steve, how many trades would you say you take a day on average?
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Quote from optionzztrader:

thanks jmowery. i have never daytraded stocks for a living since i mainly trade stock options, so it would be a little different for me to just trade stocks. i've posted somewhere asking if prop firms let you short as well as long. as you can see, totally new to the prop firm world, so any other insight would be appreciated. i've already learned alot about them by reading all i can on elitetrader and internet. just need to know more b4 i sign on with any of em. thanks.
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Many choices of prop firms. I wouldn't worry about a prop firm blowing up on you, seems like trading is taking off a lot of the new prop firms are getting a lot of traders, so it might be awhile before any blowing up occurs, but what do I know.

If you really do fear prop firms. Go to Genesis Securities directly, put up 5k and get 10 to 1 leverage, that would probably be your safest bet, and you'd get a nice chunk of leverage if you traded higher priced issues like I do.

I've been messing around with options, kinda tricky so far, a lot to learn, but even with options you pretty much have to have a good idea of where the underlying is going, so I'd imagine if you did ok trading Options that you might be able to do well with Equities. Try plotting support and resistance and playing breakout/breakdown plays, you got to pick the timeframe that is good for you, some like 10-15 minute timeframe and do a breakout of the first bar, some do it on the 1 minute timeframe, like I do and at any moment I can feel like putting on a trade, you just have to get a strategy and stick to it and have solid money management.

I did something strange, I went back and looked at my FXCM account for Forex trading, and I noticed how I blew out. I consistently pulled in 10 - 20 dollars per trade, but then I started noticing I'd have 40 - 50 dollar losses, and they'd all come clumped together. If I could have eliminated the big losses and just accepted the smaller losses, who knows, I might still be trading forex :eek: , but that was over a year ago, still extremely new to trading. But, keep losses small, and let winners run, you should be okay if you can handle the emotions involved in day-trading, it took me awhile to realize emotions are a huge factor in day-trading.

Trading in the Zone by Mark Douglas is a good read if you haven't read it yet, could help you with that, or if you have it, might want to re-read it before you get into day-trading equities. I'm going to read it tomorrow after market closes, too tired tonight.
 
Quote from Steve Tvardek:

Well, its hard to say because clipping out 100 shares here and there counts as a trade. I would say somewhere between 100-200? I really never keep track, just of share count. I would say I do btw 1.5-2.5 million shares a month if thats helps.
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Sweet, got it.

You trade the higher cost *fast moving* type stocks or the lower cost *slower moving*?

Just interested in your trading, because I always check out your blotter, but always curious as to how you get to your results. I'm assuming it's probably like Red_Ink's and others that scalp.

Do you use level 2 to determine your entries or mostly the charts, or a mixture of both?



But yeah, Optionz, see, Steve rigth there is a consistent trader, that is what I'm trying to do. Trade for consistency at the beginning, not the money, because as long as you have consistency and it's bringing in a profit, you can scale it up slowly and bring in more money. I'm going to assume that is how Steve did it as well.
 
i'm not really afraid to trade since i have been doing it awhile with options and know technicals, which is all i use. fundamentals can go suck it for all i care. just curious as to what strategies the prop firms want you to use mainly. all i care about is shorting and/or buying stock and possibly trading options which echo and benchmarq let u do. i love spreads as they are awesome for leverage and great for protection. yep, breakouts/breakdowns/trends are all i trade with confirmation of volume. i look at prior day's support/resistance/trends as well as current day to figure out where stock is going. it's pretty cool that i can usually predict where stock is going with previous day's trendlines cause those algorithms are easy to read and measure, pretty predictable. also going to pro trader course to see if they can teach me anything new as well. trading rules!!!!
 
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