Questions about prop firms...

mgoblow55555 · Sep 2, 2005

Hi, Iâve been a long time lurker and I had a few questions about prop trading. Iâve done well position trading equities, but Iâm sure that doesnât necessarily correlate to intraday.

What, in general, should one expect to be taught at a prop shop? How to trade? Risk management? I am interested in becoming a full-time self-reliant trader (waaaaay down the line), will a good prop house help me get there?

What will I need to know? Does one need to understand what a Eurodollar is, or just how it moves and reacts? For the record, I know what a Eurodollar is!

I have a very high IQ and I have the ability to decipher patterns and numbers quickly. Is this a huge advantage? Or is patience more advantageous? Courage?

Any other advice would be appreciated, I am unsure as to whether or not trading full-time is for me.

mgoblow55555 · Sep 4, 2005

Hello...

Is this question in the right forum? Anyone have any ideas?

aPismoClam · Sep 4, 2005

i have an idea that prop firms are scams.

peilthetraveler · Sep 6, 2005

Quote from mgoblow55555:

What, in general, should one expect to be taught at a prop shop? How to trade? Risk management?

They will teach you how to churn & burn. But at least they will teach you how to do it really slow so your capital wont be completely gone for about 7 or 8 months.

I have a very high IQ and I have the ability to decipher patterns and numbers quickly. Is this a huge advantage? Or is patience more advantageous? Courage?

I think having too high an IQ in trading is a disadvantage. It causes you to overanalyze crap. If everyone with a high IQ could make money they would, but they dont. Thats why you see all these PHD mathmaticians come up with complex formulas and they still dont make squat for money until they find out they can sell those formulas to people with the lower IQs. Patience is also not more advantageous, unless you are using the buy & pray...I mean buy & hold strategy. Only good use for patience is if you use it to paper trade before you start trading with real money. I say paper trade at least 6 months before you use your own money so you know what works. A year if you really got the patience. Most people say they lose money the first year, thats why i say papertrade, but then again most people dont have the resources to stop working for a year while they find their niche in daytrading.
[/b]

Any other advice would be appreciated, I am unsure as to whether or not trading full-time is for me.

Here is some good advice. Find out what the majority of people do that daytrade and do the opposite. Anyone that tells you how to make money daytrading is full of crap. All those people can tell you is how to lose your money slower and maybe make it look like you make money every once in a while. Someone once said (i dont remember who) but they said "If you arent making 250k a year daytrading, YOU SUCK!"

Just a question...how high is your IQ and where did you take the test? Dont believe those free AOL tests that test your IQ. My IQ is about 130 but on those free AOL tests it says its 165.

Casey30 · Sep 6, 2005

Quote from peilthetraveler:

Someone once said (i dont remember who) but they said "If you arent making 250k a year daytrading, YOU SUCK!"

Well,

I guess it all depends when this fella said this because if it was 1999-2000 that would be appropriate. If you said the same thing now about daytrading equities, i don't agree with you. It is just a discouraging statement. For instance, if you a trader who has only been trading a year or two and only make 100k-150k, do you suck? Maybe you are still learning and growing and in a couple more years you may be making far beyond 250k. It is all subjective.

peilthetraveler · Sep 6, 2005

Quote from Casey30:

Well,

, if you a trader who has only been trading a year or two and only make 100k-150k, do you suck?

Yes you do. After that few years when you are making 250k a year, then you dont suck anymore.

If someone only makes 100k a year, it could just be random luck (read the book "fooled by randomness) If you are making 250k a year its pretty good odds that you know what you are doing and its not just luck.

5yrtrader · Sep 6, 2005

Quote from mgoblow55555:

Hi, Iâve been a long time lurker and I had a few questions about prop trading. Iâve done well position trading equities, but Iâm sure that doesnât necessarily correlate to intraday.

What, in general, should one expect to be taught at a prop shop? How to trade? Risk management? I am interested in becoming a full-time self-reliant trader (waaaaay down the line), will a good prop house help me get there?

What will I need to know? Does one need to understand what a Eurodollar is, or just how it moves and reacts? For the record, I know what a Eurodollar is!

I have a very high IQ and I have the ability to decipher patterns and numbers quickly. Is this a huge advantage? Or is patience more advantageous? Courage?

Any other advice would be appreciated, I am unsure as to whether or not trading full-time is for me.

You may need to know what a eurodollar is if you are trading it. But congratulations on knowing that, I would say you are half way to becoming a super rich trader. Your high IQ and your ability to decipher patterns makes you a great canidate for a trader, why haven't you started already? You could be a billionaire by now!

Oh and to test your knowledge, please explain in your own words what a Eurodollar is? What does the futures price represent?

Newatthis · Sep 7, 2005

Quote from mgoblow55555:

Hi, Iâve been a long time lurker and I had a few questions about prop trading. Iâve done well position trading equities, but Iâm sure that doesnât necessarily correlate to intraday.

What, in general, should one expect to be taught at a prop shop? How to trade? Risk management? I am interested in becoming a full-time self-reliant trader (waaaaay down the line), will a good prop house help me get there?

What will I need to know? Does one need to understand what a Eurodollar is, or just how it moves and reacts? For the record, I know what a Eurodollar is!

I have a very high IQ and I have the ability to decipher patterns and numbers quickly. Is this a huge advantage? Or is patience more advantageous? Courage?

Any other advice would be appreciated, I am unsure as to whether or not trading full-time is for me.

From what you said, you have many of the mental capabilities to be a successful trader. You are also correct in recognizing that that part is only half the game. You will need mental toughness, discipline, patience but a sense of urgency, courage and fear.

afedoro · Sep 7, 2005

Quote from peilthetraveler:

Yes you do. After that few years when you are making 250k a year, then you dont suck anymore. If someone only makes 100k a year, it could just be random luck (read the book "fooled by randomness) If you are making 250k a year its pretty good odds that you know what you are doing and its not just luck.

Come one guys, the absolute $ amounts on their own make no sense. They're only meaningful within the context of the amount of capital used. The % is really what measures your skill. And still, you need to also relate it to risk for it to make a lot of sense...

Just my 2 cents.

Steve Tvardek · Sep 7, 2005

If you daytrade every day throughout a year and make 100k+, that is NOT luck. Not only do you need to know how to extract this $$ from the markets but also how not to give it back. There is a sh*tload more money to be made in the markets as we all know, but saying that someone "sucks" or "is lucky" to make 100k for the year is just nonsense.

Quote from peilthetraveler:

Yes you do. After that few years when you are making 250k a year, then you dont suck anymore. If someone only makes 100k a year, it could just be random luck (read the book "fooled by randomness) If you are making 250k a year its pretty good odds that you know what you are doing and its not just luck.