Recruiting practices for Prop firms

Take two potentials, one is off the street, smart, sharp and quick to the point.

The other, he's a harvard grad, old money, dynasty type, superior ego, etc...

My money goes on the street kid. Ala "Turtles".

The ivy guy isn't hungry. I would trade against a team of ivy's any day, with only my little team of prop traders, and nerf footballs to throw around at each other when we think the other made a dumb trade.

Ego is the ultimate killer, and ivy folk are full of it, hence they are susceptible for getting smeared when they enter the fray....

Disclaimer: Ivy league drop-out. :D
 
hey im 'ivy league'...big deal...

ive also been slogging it out in the pits for 11 years with guys that can barely speak discernable english (and are fantastic traders)...and i know that the tags of education, breeding or whatever dont mean much there. thats what i love about trading...its the great equalizer.

completing a tough education is an accomplishment... but it is mostly disjoint to being a consistently profitable trader.

'arrogance' (intentional or not) is the anthema of any trader.
 
Ivy Leaguers are smart, no question about it. But as you all know, intelligence does not equal discipline. Often times it is in fact contrary.

Whether Ivy League or not, it's irrelevant. You should focus more on discipline.
 
The Ivy Leage Big time instituitonal traders are the ones that have wiped out the mutual funds for the small investor and also the one that shorted the market to hell the 2 weeks after sept 11

If these big shots were such good traders..Why are their big mutual funds down 20-40%....Man I have blown that away with out even looking at the market this year...
 
As we have been preaching for years...Mutual Funds are one of the worst investments you can possibly make...why pay some guy (Ivy League or not) to underperform the markets (90+% do year after year), when you can buy SPY's or DIA's or something similar yourself.
 
I work at a big prestigous fund co. They pay high salaries to PhD's, IVY guys, etc. to do two things: 1) to figure out statistical methods of indexing as cheap as possible.
2) to pick stocks and bonds. the active mgmt does not beat the benchmarks often or consistently.
*there was bragging when one fund beat the benchmark by 1% over a year period.:)

everyone hides behind the prospectus, when the market (ie fund) goes down, and claims credit when a fund goes up (read: market).

The buyside traders are not traders, they are cost efficient order clerks.

My point is not to bash my employer, but to point out that this is how big public $$ is handled, for better or for worse.:confused:

No REAL profit motivated traders/analysts ever stay at the co. though, Ivy League or otherwise.
 
Originally posted by QuoteBoy
I work at a big prestigous fund co. They pay high salaries to PhD's, IVY guys, etc. to do two things: 1) to figure out statistical methods of indexing as cheap as possible.
2) to pick stocks and bonds. the active mgmt does not beat the benchmarks often or consistently.
*there was bragging when one fund beat the benchmark by 1% over a year period.:)

everyone hides behind the prospectus, when the market (ie fund) goes down, and claims credit when a fund goes up (read: market).

The buyside traders are not traders, they are cost efficient order clerks.

My point is not to bash my employer, but to point out that this is how big public $$ is handled, for better or for worse.:confused:

No REAL profit motivated traders/analysts ever stay at the co. though, Ivy League or otherwise.
More...

Thank you for pointing out what I have been teaching traders (and College students) for years. It is good to hear it from an honest participant in this "game" we all play. I might ask you what kind of money your firm pays for commissions (most "fund managers" pay full retail, at least in the research I have done to date). I always wondered why they don't simply buy an exchange membership and put a body on the trading floor to execute trades and save a few $million per year....but, oh yeah, it's other people's money.....:-)

If you decide to start trading on your own, call me!!
 
the only time one should really want a manager would be for an offshore hedge fund that will generate returns and protect assets. It's a product the sells itself ;)
 
How easy is it to be a succesful prop trader? I am a broker at a firm and I have seen "order takers" from the trading desk becoming succesful prop traders. These guys start out by trading small (500 shares), and then once they prove themselves to the firm the firm gives them capital to trade with. These guys start with 50K, and get to keep 50% of the profits they generate. What blows me away is that these guys get to take home 20k to 40k a month! In fact one of the guys has never had a losing week for 2 1/2 years!

I have been day trading clients money for about 3 years, and have been moderately succesful at it. When I say moderately succesful I mean I have learned how "not to lose money". This might be amusing to most of you but I figured out that If I lost my "trading capital" then I would not be able to trade anymore. I say this with some regret since I learned to trade using customers money and unfortunately my learning to trade cost them cold hard cash.

Questions is this. I would like to leave brokerage for good but have no objection to keeping my licenses (all six of them). How much capital is a realistic starting point to put up at a prop firm like bright (as one example). If I put up 50k how difficult would it be to generate 10k per month? Out of every 100 traders, how many are capable of this (or more).

Presently I have been trading with one hand tied behind my back. I don't have direct access (call orders in but have access to Redi, INCA and 3 marketmakers- however phone ringing and reading order out costs me at least 10 seconds. Also, my cost per ticket is $30 meaning if I charge the client $35 a trade I make $5 dollars per trade and this commission cost is about double what it would cost me at most prop firms (if not triple). Also I have to pay for quotes, news feeds etc as a professional and do not get any rebates for order flow.

So to get around all these obstacles, I trade 300 share lots and try and snake 20 cents here or there - then I tell the client I made them $600 and let the client decide how much he wants to pay me in commission (in this example maybe $60 each way for a net profit of $480 to him and a net profit of $60 to me. On trades that I am stopped out on I eat it i.e charge him nothing and lose the $60 ticket charge).

The clients seem to think this is fair, but in effect I am trading other peoples capital and being paid based on how well I do (better performance equals better commission). Conversely, If a client isn't doing well he will yank the account.

Since I manage a decent amount of money (10mil , mostly not day trade money) but 90% of my revenues come from a few day trading accounts it seems like it is time for me to make the change.

However, going on my own without any client money - and giving up a good income (ok average to good income - 10k per month). I am hesitant to give it all up, open a day trading account with 50k of my own money - because if I lose my nut (trading capital). I have nothing to go back to.

Any suggestions? Right now I am just practising with accounts and taking there commissions down to the point that I don't make much if anything but just to see how much I can consistently and realisticly make. However not trading direct access for a "wannabe prop trader" Is like riding a vespa on the freeway - not very practical.

How much of a difference would direct access and commissions of 1 cent per share make to my bottom line?

Any input appreciated - sorry for the stupid questions and the tirade but I have to be a day trader, I feel like I was born to be one. (by the way I am a pro poker player in my spare time and seem to have no problem making $300 a night playing poker - Why can I not make $2000 a day as a day trader. Where can I learn. Any good traders with real track records interested in teaching me - Name your price. I will consider it. I want to learn how to be a better trader. I am past the "blowing up account stage" - done that 3 times - other peoples accounts. I am done holding overnight, not using stops, freezing in a bad trade, panicking out of a good trade, not being disciplined etc. - at least I hope I am. Any mistake that could have been made - I've made it.

Thanks
 
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