Scalping And Prop Trading

Wake up, what do you think what happens at Knight trading?


Quote from rezo_s:



Hello Everyone.

Could someone kindly tell me where are those magic prop trading firms that do not require from trader to trade a LOT (not that I am interestes to work there, but still...), because I am seeing the clear tendency of "not caring" of returns at all, more important is to trade 200+ tickets a month, which is about 10!!! trades a day... (on forex, even if they have 3 pips spread, its 3*10=30 PIPS A DAY for nothing!!!).
I think it's immoral what FXCM and REFCO do with this.
They do offer managed accounts.
The question is - are those accounts managed by the prop traders who they were hiring recently (requiring 2 weeks demo :D trading and +200 trades a month), or are the funds managed by other professional traders? If they offer money management with those newbies, its not only immoral, but illegal as well.
More...
 
I dont know what happens at Knight, but how can investors money be traded by newbies - thats my point. Once again, I dont know what exactly goes with Refco or FXCM, but if this is the case, it really is sad. If they were training and giving test prtiods - thats nother thing, but not like this...
 
Yep, me too. But I think anyone here can only assume - just like me. We need some official representative to understand this issue till the end. But fact remains fact. I hear more and more about "investment houses" who practice such kind of "investments" and when picking traders, main criteria in those traders performance is # of trades instead of % returns, risk management and other major points...main thing is for trade not to be losing too much, and if the trader makes 10 trades a day, its 30 pips (with 3 pip spread)...they let trader trade lets say 200k, and demand strict risk control...Even just IBs are doing it, applying additional 1-3 (maybe 4-5) pips - and there you go - no need to be broker or market maker...this way traders trade actually 6-8 pips spread. Some even offer 1 pip to trader - why not.
In brief, its easy money...30 pips a day...lets take even 10 pips a day = 200 pips a month...not many traders can say having stable 200 pips profit each month...(and its 600pips if trader makes 10 trades a day!!!).
In this case, of course its not a problem to offer trader 50:50 and bonuses, but initially %returns is not the goal - just a bonus.
I have no problems with those firms/individuals doing it with their own money - its good business - making money on market without actually generating returns from trading...easy and clean money, and if I had nice money to invest and time to do it, maybe I would do it myself. The problem is when this happens with investors money. In that case initial criteria for choosing a trader to manage investors money shouldn't be #of trades a month/day. There are many different and more important criteria's that should stand as a priority...
Once again, I don't know whether Refco and FXCM in their later prop offers were raising capital of investors, but if its so, its not good. If we are talking about their own money, no one should have problem with that.
It looks more like they are stimulating other individuals to do business like this, as I see no interest on their side in such prop trading...They have professionals, and its just a game to encourage others to do such business. I already heard at least about 3 such programs...and unfortunately not all of them are trading only their own money...

Sorry for such a long post.
 
"There are several firms that do not require (in our case, let you) put up your money. Nor do they charge commission."

Who are these firms that don't charge a commission? I'm a prop trader at a firm that does not require me to put up my own money, but charges a commission.

Thank you!
 
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