Seeking advice on situation; considering employment at Prop shop/hedge fund

D

daniel571

Hi all,

The time has come to where I may soon be thinking about working for someone else in the trading/investment industry, and I wanted to ask for some advice beforehand so I can be sure I'm not wasting my time. Any general comments/advice would be very much appreciated.

Background:
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Before I ask, here's me in a nutshell: 26 y/o Virginia Tech grad (studied Business IT, not finance). Been an entrepreneur for 10+ years. Not to toot my own horn, but I sold an online business a few years ago for several hundred thousand. I still have the bulk of it, but some is washed away with taxes/living expenses. I've had success with longer term contrarian/slightly speculative type investing/trading when I seriously started trading a year ago. I don't consider it too speculative, but many people probably would. My account at iB YTD is up at least 65%, mostly realized some unrealized. The account is worth ~a few hundred thousand (basically all my net worth lol). My main passion is doing tons of research online on potential disruptive/super high growth, sometimes highly shorted, or severely distressed tech companies (buying in steps) which I and many other folks online believe will prevail.. then having patience.

In an effort to add another business "layer" (since I realize the market isn't always going to be friendly and I realize I won't always be picking huge winners), I found a retired relative/mentor 5 months ago, and I've been day trading forex with him since then. He's been doing it for years. I'm still not totally confident in it, but I understand I'll need to give it more time and patience before making any final decisions. I think I'll give Forex until the end of the year.

What Now:
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If I decide to scrap Forex day trading, then what I'll likely want to do to work in conjunction with my longer term investing/trading is try to find a trading/analyst job at either a prop firm or a small hedge fund.

It sounds like there's different types of prop shops.. ones which are clear scams and make most their $$ on training material/commissions, legit ones which don't pay a base salary, and super-legit ones which pay a salary plus what you make. Where would I start in looking for these? Is getting a job at a hedge fund going to be crazy difficult?

I'd like to see what you guys would do if you were in my position..

Thanks.
Dan
 
65% is great, I would not change anything if in your shoes.

I could not find any books by Mehoff, Jack on amazon. It is a shame because if they were worth it I would have blown a wad on them.
 


It sounds like there's different types of prop shops.. ones which are clear scams and make most their $$ on training material/commissions, legit ones which don't pay a base salary, and super-legit ones which pay a salary plus what you make. Where would I start in looking for these? Is getting a job at a hedge fund going to be crazy difficult?
More...
Discretionary trading (you trading your own style and choosing your own trades) is available two ways: A. leverage B. A successful track record to convince others to give you money to trade.

Companies like market makers and others that pay a salary use that trader to complete a function or oversee a system. The two are not comparable. They also do not pay a salary + what you earn. You earn a salary and maybe a bonus but the trading is completely non-discretionary and you make the trades the firm asks you to. You don't make your own trades. If you have a successful track record that is in your name and verifiable by the broker, there's bound to be someone willing to invest some money with you. Money chases the winners. You must first perform and then the investors will come.

With Forex, leverage is always available which makes forex hedge funds / prop firms highly undesirable for traders because purchasing power is available with a much lower investment than what is required to get a job at a bank or market maker. It also gives you a lot more freedom to work your own style.

With the banks and larger funds, you still need to purchase education to get access to their capital. The difference is they want you to purchase education at a specific school / program while the smaller prop firms do not. You can get access to BP almost anywhere these days especially with the internet.

Just a few things you may want to consider.
 
As a professional bank trader for 25 years if you were my son I would advise the following:

You have enough capital to go back to school and get a graduate degree. You need a job, your undergrad degree doesn't apply unless you can program in C#, and you have no formal big corporate experience. However you are smart enough to know there are a lot of things you can do to invest in your future through other educational channels before spending it on learning to trading. On a trading floor a bank will pay for your trading education with their capital, but competition is fierce. You need a better pedigree.
 
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