Should I join this prop firm or keep trading for myself?

[Robert Morse]

They're in New York. Traders get $10-$20 million in buying power (compared to my $800k in buying power I'm working with currently). I can do a lot more with that kind of buying power, but they weren't clear on the max daily loss limit. They said they just increase it as you get more established and they get more comfortable with how you trade. They said it's normal for some of their bigger traders to go through 6 figure drawdowns. This just what they told me, maybe they're exaggerating or maybe it's for real.

My only other advice is to look past the "deal." Are these really people you want to do business with?

 

[tommcginnis]

There is absolutely no way that this (moving from WI to NY to trade prop) is a good idea.

If things go to shit, you have an established social network, plus vastly reduced living expenses.
In NY? You's screwed in no time.

You trade alone now: your successes and your failures are your own. In a prop environment, EVEN IF YOU SWEAR TO AVOID IT, you will become a BSD and rather than focusing on the process of your trading (and once or twice a year, enjoying the results), you will be one of those results-focused idiots who then can't manage their way out of a wet paper bag, cuz it'd put a hurt on your results, dontcha know.

The most valuable thing you've got going for you is not your technique (which you realize now you could teach to a monkey or an enthused 12-year-old), but your head, AND your head-space: your immediate living environment. You screw with your environment, you screw with your head. Screw with your head, and at the first wrong trade, your doom is sewn.

Do NOT screw with it. (If we're voting. We votin'?? No?)

 

[Ajm1734]

There is absolutely no way that this (moving from WI to NY to trade prop) is a good idea.

If things go to shit, you have an established social network, plus vastly reduced living expenses.
In NY? You's screwed in no time.

You trade alone now: your successes and your failures are your own. In a prop environment, EVEN IF YOU SWEAR TO AVOID IT, you will become a BSD and rather than focusing on the process of your trading (and once or twice a year, enjoying the results), you will be one of those results-focused idiots who then can't manage their way out of a wet paper bag, cuz it'd put a hurt on your results, dontcha know.

The most valuable thing you've got going for you is not your technique (which you realize now you could teach to a monkey or an enthused 12-year-old), but your head, AND your head-space: your immediate living environment. You screw with your environment, you screw with your head. Screw with your head, and at the first wrong trade, your doom is sewn.

Do NOT screw with it. (If we're voting. We votin'?? No?)

Interesting points. And yeah I meant to make this a poll. Anyone know how I edit the original post to include that? Sorry, I usually lurk but I just made an account to ask this question. I'm an idiot with these forum tools still.

 

[murray t turtle]

Interesting points. And yeah I meant to make this a poll. Anyone know how I edit the original post to include that? Sorry, I usually lurk but I just made an account to ask this question. I'm an idiot with these forum tools still.

%%
Sorry ;i dont trust polls unless its IBD paper or IBD online. Baron ''feedback'' can tell you how/polls; but i dont trust most polls.Keep looking for a remote ; new edges come+ go in the market. But sounds like you will NOT enjoy a noisy group setting-i seldom do.

 

[nooby_mcnoob]

There is absolutely no way that this (moving from WI to NY to trade prop) is a good idea.

If things go to shit, you have an established social network, plus vastly reduced living expenses.
In NY? You's screwed in no time.

You trade alone now: your successes and your failures are your own. In a prop environment, EVEN IF YOU SWEAR TO AVOID IT, you will become a BSD and rather than focusing on the process of your trading (and once or twice a year, enjoying the results), you will be one of those results-focused idiots who then can't manage their way out of a wet paper bag, cuz it'd put a hurt on your results, dontcha know.

The most valuable thing you've got going for you is not your technique (which you realize now you could teach to a monkey or an enthused 12-year-old), but your head, AND your head-space: your immediate living environment. You screw with your environment, you screw with your head. Screw with your head, and at the first wrong trade, your doom is sewn.

Do NOT screw with it. (If we're voting. We votin'?? No?)

To add to this, I would say the only way I'd make this trade is if the expected payoff is significantly higher than what I'm making now. So for me, that would mean that I should be making from $190->$800K-1 million in the year following. All the changes necessary personally, professionally, wouldn't budge for less than that IMO.

Also I have no skin in this game so take that for what it's worth!

 

[Specterx]

Hi, I've been trading for myself for 5 years, and I'm thinking about joining up with a prop firm. In those 5 years I've made just over $500,000 total (before taxes). I struggled early on, but gradually improved and in the past year I made $190,000. I am very consistent now and I'd like to scale up my operation and possibly join a prop firm.

There's one I've been talking to (I won't say which one in case they're reading this) which is offering a 40% payout but no capital contribution (no base salary, but I'm confident enough in my edge). They also have a better fee structure than what I currently have. My trading costs would be cut in half with them.

I am based in Milwaukee, Wisconsin but they are in a much higher cost of living area (at least 2x higher) and they won't let me trade remote. However, the no capital contribution required is appealing to me, and I think I'd be able to scale to the max immediately with their capital. I am worried about working in an environment with other traders though. Maybe they'd steal my ideas and destroy my edge? I'm so used to trading by myself. This prop firm preaches about their "open environment" too but I think it could be just more potential for traders to try to steal edges away from each other. I mostly scalp stocks, but I still think I can scale it up to a point where even getting 40% payout it could be at least twice to three times as much as what I make now. And even if there's some desk/data fees, I think the no capital at risk is a huge plus.

But my main concerns are relocating (I like it here in Wisconsin) and being surrounded by others who might eat away at my edge if they see what I'm doing. Is it worth the move and the experience?

Doesn't seem worthwhile to me unless the idea of moving appealed to you for other reasons, it's basically upending your entire life to accelerate your earnings curve by a few years, when you are already making decent coin. Much of the gains would be consumed by higher CoL and taxes, and many issues can crop up that would make the increase in PnL lower than you expect - due e.g. to lower strategy capacity constraints than expected, psych issues from larger size or from trading with someone looking over your shoulder.

If you looked around I'm sure you could find a similar prop deal that will let you trade remote.

 

[Maverick2608]

We do not have prop firms where I live and that might be the reason I simply do not understand how running a prop firm can be a good business.

I assume the prop firm requires that you cannot continue to trade for yourself if you join them, correct?

 

[Ajm1734]

We do not have prop firms where I live and that might be the reason I simply do not understand how running a prop firm can be a good business.

I assume the prop firm requires that you cannot continue to trade for yourself if you join them, correct?

Yeah, the moment I start with them, I have to shut down my personal account.

 

[Andras]

I don't have any experience with prop firms but on the math of it... In order for you to make $190K next year, you'd have to make ~$500K in profit next year and that's to stay where you are financially. Can you scale this to 2 million/year in the next few months? I doubt it. If you can scale it, then you can do it without a prop firm. There does not seem to be any benefit to you to join someone else's operation.

Bottom line, he should stick to what he got for now and can maybe consider doing otherwise later.

 

[trend2009]

but they weren't clear on the max daily loss limit.

it very much depends on the dd of your trades. if the dd is very low, you have very low risk playing your own money, you can simply scale up yourself, why work for others?