The Perfect Prop Firm

I don't want to get into it with you. I have been rude to you and you have been more than polite to me, but if you want my honest opinion (and I'm sure you don't) consider 50/50. It is a hard pill to swallow at first, but in my experience it is the only enduring model.

and it isn't just prop firms, it's a model for all financial dealings in life.

50/50, it's painful but it works if you live long enough.

nobody wants to do what's right because in the short run it doesn't make financial sense, but if you light some candles and smoke some pot on a night when the market is closed, especially if you are young with an attractive lady it makes sense.

so to answer opies original question, 50/50, anything less is unacceptable, and if you are running things it should also be unacceptable to you because you realize anything less is not sustainable.
 
Quote from Lucias:

Perfect prop firm...

It can come in 2 flavors

Flavor #1

* Offers remote trading
* Provides reasonable amount of firm capital
* Provides a split of about 40% to 50%
* Committed to long term success
* Doesn't pay a salary
* Offers optional collaboration and information sharing
* Doesn't restrict outside prop activities

Flavor #2

* Pays a reasonably salary, 50k-120k
* Provides strong direct performance bonus (200k+)
* Committed to long term success and training
* Provides strong sharing of information and collaboration
* Strong benefits plan and staying power

Ideal for both flavors
* Supports futures, equities, etc
* Offers a lot of freedom in trading style, product, methodology (futures, options, stocks, all supported). overnight holds, etc.
* Offers either a dedicated researcher or "on call" research resistant for performing quantitative analysis, programming, etc (i.e on call 24/7 but not a dedicated)

I mean its really pretty simple.. you want to work for someone who sees value in what you're doing and has the ability to support you. Of course, Mav talk about how great these prop firms are... well MSFT was going to make me an offer of 120k starting plus 20k stock options. yet, we are pose to believe a prop firm that doesn't even pay a draw is a good deal.. lol.. Sure, it could be a great deal for a kid living at home and not having to pay any bills.. otherwise can't see it.

I feel a lot of the people here are big blow hards. This is why I don't come here as often. Maverick has suggested that the good traders are pulling down 100k per day.

Well, I spoke with 2 prop firms (don't name them maverick!!). One of the firms told me that it was very rare to see a first year trader make more then... 40k first year!! Yet, Maverick wants us to believe that discretionary prop trader are making 100k per day... The other firm indicated they were not going to be hiring anymore discretionary traders and were moving toward using teams of quantitative traders+researchers.

Having spoke with multiple firms and checked what the firms claim to want, the era of the discretionary trader is past and gone.
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Not gonna happen. Your flavors are expensive. Prop lite firms are cheap. El Cheapos.

As for the eat-what-you-kill-no-draw-no salary-nothing deal, it is a raw deal.

The only benefit is leverage but that comes with a cost. If the firm blows up b/c of a rogue trader, all your money you put up and all the money you made could be gone.

And being paid once a month or once every two months is ridiculous.
 
I trade at a deposit/full payout (almost) firm. The guys are honest first and foremost, they'll give you leverage if they think you know how to use it, and you have pretty much free access to your capital. All you can really ask for in a prop firm.

Yet sometimes I really wonder how they stay in business, given market conditions right now. Compared to a few years ago, I'm guessing the overall volume per trader has probably gone down by half. That's just the truth of the game right now.

From my perspective as a profitable discretionary trader, in this market, the more volume you do, the more round turns you need to make, the worse your results. The only reason I traded more volume last year was a function of my position size, which went up around 3-4x on average.

The nature of the present day market is such that, if you know what you are doing, a trader can make 6 figures trading less than a million shares a month. That's 50k shares a day. The question is, can a prop firm survive with an office full of such traders, given rules of survivorship? If all the losing traders get weeded out eventually, how does a firm which takes no share of its winning traders profits continue to exist as volumes continue to fall? Call me nervous or paranoid, but I'm fully prepared to fall back on my IB account and 4x leverage the day my firm comes to tell me they need go to a mandatory 80-20 split, and consider my options from there.
 
Hi Maverick.


I traded at SWIFT a while back( yes I know, 2 cent stops, brutal pay out and platform that kept on freezing up etc...) it was a good start for a complete newb. Obviously that model has died.

Many here are wanting bigger pay outs= 100%
Large equity $10mil +
Education and quantifiable edge
Excellent infrastructure
NO deposit

I don't understand that one bit, if a place like that existed sign me up. Who is gonna give you an edge, money to trade it, and 100% of what you make?? How does the firm make money??

As a newb education is most important, SWIFT offered none except telling us what ECNS are and how order routing works... etc. I don't see how a firm could benefit in any other way than only hiring the guys with a track record and a proven edge??Unless you are trying to help out others out of your own good will.
 
Quote from Lucias:

Also the salary requirement is again just a basic fact thats what it cost to live. I mean go to a firm that doesn't offer a salary requires is a huge cost. Not worth it.
You would need at least 1 year of savings and then only get a split of your profits.. best just to trade own capital. Only way possible to see it is if they have a big edge and can prove they are pulling down mega bucks.
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Salary? That's for wimps and cowards. Those that want to be traders should move to Chicago with just a suitcase of clothes and a couple of hundred bucks. I mean Europeans did that 100 years ago when they came to America. Look at them now. All millionaires.
 
Quote from slavduja:

Hi Maverick.


I traded at SWIFT a while back( yes I know, 2 cent stops, brutal pay out and platform that kept on freezing up etc...) it was a good start for a complete newb. Obviously that model has died.

Many here are wanting bigger pay outs= 100%
Large equity $10mil +
Education and quantifiable edge
Excellent infrastructure
NO deposit

I don't understand that one bit, if a place like that existed sign me up. Who is gonna give you an edge, money to trade it, and 100% of what you make?? How does the firm make money??

As a newb education is most important, SWIFT offered none except telling us what ECNS are and how order routing works... etc. I don't see how a firm could benefit in any other way than only hiring the guys with a track record and a proven edge??Unless you are trying to help out others out of your own good will.
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it really is quite unbelievable isn't it? You would think someone who calls themselves a trader would at least be able to operate a calculator and figure out how the deal works.

I had a hard time believing 90% of traders lose, until I understood that 90% of traders are just like everybody else and are completely gulllible.

Makes you feel good when you realize the 90% you are competing against are complete idiots.
 
Quote from Lucias:

I can make more by offering subscriptions and trading my own account while working a normal 9-5. I already have one of the top futures systems at C2. There isn't anyone out there who can compete with me in the directional space and time will prove that. Its also less risky for me to trade my own money. This play a big role in my deciding to trade my own capital. .... I mean that even if a firm offers "firm capital" but not a salary then that means giving up a salary and also you need what 30k to 40k to survive.. Thats a lot of risk. Its more risk then trading my own money and you're not even own boss.

for the average joe who wants to take a swing with 10k or 50k then I'm the best shot in the world. I imagine there are more small fry with who want to take a shot then big guys anyway...

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I'd be highly suspect of someone who claims to be the best directional trader in the world while not knowing what firm capital is.
 
What are you talking about? I was already offered firm capital. I did the math and after splits it doesn't work out. To the people who say go to Chicago, first you probably haven't been very successful in life. I've not been hugely successful but I've had some modest success. If I were to take a proprietary job then I'd risk losing hundreds of thousands of dollars over the next 3-4 years!

Let me see... which makes more sense?

A. Do what I'm doing
Work and continue to make a salary, keep good benefits, etc.
Risk my capital in the market. If I lose then can make more money and try again. Keep 100% of profit. Invest it for future growth.
Do what I want with my trading and continue to develop a stronger franchise and ability to get more subscribers, more cash flow, etc

B. Go to a prop firm
Quit my job and give up a good salary and benefits for no salary and no benefits
Have someone else dictate how I trade and how much money I get to trade and when I fail. Use most profits for living expenses.
Give up my franchise, systems, and any ability to profit from them

On route A, I am assured success in time. It might be 5 years. It might be 10 years. It might be 15 years. Route B, I've given up control. There is no longer a guarantee of success because I won't have any money. The first rule of speculation is protect your capital.

For me, I'm very risk averse.. I rather risk everything in the futures market then risk a job in today's economy. Again, part of it is the path I chose was futures from the start due to PDT, etc..

If I were a stock trader then I might go to a prop firm but I'd still put up my own money b4 going to a firm. For one thing, a firm that can't pay a salary doesn't inspire confidence that they'll be around for too long.

Quote from jj90:

I'd be highly suspect of someone who claims to be the best directional trader in the world while not knowing what firm capital is.
More...
 
The perfect prop firm- low barrier for entry for beginners $1k upfront or $400 per month to learn how to trade in a small way with the ability to progress in size and later be allocated capital in different products with higher volatility.

Have low latency connectivity to global exchanges in any asset class. Whether CFDs on chi-x or asx or FX in dark mtfs, its own proprietary EMS hosted on its own multicore servers in global data centers across the world allowing for seamless penetration to any market with order processing measuring in the nano and microseconds.

Via its own EMS having a smart order routing mechanism which finds and seeks liquidity through its vast bank of sources both lit and dark. A resting mechanism to do the same on the other side. Proprietary algos and a plugin to custom build an algorithm in record time through its vast bank of strategies a plug and play solution for the hard trader that is not a programmer.

Managers to track your progress that really truly understand trading, the risks involved, and who is right for it and who is not. Understands how to drop traders like a gentleman, and reward the right traders in the right light. The company always has big opportunities for the biggest and most reliable thinkers. Managers are also paid only through pnl(10-30%) or 10% of desk/program fees whichever is greatest or chosen. Manager makes big money when the trader works out.

It has exchange memberships with all or most exchanges throughout the world. clearing at the best cost, everyone pays a fixed cost depending on the frequency of the trading. Depending on the cost 2-5x clearing. Money coming in from commissions goes to continuing education from qualified instructors teaching more advanced and scalable strategies. Of course this also covers the cost of the operation.

Have psychologists available on call 24 hrs a day to make sure our traders are not completely out of their minds. think oldtimer going through a severe crisis and is very depressed.

Physical office space in multiple locations globally in close proximity to to its servers at the exchanges we are looking to trade.

Have programmers available to put dreams into programs.

A dark stream data feed giving insight and price discovery to multiple products that are listed on multiple venues in order to capture opportunities in a fragmented order book. other proprietary real time reporting solutions for discovering opportunities.

did you mean real or dream prop firm?
 
The people who look for a prop are the ones who aren't profitable.

The profitable traders trade alone, why give away a certain amount of gains when you can keep 100%? That does not make sense.
 
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