how many times do I have to tell you this? I can make 20% a year and I have the track record to prove it. So how much do I need to make a living full time? More than I have. So where do I go? To a prop firm. Yes I give up some of the profits, but I get a whole lot more buying power than the margin my retail broker will give me.
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The Perfect Prop Firm
- Thread starter Maverick74
- Start date
Quote from oldtime:
how many times do I have to tell you this? I can make 20% a year and I have the track record to prove it. So how much do I need to make a living full time? More than I have. So where do I go? To a prop firm. Yes I give up some of the profits, but I get a whole lot more buying power than the margin my retail broker will give me.
Of course when you got more money to trade, the potential profits are higher, that's true.
But keep in mind that you also can get intraday leverage as a retailer. For example, if you trade at Tradestation, you get 5:1 intraday and 2:1 overnight. So if you deposit 50k, that's 250k intraday buying power which is quite high.
well hell yes, you can get 40 to 1 trading forex, but we are talking about poor stock traders who struggle to come up with 25k and the best they can get is 50% margin.Quote from ProTrader432:
Of course when you got more money to trade, the potential profits are higher, that's true.
But keep in mind that you also can get intraday leverage as a retailer. For example, if you trade at Tradestation, you get 5:1 intraday and 2:1 overnight. So if you deposit 50k, that's 250k intraday buying power which is quite high.
1. Access to co-located infrastructure.
2. Low comms.
3. Leverage.
4. No salary (to keep certain people away).
Split and desk don't matter as much as 1-4.
2. Low comms.
3. Leverage.
4. No salary (to keep certain people away).
Split and desk don't matter as much as 1-4.
Suppose a single guy lives in NYC (or Boston or Chicago) and it costs him $100K (take home not gross) to lead an almost comfortable middle class life and he has $250K buying power. And some could make a case the almost comfortable is a stretch ... not quite comfortable might be a better description. If he has a 65% strategy after he pays Fed, State & City tax he covers his nut and adds ZERO to his trading capital. With a 50% strategy he needs to skip lunch twice a week to cover and donate the painting Aunt Betsy left him that is worth maybe $400 and buy an appraisal pegging it at $30K so he cuts the tax bite.
How hard is it to understand he needs not just more leverage but a good deal more leverage JUST TO SURVIVE! To not understand that the prop equation is essential for some traders is to not be able to do fifth grade math. The trader described cannot make the numbers work without prop. The fact is the $250K in buying power is, for many, not "quite high".
If he moves and cuts his personal nut to $70K he can add $30K a year to capital. Not a great equation and he has moved away from family friends etc. When you need to gear it up prop makes a great deal of sense unless of course fifth grade math makes no sense to you. I know I must sound old and cranky (probably because I am old and cranky) but it really gets wearing to have a thread with value clogged up with people who can't do 2+2 without it adding to 3.547.
How hard is it to understand he needs not just more leverage but a good deal more leverage JUST TO SURVIVE! To not understand that the prop equation is essential for some traders is to not be able to do fifth grade math. The trader described cannot make the numbers work without prop. The fact is the $250K in buying power is, for many, not "quite high".
If he moves and cuts his personal nut to $70K he can add $30K a year to capital. Not a great equation and he has moved away from family friends etc. When you need to gear it up prop makes a great deal of sense unless of course fifth grade math makes no sense to you. I know I must sound old and cranky (probably because I am old and cranky) but it really gets wearing to have a thread with value clogged up with people who can't do 2+2 without it adding to 3.547.
Quote from ProTrader432:
Of course when you got more money to trade, the potential profits are higher, that's true.
But keep in mind that you also can get intraday leverage as a retailer. For example, if you trade at Tradestation, you get 5:1 intraday and 2:1 overnight. So if you deposit 50k, that's 250k intraday buying power which is quite high.
I hear ya, the world took a giant step backwards when they moved from Texas Instruments Calculators to I pads.Quote from Swan Noir:
Suppose a guy lives in NYC (or Boston or Chicago) and it costs him $100K (take home not gross) to lead an almost comfortable middle class life (with two kids read $125K WITHOUT private school) and he has $250K buying power. If he has a 60% strategy after he pays Fed, State & City tax he covers his nut and adds ZERO to his trading capital. With a 50% strategy he needs to skip lunch four times a week
How hard is it to understand he needs not just more leverage but a good deal more leverage. To not understand that the prop equation is essential for some traders is to not be able to do fifth grade math. The trader described -- without kids -- cannot make the numbers work without prop. The fact is the $250K in buying power is, for many, not "quite high".
If he moves and cuts his personal nut to $70K he can add $30K a year to capital. Not a great equation and he has moved away from family friends etc. When you need to gear it up prop makes a great deal of sense. Unless of course fifth grade math makes no sense to you. I know I must sound old and cranky (probably because I am old and cranky) but it really gets wearing to have a thread with value clogged up with people who can't do 2+2 without it adding to 3.547.
otherwise, stock trading is for us old coots who use to watch Wall Street Week with Louise Rukheiser on PBS from Owens Mills Maryland.
Any young kid that is still doing it is lost in the past. Have you ever watched CNBC when they film from the floor of the NYSE? Aint nothing left but us oldtimers.
Get the hell out of the city, move someplace cheap, trade futures or forex and get the margin you need plus the favorable cap gains, that's how all successful bussiness's do it, that's why we don't make I pads in NYC.
but still, on a weekend it's nice to dream about what working at a good prop firm would be like if we were still living in the good old days.
Quote from PARACLESE:
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?
Finally some one put my ideas about PERFECT PROP FIRM into words. Thanks. I would like to have talent like following at my ideal FIRM . Even KING OF TRADING like Adam in this example, need 14 months training. Adam and traders like him seems to rely heavily on INTUITION. I can not focus on 50-100 names yet, so for me it is CRUDE OIL ONLY and I do have some INTUITION when it comes to CRUDE OIL after 4,000 hours . I am a slow learner (lol).
A year ago we called Adam Guren â age 28 â the Lebron James of trading. Given his consistent success like King James, Adam was the obvious choice for the top spot on our first annual list.
After graduating Duke in 2003, Adam played professional soccer for a season with the Cleveland Force before starting in the prestigious training program at First New York Securities. After a 14 month apprenticeship, Adam started trading his own book while expanding his focus from Europe to Asia.
Now, Adam focuses on global stocks. His day looks much like a British colonelâs when the sun never set on the British Empire. But with patience and discipline, Adam finds a way to replicate his success in multiple markets. He starts his process by logging on premarket. Then he spends approximately an hour, sometimes thirty minutes, seeing if thereâs news out in the basket of stocks he follows. This is how he figures out if thereâs any opportunities because he looks for newsworthy events that are going to move his stocks.
When I asked Adam about how he makes his moves, he said:
Iâm not a technician and I really donât study charts. Thatâs not to say I wonât look at them to see where things are. At the same time, Iâm not a big fundamental guy based on the nature of how long I hold a position. I mean, I do understand the fundamentals of each stock and what people generally expect, but for the most part I rely heavily on intuition and the feel I have for a stock based on watching it for so long. After watching the same 50-100 names, you start to easily understand how they trade and what moves them. Itâs pattern recognition.
Another key to Adamâs success is his risk management:
Every trade I get into I have a very good understanding of the risk-reward. One of the keys to success is measuring risk-reward. And one of the best ways to do that, as elementary as it sounds, is to buy low and sell high. So you want to buy when things are beat up and sell when things are overdone on the upside. Iâd say I do a good job of measuring risk. Itâs probably one of the main reasons why I am successful at trading.
Although this sounds very basic, itâs obviously easier said than done. Given that over 85% of traders lose money, Adam has proven that mastering the fundamentals is the key to success as a professional trader.
If you would like to nominate traders for future awards, please send us an email or comment below.
Read more: http://www.businessinsider.com/meet...der-first-new-york-securities-3#ixzz1kCEpJTVv
Hi Maverick 74,
You are always thinking. Thanks for the Thread. FUCK that HITnRUN coward. Let me know when he shows up at your office.
ON A SIDE NOTE: Some traders are making a case why it does not make sense to trade for a firm. All, I know top talent work for a firm or they start their own firms after working at a firm. There are always exceptions , a usual.
I actually intended my advanced age to be only a minor point not my central theme ... lol.
Quote from oldtime:
I hear ya, the world took a giant step backwards when they moved from Texas Instruments Calculators to I pads.
otherwise, stock trading is for us old coots who use to watch Wall Street Week with Louise Rukheiser on PBS from Owens Mills Maryland.
Any young kid that is still doing it is lost in the past. Have you ever watched CNBC when they film from the floor of the NYSE? Aint nothing left but us oldtimers.
Get the hell out of the city, move someplace cheap, trade futures or forex and get the margin you need plus the favorable cap gains, that's how all successful bussiness's do it, that's why we don't make I pads in NYC.
but still, on a weekend it's nice to dream about what working at a good prop firm would be like if we were still living in the good old days.
it aint that funny, when you become old, you become a minority, and it gives you a lot more empathy for other minorities.Quote from Swan Noir:
I actually intended my advanced age to be only a minor point not my central theme ... lol.
otherwise, it's a free market and a level playing field
but getting back to the original question, prop like everything else is going to have to give up a few things to stay viable.
Mav wants to make big money like his boss did. Don't we all? Those days are over.
The only place left to make the same kind of money we made in the good old days is independent trading. No limits, no fees, nobody to blame but yourself.
Quote from SteveNYC:
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.
I was joking in case you didn't get it. Lucias' post regarding salary and such are most realistic. Most of the other posts are from dreamers.