Patriots Vs Ravens.
No, instead of my usual Brady role, I will be playing role of Ray Lewis while on my coach watching the game.
That HitnRun post has put me in Ray Lewis frame of mind (lol).
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The Perfect Prop Firm
- Thread starter Maverick74
- Start date
Patriots Vs Ravens.
No, instead of my usual Brady role, I will be playing role of Ray Lewis while on my coach watching the game.
That HitnRun post has put me in Ray Lewis frame of mind (lol).
Quote from mfbreakout:
Patriots Vs Ravens.
No, instead of my usual Brady role, I will be playing role of Ray Lewis while on my coach watching the game.
That HitnRun post has put me in Ray Lewis frame of mind (lol).
Now that this thread has gone on for a while, can someone add to the below points? What have we concluded or learned? I dont think I learned anything new.
Nobody is going to offer me or anyone here a "prop" role that is worth a damn,
Nobody is going to give me or you the right amount of capital to work as a professional- edge as Maverick puts it is a "trader"- no lines graphs colors etc.
The industry is on a down turn
Everyone has opinion
People like nice offices.
Quote from MBC:
Now that this thread has gone on for a while, can someone add to the below points? What have we concluded or learned? I dont think I learned anything new.
Nobody is going to offer me or anyone here a "prop" role that is worth a damn,
Nobody is going to give me or you the right amount of capital to work as a professional- edge as Maverick puts it is a "trader"- no lines graphs colors etc.
The industry is on a down turn
Everyone has opinion
People like nice offices.
I actually got what I wanted out of this thread. No offense to anyone who posted here because this comment is NOT directed at any one individual. But most of the guys here would never get hired at a real prop firm and most of the guys here would never get any kind of backing. I'm not trying to be a dick, but this business is 1000 times more competitive then most people on this website realize.
One of the required ingredients to be successful at anything in life is sacrifice. And I was curious what sacrifices one would be willing to make to achieve the freedom of becoming a successful trader. And the most per-dominant answer was, NOTHING. We pretty much live in a welfare state here in the US. We have been cottled to such a great extent that hard work and sacrifice is a fiction we read about in stories of old from our parents and ancestors. I've always suspected this of course having spent a great deal of time on this site, but this thread has pretty much confirmed what I already knew.
I hope others got some value out of it. But for me, I got exactly what I suspected I would get, the truth.
Quote from Maverick74:
I actually got what I wanted out of this thread. No offense to anyone who posted here because this comment is NOT directed at any one individual. But most of the guys here would never get hired at a real prop firm and most of the guys here would never get any kind of backing. I'm not trying to be a dick, but this business is 1000 times more competitive then most people on this website realize.
One of the required ingredients to be successful at anything in life is sacrifice. And I was curious what sacrifices one would be willing to make to achieve the freedom of becoming a successful trader. And the most per-dominant answer was, NOTHING. We pretty much live in a welfare state here in the US. We have been cottled to such a great extent that hard work and sacrifice is a fiction we read about in stories of old from our parents and ancestors. I've always suspected this of course having spent a great deal of time on this site, but this thread has pretty much confirmed what I already knew.
I hope others got some value out of it. But for me, I got exactly what I suspected I would get, the truth.
What scarifies prop firms are looking for? Can you elaborate.?
I think it is a two way street. A prop firm looking for sacrifice only from incoming traders not going to get TOP TALENT and traders without anything to offer will keep on searching.
Prop firms may get 1000 of resumes but fight for TALENT is equally 1000 times competitive. Otherwise every Tom , Dick and Harry with capital and some prop firm structure will place an ad and just watch the TALENT roll in.
Also, I always wonder why model of firms like First new York Securities etc.. seems to be different from prop firms talked about in this thread. Maybe it is just my perception.
All top tier firms I know of does not require trading capital, they only want trading stats from experienced traders- traders who have been at it lets say for 3 or more years.
Not sure what special scarifies these new hires at these firm are making.
Mav,
I have been wanting to ask you a question and maybe this is a good thread to ask that question. You have mentioned elsewhere that a good prop trader at a pure futures firms in Chicago might have upto 50mm intra-day notional exposure limit. Also, you mentioned that most of these futures traders won't get backing if they are trading 'primarily' direction.
Q1. I infer you are saying that such notional limits will be extended to traders who are doing spreads or basis trading, but not punting on direction of Euro for example. Why, especially if trader has a 'method' to punt euro intraday and his performance has been good?
Q2. How much limit can a trader expect to get if he is punting euro intra-day with a method. Intra-day doesn't mean in reference to US hours but opening and closing trades within 24 hrs, as FX trades round the clock.
Q3. What does it take to reach that level when a firm will extend you 50mm notional to trade? What kind of stats a typical Chicago futures firm will be interested before they extend you that kind of money to punt/trade Fx intraday. Also, what kind of profit split is possible, assuming 0 salary, in FX world ?
Thanks v much.
I have been wanting to ask you a question and maybe this is a good thread to ask that question. You have mentioned elsewhere that a good prop trader at a pure futures firms in Chicago might have upto 50mm intra-day notional exposure limit. Also, you mentioned that most of these futures traders won't get backing if they are trading 'primarily' direction.
Q1. I infer you are saying that such notional limits will be extended to traders who are doing spreads or basis trading, but not punting on direction of Euro for example. Why, especially if trader has a 'method' to punt euro intraday and his performance has been good?
Q2. How much limit can a trader expect to get if he is punting euro intra-day with a method. Intra-day doesn't mean in reference to US hours but opening and closing trades within 24 hrs, as FX trades round the clock.
Q3. What does it take to reach that level when a firm will extend you 50mm notional to trade? What kind of stats a typical Chicago futures firm will be interested before they extend you that kind of money to punt/trade Fx intraday. Also, what kind of profit split is possible, assuming 0 salary, in FX world ?
Thanks v much.
Quote from MBC:
People like nice offices.
[/B]
This comment has more weight than many might imagine. In the '70s huge quantities of over-the-counter shares were pumped up and retailed to European investors ... mostly Germans. The competition for top salesman was intense and the money was huge for the salesmen and of course for the house. Every transaction was a principal transaction and the markup on product was astronomical -- sometimes in excess of 1000%.
One of the Munich based firms setup in a decent hotel, The Arabrella House, and put the word out that the room service spigot was open. The location was ideal, it was a congenial atmosphere for certain personality types and if you wanted steak and eggs when you got in you just picked up the phone and if you wanted a split of champagne with your steak at lunch just order it. In weeks they built a first rate sales staff of heavy hitters without paying a penny more on the split. While the room service tabs added up, as a percentage of sales it meant nothing. In order to compete other firms began to move into the same hotel and offered the same deal. But it was too late -- first mover advantage counted even before the net.
I'm not suggesting the same tactics would work for a prop firm. Good traders (while sometimes mad men) are less likely to be distracted by bright shiny objects. But people do respond to environments they feel truly comfortable in and, since I suspect the best ad for a prop firm is the fact that the traders who are already working there are happy, all sorts of factors that do not relate to the hard numbers can count on the margin. I spent $600 on a chair after trading for a week using a standard office chair and wouldn't go back to the old chair for $6,000. If you are coughing up a first class deal luxury is not a prereq but comfort is. Make 'em happy to come to work and they'll come to your shop to work.
Quote from Maverick74:
Because it doesn't work that way. LOL. First of all, there is no such thing as a successful strategy, only successful traders. Unless you have a technological edge or order flow edge, you are taking risk. And figuring out the best way to interpret squiggly lines on a chart and when they cross each other and whether or not a doji candle shows up next is not an edge. Most of us who have been in this business for 15 years know that.
All strategies have to be "executed". Let me say this again because it's really really important. All strategies have to be executed. This execution part is the real reason why traders fail, not the squiggly lines. A good trader is like a good baseball hitter. All guys in MLB can hit. But not every one of them can hit under pressure in the bottom of the 9th inning with the bases loaded and 0-2 count. Prop firms look for guys that can execute. They are very rare. There is very little value in the strategy itself.
Now, if you are a programmer and you have 100k lines of code that allows for nano second market making on international stocks that are illiquid, that has some value. However, that code falls under intellectual property and you can sign a contract protecting that code. But the idea that some firm is going to watch you put up charts and trade off technical analyses and say, we have to fire that guy and take his charting signals, well, that's just laughable. It's simply not how this business works.
Everyone can push a button and execute a trade, it's no big deal.
Anyway it shows that this is definately not the business for me.
Also, all of this has IMHO the wrong focus. Because what I do most care about is how to get the most profit out of the existing risk capital using the least amount of risk. Many prop firms have other interests like "Who has a Ph.D. title".
Quote from ProTrader432:
Everyone can push a button and execute a trade, it's no big deal.
Anyway it shows that this is definately not the business for me.
Also, all of this has IMHO the wrong focus. Because what I do most care about is how to get the most profit out of the existing risk capital using the least amount of risk. Many prop firms have other interests like "Who has a Ph.D. title".
Pushing a button has NOTHING to do with execution. The fact that went over your head proves your theory correct. This business is definitely not for you.
Quote from Maverick74:
I actually got what I wanted out of this thread. No offense to anyone who posted here because this comment is NOT directed at any one individual. But most of the guys here would never get hired at a real prop firm and most of the guys here would never get any kind of backing. I'm not trying to be a dick, but this business is 1000 times more competitive then most people on this website realize.
One of the required ingredients to be successful at anything in life is sacrifice. And I was curious what sacrifices one would be willing to make to achieve the freedom of becoming a successful trader. And the most per-dominant answer was, NOTHING. We pretty much live in a welfare state here in the US. We have been cottled to such a great extent that hard work and sacrifice is a fiction we read about in stories of old from our parents and ancestors. I've always suspected this of course having spent a great deal of time on this site, but this thread has pretty much confirmed what I already knew.
I hope others got some value out of it. But for me, I got exactly what I suspected I would get, the truth.
Maybe it's me, and I just don't understand the point of "prop for hire" in the first place.
If you know how to trade, why do you need to get hired?
If you know how to trade, why do you need backing?
If you know how to trade, why quit trading, in order to run a prop firm?
If you DON'T know how to trade, why do you need to apply to a firm that doesn't know how to trade in today's market? How will that help you learn?
I'm not trying to be a dick either, but I still don't understand the concept of "hiring" and "backing" traders at the individual prop level. When it comes to discretionary traders, why does anyone who knows what they are doing need to get outside funding in the first place? Why would anyone who DOESN'T know what they are doing deserve to get hired in the first place? It seems to me that there is only one sweet spot where the trader and prop firm co-exist for mutual benefit, and that's a matter of leverage as a developing trader first begins to scale up his edge. But beyond that, where does the relationship go?
You are right in that this game is all about sacrifices. The real sacrifice of a trader is TIME -- doing it on your own, taking years and spending thousands and thousands of hours in front of the screen. When you truly make this sacrifice, you don't need some firm of ex-traders telling you if you can or cannot trade. You just go out and do it. If you want to sacrifice a piece of your future for the sake of accelerating growth, go for it by all means. But this seems to me to be the only true reason for prop to exist -- the "wish list" being all but moot.
Quote from gmst:
Mav,
I have been wanting to ask you a question and maybe this is a good thread to ask that question. You have mentioned elsewhere that a good prop trader at a pure futures firms in Chicago might have upto 50mm intra-day notional exposure limit. Also, you mentioned that most of these futures traders won't get backing if they are trading 'primarily' direction.
Q1. I infer you are saying that such notional limits will be extended to traders who are doing spreads or basis trading, but not punting on direction of Euro for example. Why, especially if trader has a 'method' to punt euro intraday and his performance has been good?
Q2. How much limit can a trader expect to get if he is punting euro intra-day with a method. Intra-day doesn't mean in reference to US hours but opening and closing trades within 24 hrs, as FX trades round the clock.
Q3. What does it take to reach that level when a firm will extend you 50mm notional to trade? What kind of stats a typical Chicago futures firm will be interested before they extend you that kind of money to punt/trade Fx intraday. Also, what kind of profit split is possible, assuming 0 salary, in FX world ?
Thanks v much.
Here is my advice. If you want to be a directional trader, you need to use notional capital, not leverage. This means you need to become a CTA or start a fund or become an RIA. Leverage and direction are like oil and water, they don't mix.
These firms trade give guys 50 million in exposure are trading the basis trade. The basis being the spread between cash and futures in any given market, usually debt. And 50 million is actually on the low side. That's only a 50 lot on the EuroDollar. Most the trades there go off in 1000 lots, not 50's. But I digress.
The bottom line is, if you want to trade a size book in the prop wold, you are going to want to have an absolute return strategy. In other words, market neutral, market making, HFT, stat correlation, arbitrage, dispersion, etc.
Let me ask you this. Say I have a firm, Maverick Capital. And I hire 50 guys to come in and directionally trade futures. Now, they can trade anything for the most part, but usually they are all going to trade what's moving and what's liquid so that really narrows it down. We can basically create a tri-nomial tree right? There are 3 possibly trades they can have on if they are trading direction, let's say the Euro as you mentioned. They could be long, short or flat. Let's say the Euro is really breaking out. And I give each guy a 10 contract limit. Let's say two guys are flat because they want to be short and it's strong now. But the other 8 guys are all long. So 8 guys long 10 Euros each. So as an entire firm, we are basically in one position, we are long 80 lots of the Euro. Why can't I just buy 80 lots of the Euro myself? I'm a good trader. I see it breaking out. Why do I need 8 to 10 guys all doing the exact same thing. And simply using a plain vanilla strategy of punting on the direction of the Euro? And what if the Euro goes down? Say a rumor comes out of the ECB and it suddenly drops 100 pips. I've got the entire firm all loaded up in one direction. That's not going to work and no one is going to pay you to do that. Like I said, I'll just buy some Euro as the partner and not hire these 10 other traders. The math just doesn't work.