Trading firms-profit splits- is this the new norm? Any advise, Please

G

gimp570

I starting trading in 1999. I have the series 7,55,56,63,66. I traded with Prop firms from 1999--2010. Just paid commissions and paid for my own quotes. I always got paid 100% of what I made. i started out trading from an office which was GREAT. But soon after I had to start trading from home. It was the greatest job in the world! But then I just stopped making money. I hung on until 2010 then I had to find a job. I was thinking/hoping with this new Bull market maybe intra-day trading might be heating up. I found out about an office that opened in my area. I just called them and they said they have 80-20 split. But with a split like that ..it really seems almost impossible to make any money in the long run. I am paying commissions on every trade, plus other fees and then have to give up 20% of profits?? I know it is hard to make money every month. That does not seem like it is a feasible way to make money long term. Is this the norm now? I would love to get back to trading full time but if splits like these are the way the game has gone then..man that seems like a tough way to make money.

Any advise that anyone could provide would be greatly appreciated.



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Quote from gimp570:

I starting trading in 1999. I have the series 7,55,56,63,66. I traded with Prop firms from 1999--2010. Just paid commissions and paid for my own quotes. I always got paid 100% of what I made. i started out trading from an office which was GREAT. But soon after I had to start trading from home. It was the greatest job in the world! But then I just stopped making money. I hung on until 2010 then I had to find a job. I was thinking/hoping with this new Bull market maybe intra-day trading might be heating up. I found out about an office that opened in my area. I just called them and they said they have 80-20 split. But with a split like that ..it really seems almost impossible to make any money in the long run. I am paying commissions on every trade, plus other fees and then have to give up 20% of profits?? I know it is hard to make money every month. That does not seem like it is a feasible way to make money long term. Is this the norm now? I would love to get back to trading full time but if splits like these are the way the game has gone then..man that seems like a tough way to make money.

Any advise that anyone could provide would be greatly appreciated.



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Does every firm that offers leverage take a % of the profits? What is the rage of that %?
Boy trading has changed. And I dont think for the better
 
Everyone knows stupid people can trade. You demonstrate this.

Seriously.
80% split - and you say it is impossible to make money with this?

Some intelligence: you have to make money for the company to make 20%. Because it is split of profits, not of "profitable trades". So, if you make money you now make 20% less -but you STILL make money, so stop demonstrating you are a demagoge or an idiot by stating it is impossible to make money like this.

It is a change in business model - often accompanied with lower costs. Companeis want to earn SOMEWHERE and some see that the lowest possible transaction cost is beneficial for both.

Or: the total cutthroat competition for lowest cost is over, companies demand actually to have a fair share of the profits from traders.
 
Jeeze thanks for your kind words!
I know how hard it is to make money trading. And how many traders have washed out. Most of them! Now making 20% less every positive month. That just makes the challenge of trading for a living much harder day in and day out.






Quote from NetTecture:

Everyone knows stupid people can trade. You demonstrate this.

Seriously.
80% split - and you say it is impossible to make money with this?

Some intelligence: you have to make money for the company to make 20%. Because it is split of profits, not of "profitable trades". So, if you make money you now make 20% less -but you STILL make money, so stop demonstrating you are a demagoge or an idiot by stating it is impossible to make money like this.

It is a change in business model - often accompanied with lower costs. Companeis want to earn SOMEWHERE and some see that the lowest possible transaction cost is beneficial for both.

Or: the total cutthroat competition for lowest cost is over, companies demand actually to have a fair share of the profits from traders.
More...
 
Quote from gimp570:

Jeeze thanks for your kind words!
I know how hard it is to make money trading. And how many traders have washed out. Most of them! Now making 20% less every positive month. That just makes the challenge of trading for a living much harder day in and day out.
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Yes, but "making a profit" is not "making enough profit to live". A 20% split wont make it harder to make a profit - just the profit will be 20% smaller.

That said, it really depends. I can see the point of the companies here (running one myself). And "hard" is relative ;) 20% is not a lot - if you would talk of a fib step up or something. 205 just means trading 20% more.
 
Really!! Only 20% smaller!! That's it?? NO big deal, right?? You sound like a fool!


Yes, but "making a profit" is not "making enough profit to live". A 20% split wont make it harder to make a profit - just the profit will be 20% smaller.


Quote from NetTecture:

Yes, but "making a profit" is not "making enough profit to live". A 20% split wont make it harder to make a profit - just the profit will be 20% smaller.

That said, it really depends. I can see the point of the companies here (running one myself). And "hard" is relative ;) 20% is not a lot - if you would talk of a fib step up or something. 205 just means trading 20% more.
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Quote from gimp570:

Really!! Only 20% smaller!! That's it?? NO big deal, right?? You sound like a fool!


Yes, but "making a profit" is not "making enough profit to live". A 20% split wont make it harder to make a profit - just the profit will be 20% smaller.
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Compared to you being a moron?

Here is the deal: if as a trader you make so few money that 20% less put you in jeopardy you SHOULD NOT BE A TRADER.

If you cut my income by 20% then my standard of living would not change. Not a bit. I may put less into reserves but that is it. It would not even hit my retirement planning - that has been closed a long time ago and the money is safely waiting aside.

20% less per risk factor only means increasing your risk by about 25% to make that back. In a world where prop shops progress their traders by doubling their clip size a 25% increase is not even one progression band.

Trade larger, build up your account JUST 25% more, and you have it balanced.

You know there are traders that live - well - on way less than 80% payout? Because - among other factors - they focus on the RIGHT thing. Making enough before the cut.

So, baby, stop whining. People decided to get paid for their work, not just have you have an easy walk in the park. Deal with it like a man.

Especialyl as - for a trader - that should not make a hugh difference unless you are totally incapable of adjusting.
 
You can get much lower commissions with a proft split. It's not a scam, just figure out what's best for you ... some places still give 100% payout, too.
 
Quote from NetTecture:

Compared to you being a moron?

Here is the deal: if as a trader you make so few money that 20% less put you in jeopardy you SHOULD NOT BE A TRADER.

If you cut my income by 20% then my standard of living would not change. Not a bit. I may put less into reserves but that is it. It would not even hit my retirement planning - that has been closed a long time ago and the money is safely waiting aside.

20% less per risk factor only means increasing your risk by about 25% to make that back. In a world where prop shops progress their traders by doubling their clip size a 25% increase is not even one progression band.

Trade larger, build up your account JUST 25% more, and you have it balanced.

You know there are traders that live - well - on way less than 80% payout? Because - among other factors - they focus on the RIGHT thing. Making enough before the cut.

So, baby, stop whining. People decided to get paid for their work, not just have you have an easy walk in the park. Deal with it like a man.

Especialyl as - for a trader - that should not make a hugh difference unless you are totally incapable of adjusting.
More...

The split he's referring to is closer to a tax. And that does have repercussions on the risk reward of his strategies. so it does have an impact on his trading.

Asking him to increase his leverage to offset this slippage is poor risk management.
 
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