Transitioning from Retail Trading to Prop Firm?

[spectastic]

why would it matter what time and place you enter the trading world? a good trader who lasts should be able to adapt to all market environments.

also, i've read that it's stressful and people burn out. why is that? I feel like the best traders are able to detach their emotions from the p/l and focus on the game, and treat the p/l as a % not $ amount. so if you're managing risk, making more than you're losing, and studying yourself and developing good habits, wouldn't that make trading fun and fulfilling rather than stressful? help me understand this please

 

[marketpro]

I am a returning Trader from years ago. Like this info....good points and conversation. Has anyone dealt with ifundtraders.com ? and have any good or bad experience's? Thank you all for the past valuable leads and info.

 

[qlai]

i've read that it's stressful and people burn out. why is that? I feel like the best traders are able to detach their emotions from the p/l and focus on the game, and treat the p/l as a % not $ amount. so if you're managing risk, making more than you're losing, and studying yourself and developing good habits, wouldn't that make trading fun and fulfilling rather than stressful? help me understand this please

I can only give you my opinion. Have you heard of Hedonic Treadmill? Why can’t you be happy with your current job, right?
What you said above is possible, imho, if you don’t press your account too much. But most traders use significant leverage in a highly manipulated and chaotic environment. That’s why many traders withdraw “excess” funds from their trading accounts at the end of the year and start from “base” capital. Or they trade with such small percentage of their net worth, that it just becomes another form of entertainment.

 

[tonyf]

Anybody can get reasonable returns in a bull market and 40% is nothing to an active trader unless managing well into the millions. Consider the path to becoming a skilled trader not unlike the time and effort required to become any kind of high level professional plus psychological considerations not as vital in others. If you are looking for a salary, your science credentials may get you into the door of an investment bank or managed fund but don't expect them to let you trade until you have learned the skills and behaviors necessary.

How this statement slip unchecked?

"40% is nothing to an active trader unless managing well into themillions.
"

 

[speedo]

why would it matter what time and place you enter the trading world? a good trader who lasts should be able to adapt to all market environments.

also, i've read that it's stressful and people burn out. why is that? I feel like the best traders are able to detach their emotions from the p/l and focus on the game, and treat the p/l as a % not $ amount. so if you're managing risk, making more than you're losing, and studying yourself and developing good habits, wouldn't that make trading fun and fulfilling rather than stressful? help me understand this please

You are correct, people stress for many reason but the main reasons a trader would stress is A. They don't know what they are doing. That is they have not done the work to understand price behavior and develop and test methodology which gives them an edge and which includes defined signals and attendant rules and B. They are emotionally invested and focused on the outcome of trades rather than the process of trading. Those traders tend to see a loss as a failure or a mistake or "the market is out to get me", thus causing stress. Losses are unavoidable and are part of the business. The experienced profitable trader enjoys the process of trading because he or she knows they have an edge and any individual trade or series of trades is irrelevant to success given taking their signals and observing the rules of the trade.

 

[tonyf]

Spectastic,

There are a lot of models out there. We have several models even within our firm (Kershner Trading). When we started we primarily had short term discretionary traders with no salary. That is still the case today. About half of those traders run quantitative models in addition to their discretionary trading. For entry level traders we sometimes supply a stipend type salary for a year or two.

Over the years we added other types of traders. We have salaried classical hedge fund type traders that are focused more on swing trading and long/short. We have salaried quants as well. We have salaried analysts and do joint trades with them. In general, a firm and trader have to match the salary and payouts with the type of trading, capital needs, and psychology of the trader/quant. The more capital and time needed for trades generally commands a better split for the firm as there is more at risk. The best thing you can do is join a firm where you will get good mentoring, technology, capital, and are around really good traders that are working at getting better every day. I would want to join a firm that has many traders that have grown to be million dollar traders. It is not easy and my experience in training new traders is that about 20% of the candidates that we invite to join us make it long term. Being physically on the floor with other traders will help a learning process. Perhaps there are some good firms in your town. If not, it might be worth finding a local trader to mentor and back you.

Good trading to all,

Andy Kershner

Say I bring USD 10m to the table in personal funds, 15ys investment bnking experience and 3 yr personal investing track record fully documented. What can I expect from you?

 

[speedo]

How this statement slip unchecked?

"40% is nothing to an active trader unless managing well into themillions.
"

Many on ET confuse investing with full time active trading. I speak as a day trader using reasonable margin leverage. If someone is satisfied with 40% or 20% or whatever, then more power to them. It's not for me or anyone in here to determine someone else's standards or expectations.

 

[trade4succes]

why would it matter what time and place you enter the trading world? a good trader who lasts should be able to adapt to all market environments.

Strategies can get (temporarily or not) out of favor. Let's say a newbie gets a job at a trading firm highly specialized in, let's say, event driven strategies, right at a time when there is no money to be made there for the next year. Obviously seeing nobody making money, nor making money themselves, can lead to discouragement and switching over to another strategy might not always be possible in this environment. A seasoned trader might just sit it out, but harder for the beginner, especially if they gave themselves limited time. Same can happen for getting hired by a particularly bad boss, or a team that just doesn't jive..

 

[marketpro]

Speedo, I like your response and agree that Trading professionally is all about the process. Most people are not comfortable making decisions when they don't have complete information, and dealing with the results and then when things don't go as planned fall apart.

 

[speedo]

Speedo, I like your response and agree that Trading professionally is all about the process. Most people are not comfortable making decisions when they don't have complete information, and dealing with the results and then when things don't go as planned fall apart.

Much of what I've learned comes from hitting blind alleys but also from smart people like Mark Douglas who speaks to the process vs outcome dynamic.