What must I know before joining Prop firm?

Quote from jimclark:

Do any prop firms force their own trading strategy?
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Our traders are independent, and can do what they like (within standard risk parameters, of course). We do tend to "lead by example" and share our working strategies with our people.

I know that some of the employee type prop firms tend to be a bit more strict.

Don

BTW, everyone read my note in the Chit Chat section about AARP/Hartford Outrage. Especially those over 50.

Don
 
A lot of prop firms are basically franchises, where the owner of a particular branch has a very large degree of freedom as to how he runs things. This means that two branches within the same company can be hugely different. Swifttrade is an example of this. Every office is different.

With this in mind it isn't enough to just find a reputable firm to join, you'll need to find a good office. I'll use Swift as an example again. There are some Swift branches where the office manager knows what he's doing and his experienced traders are doing well. There are some branches where this isn't the case.

Ultimately, you just gotta find a place where people are making good money. If the traders are making money it's a good office. If the traders aren't making money it isn't a good office.

How can you tell? Thats tricky. I'd say if a lot of people are getting yelled at and theres a sense of nervous desperation it's probably sketchy. If you walk in and the manager is in the process of trading himself and you see a bunch of guys chillin and looking like they know what they're doing thats a good sign.

Me, I just got lucky and hooked up with a great crew despite not knowing any of this when I started. God help me if I had ended up in some of the operations I've heard about...
 
Quote from Fistfull:

A lot of prop firms are basically franchises, where the owner of a particular branch has a very large degree of freedom as to how he runs things. This means that two branches within the same company can be hugely different. Swifttrade is an example of this. Every office is different.

With this in mind it isn't enough to just find a reputable firm to join, you'll need to find a good office. I'll use Swift as an example again. There are some Swift branches where the office manager knows what he's doing and his experienced traders are doing well. There are some branches where this isn't the case.

Ultimately, you just gotta find a place where people are making good money. If the traders are making money it's a good office. If the traders aren't making money it isn't a good office.

How can you tell? Thats tricky. I'd say if a lot of people are getting yelled at and theres a sense of nervous desperation it's probably sketchy. If you walk in and the manager is in the process of trading himself and you see a bunch of guys chillin and looking like they know what they're doing thats a good sign.

Me, I just got lucky and hooked up with a great crew despite not knowing any of this when I started. God help me if I had ended up in some of the operations I've heard about...
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Thanks for sharing Firstfull -
Don Bright in some of his messages mentioned his traders trade remotely...so there is no office per se or at least a just a handfull.

Is it good or bad if most traders trade remotely?

Thanks.
 
FWIW...my thoughts on remote.

Almost all of the consistent moneymakers I know trade remote by now. Obviously, the ever increasing rate of technological advances have had a major effect.

The 'own-account' or proprietary trader...I prefer this over the dated 'day trader' moniker is on the cutting edge of changes in the way people will be working in the future.

One of my old colleagues moved to Australia...surf by day, trade NYSE by night! Technologically it is better than being in the ol' Brown Bros Harriman building near the Exchange twenty years ago.

I remember sitting next to a guy at a very well known prop firm that had 4 monitors wrapped around him, and 90 Level2 open at all times! He would show up with a plastic bag and proceed to eat what seemed as all the foods that crunch! After a few weeks, I told him to either take up bananas (less noisy) or move and set up his monitors in the utility closet...or, risk becoming a human roof test dummy.

At the time I was living in a 1920's era home in Los Angeles, the neighborhood was only supported by DSL, the office had more appeal, the drive to the office to do my routine prior to the open was a drag. I got to be on a first name basis with the LAPD motorcycle cop with the hand held radar on Olympic Blvd.

Once I had access to a cable modem I liked the remote or home warroom setup much more. My firm's risk manager and IT people are an instant message away.

Having started in investment banking in 1986 using a shared Quotron and Lotus 123 I can tell you the average prop trader has more resources available today than the top tier investment banks had back then. The buy low, sell high thing is still pretty much the same.
 
Well, you need to make sure you have a network of traders that you can connect with if working remotely. I recommend you start from an office and work there for a year before going remote as it is a different ball game on your on. I would avoid firms that are sub LLCs as I have heard bad things.

Check the trading platforms out; get demos or sit ins with their a trader using it....Remember this will be your personal ATM machine for the rest of the your trading experience so it should be easy to use. Look for things like DDE linking, support Active-X controls, can you get access to a FIX connection, trade currencies, futures, options, and stocks thru the platform?

Easy to check statements thru the clearing firm of the prop shop? Some sub llcs won't allow you to see a monthly statement and not daily.

Remember when you start out; commissions aren't as big of a deal as a good shop with a great support structure.
 
Quote from anvil993:

FWIW...my thoughts on remote.

Almost all of the consistent moneymakers I know trade remote by now. Obviously, the ever increasing rate of technological advances have had a major effect.

The 'own-account' or proprietary trader...I prefer this over the dated 'day trader' moniker is on the cutting edge of changes in the way people will be working in the future.

One of my old colleagues moved to Australia...surf by day, trade NYSE by night! Technologically it is better than being in the ol' Brown Bros Harriman building near the Exchange twenty years ago.

I remember sitting next to a guy at a very well known prop firm that had 4 monitors wrapped around him, and 90 Level2 open at all times! He would show up with a plastic bag and proceed to eat what seemed as all the foods that crunch! After a few weeks, I told him to either take up bananas (less noisy) or move and set up his monitors in the utility closet...or, risk becoming a human roof test dummy.

At the time I was living in a 1920's era home in Los Angeles, the neighborhood was only supported by DSL, the office had more appeal, the drive to the office to do my routine prior to the open was a drag. I got to be on a first name basis with the LAPD motorcycle cop with the hand held radar on Olympic Blvd.

Once I had access to a cable modem I liked the remote or home warroom setup much more. My firm's risk manager and IT people are an instant message away.

Having started in investment banking in 1986 using a shared Quotron and Lotus 123 I can tell you the average prop trader has more resources available today than the top tier investment banks had back then. The buy low, sell high thing is still pretty much the same.
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I appreciate you taking the time to layout things out in a very logical manner. Make sense....those who don't need handjholding or supervison shoujld trade remotely. I'll need to some supervision intially tho...
 
I feel the advantages of working at a good office, rather than trading remotely, are huge. For example...

If it's a good office the owner will be shelling out significant money for the best Internet connection money can buy. Forget cable Internet service. These sorts of connections will cost a few thousand dollars a month and are worth every penny. Still, they're rather pricey for someone starting out on their own.

It's in the owner's best interests that you make money, so it's rational for him to share his trading knowledge with you. If the owner is a bad trader this is pointless, but if he was a bad trader it would probably be a shitty office in the first place. Any training you can get is gold.

Traders like to protect their methods, but if you can convince the experienced traders in your office that you have potential, and are willing to share the things you discover, you'll find them willing to share their secrets with you. This creates a great situation where you have a whole pool of mistakes and successes to learn from beyond your own.

I know I wouldn't be where I am today without the help I've gotten from the traders around me. Tapping into that kind of resource is a huge edge and it'll maximize your chance of success. I realize there are such things as "remote mentoring" and such, but that just isn't the same as sitting next to someone.

Good luck with this. You'll need it. Trading is so hard very hard. You'll need all the help you can get, so do your best to get it.
 
FWIW, we do our best to keep our remotes connected, all day, via mentor groups, managers, and other online methods. We don't leave anyone all alone, unless they prefer it that way.

Don
 
Quote from Don Bright:

FWIW, we do our best to keep our remotes connected, all day, via mentor groups, managers, and other online methods. We don't leave anyone all alone, unless they prefer it that way.

Don
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Don - you don't allow trading NASDAQ...just NYSE only stocks?

Thanks.
 
Quote from jimclark:

Don - you don't allow trading NASDAQ...just NYSE only stocks?

Thanks.
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For the life of me, I don't know how that rumor got started. Back in the mid 90's, we simply aske for our guys to show that they were very familiar with the nuances of Nasdaq trading vs. NYSE before diving in. We have always traded nasdaq stocks, and do a lot more now because they get paired off with other naz stocks or NYSE stocks.

I guess some people took a snapshot of B T 12 years ago, and have never bothered checking again, LOL.


Don
 
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