Quote from Maverick74:
My best advice would be to find a good recruiter in the city you want to do this (Chicago?) and he/she will be able to land you a trader. They will also know ballpark what you should be offering this trader.
When you bring this trader in, now you have revenues (or should) to lean on and you can now afford to pay some small draws to some young guys right out of college. This way the operation sort of funds itself. I'm sure there will still be some cost outlays, and no doubt you will have some risk, but I think this is a much better way to go.
One profitable trader in hand is worth 10 newbies in the bush.
Quote from Hydroblunt:
I just have to ask. WHY? Why in the world would you wish to waste 6 figures worth of capital on a bad idea like this.
This concept has not worked in years, what makes you think it will work now? The only firm that has managed to pull it off in full scale is FNYS, and they spend a year simply training the candidates from their highly selective process. Plus, they employ more serious high capital strategies.
Listen to Mav, he has his hand on the pulse of the industry, and it is getting weaker by the month. The edges are simply not there to front your own capital and back newbies who would develop trading systems.
Putting aside the trader success/failure statistics, the reality is that there is almost no edge left in equities or index futures for the small to mid-size independent trader.
Quote from risktaker:
$150K ain't gonna buy you a 'superstar' trader. Maybe somebody whose strategies have died out and needs some income asap, but not a guy who's got a 'good' system working.
It can buy you a smooth talkin' recruiter, though!
But yeah, still better than paying newbies $2-3K/mo to reinvent the wheel.
Quote from shortthelows:
Hi,
I have been trading for about 5 years now and have been completely automate for 2 and I am thinking about starting up a sub llc under one of more well known prop firms. But instead of running your traditional subs I was thinking of going a different direction.
Instead of of having any trader come in and put money up, I would hire traders. They would be paid a small salary (2k a month) and 50% of their profits or 75% of their profits (which ever is greater). But we wouldn't be focusing on manual trading, everything would be automated.
They would have access to in-house programmers, back-testing software, and other infrastructure to develop trading strategies. I would be looking to hire college grads without any trading background. Teach them the basic of the markets and electronic trading and them let them at it.
Each trader would have 1 year from their hire date to develop 1 trading strategy. Once they have developed on, their day would consist of research and monitoring their models.
The reason why I feel this is a good business model is because most new traders fail because of three things, they are under capitalized, don't have trading plan (a stick to it) and they have poor risk management. This new model would address all three of this issues.
This is the basic overview of what I would like to do. What to you guys think, is it worth the time and effort? Any suggestions and comments would be great.
Quote from tradingjournals:
I do not believe you have the money. Most likely you are just dreaming and wasting people's time. Here is my proof: I can actually take care of $1K loss per month (so you have an edge of $3K from the start), and I am almost certain you will not take the offer.
This offer should stop this talk.
This offer also extends to anyone with a shop--a challenge to other shop talkers.
And if any of you thinks you will lose (which you can), I invite you to a challenge here on ET so I quick your ass in public using real-time paper trades--- at least we will have some fun.
Enough of this non sense of this board: I believe that shops make money from commissions/software/etc, lending using SPAN margin, and and other people money. In others words, they most likely make money from picks and shovels.
Quote from shortthelows:
I don't get how you can say there are no more edges in equities. I am still making money and out of the 15 traders on my skype list, 11 of them are still doing very well. Actually the reason I was even looking at this idea is because of the failure rate in this industry. I figured this would address the reasons why new traders fail.
As for the small to mid size trader not having an edge that is so not true. The reason why I think I am doing well is too many people share your sediments and have moved to trying HFT or something else like that. There is still money to be made.
Quote from punter:
not trying to be a prick here, but i dont actually understand your words. specifically, the idea of 'proof', how your ability to withstand 1k of heat amounts to a 3k 'edge' for the poster, lol...i dunno man. you can always just pm me if you care to explain.