Prop firms : Do they really invest on training?

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Old Dec 26, 2007, 6:24am   #1
 
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Prop firms : Do they really invest on training?

I post this question,because I am interested in becoming a "prop trader". I am a rookie at trading and I know from many discussions I have had there is a lot of hype out there.

Prop firms claim that they do have training,but I often wonder how intense and committed they are since in general most prop firms are really brokerage houses earning a living on commission dollars and desk fees etc.

As a rookie I will need all the mentorship and training available . The point I want to stress is am I better of with prop firms who claim they have training programs which on the surface look very basic to me with not much emphasis on trading models or systems or to invest on a mentorship program that will hopefully transform me into a trader with an edge at least.

Appreciate any comments.
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Old Dec 26, 2007, 8:04pm   #2
 
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Originally Posted by centee View Post
Prop firms claim that they do have training,but I often wonder how intense and committed they are since in general most prop firms are really brokerage houses earning a living on commission dollars and desk fees etc.
.
you miss out an important point, since most training progammes are designed to train a trader to trade using company funds - the firm has a vested interest in the success of each candidate, since if a trader fails they will end up in the hole for whatever losses he racks up. Commissions and desk fee's dont quickly cover a 50k cumulative trading loss.
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Old Dec 27, 2007, 3:32am   #3
 
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Originally Posted by Arbitrageur View Post
you miss out an important point, since most training progammes are designed to train a trader to trade using company funds - the firm has a vested interest in the success of each candidate, since if a trader fails they will end up in the hole for whatever losses he racks up. Commissions and desk fee's dont quickly cover a 50k cumulative trading loss.
I see your point,but I also understand that prop firms cut you off once you reach your risk limit. So, this would still protect them and reduce the risk of you wiping them out. In effect,they do this to protect their bottom line and since most of them do require a security deposit they are pretty much covered.

I agree in the value of training and if I was running a prop operation it would be to my advantage to make certain that my traders are successful. My point is and I do not want to generalize, is that I have observed that training programs are very basic and lacking in substance.I would expect a prop firm to" hold your hand" and essentially give you a "template" on how to trade profitably. I know I sound like I am looking for the holy grail of trading,but if a prop firm's survival is dependent on profit sharing and not commission and fees then I would teach my traders to push this button or that button when this happens or that happens. There must be a proven "formula" for prop firms to have survived this long if indeed they depend on the trading profits of their traders for their revenue source. If fees/commissions is the name of the game then just keep a constant stream of newbies coming into the door and you should be able to make it.

I do have serious doubts if firms really have that "formula".I may be wrong???
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Old Dec 28, 2007, 12:46am   #4
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Originally Posted by centee View Post
I post this question,because I am interested in becoming a "prop trader". I am a rookie at trading and I know from many discussions I have had there is a lot of hype out there.
I completed a 'training course' at a prop house recently so the following is from my (brief) prospective.
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Originally Posted by centee View Post
Prop firms claim that they do have training,but I often wonder how intense and committed they are since in general most prop firms are really brokerage houses earning a living on commission dollars and desk fees etc.
I can see where you're coming from, I had exactly the same thought at one point. However, I came to realise that it would be much better to have a good trader who earns good money so he can trade in big size and generate huge commissions than have a bad trader losing all the capital allocated to him.
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Originally Posted by centee View Post
As a rookie I will need all the mentorship and training available . The point I want to stress is am I better of with prop firms who claim they have training programs which on the surface look very basic to me with not much emphasis on trading models or systems or to invest on a mentorship program that will hopefully transform me into a trader with an edge at least.
Most prop houses are based around the futures market and I understand that the vast majority will teach you how to 'scalp' in the STIR markets. From what you've written it sounds like you're looking for the next 'Turtle' farm (i.e. someone to teach you a secret trading system. i.e. Way of the Turtle: Curtis Faith).

As for mentorship; during the course our trades were analysed to identify where we were going wrong (or right). Since I've been out on the trading floor I've been asking lots of questions of the more experienced guys. The head of desk also looks at my P&L and will offer advice on whatever I'm doing.

On the training course, one of the key traits they looked for was hard work and the desire to learn. In summary, it won't be handed to you 'on a plate'. They expect you to be constantly learning for yourself. If you want a 'non-scalping' approach you might want to try getting on a training course for a bank or big institution.
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Old Dec 31, 2007, 4:36pm   #5
 
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NO and NO

Think about, would you really 'train' someone to take your job?

If you already have someone that can trade the positions with out having to take on more risk, by having someone unexperienced trade the account.

I find this questions disasterously ignorant. You really think someone with 20 plus years exerience needs to accept more risk.

These people that talk about training, hiring, these so called 'head hunter' know absolutly nothing about this industry.< How the hell do these people know what it takes to be a trader. They can't trade and certainly don't who one is when it comes time to hire.
This is why you constantly see ads for employment of traders yet never hear of anyone being hired. NO ONE IS BEING HIRED.
There's no one intelligent enough to profitably trade, let alone someone intelligent enough to pick this person out of a crowd.

The paradox is that the people at the very top of management are complete idiots and have zero mechanical intuiton, not to mention they have no Balls Ok, zero.




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Old Dec 31, 2007, 4:59pm   #6
 
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Originally Posted by Depth Trade View Post
This is why you constantly see ads for employment of traders yet never hear of anyone being hired. NO ONE IS BEING HIRED.
There's no one intelligent enough to profitably trade, let alone someone intelligent enough to pick this person out of a crowd.
?

So... no one can trade profitably, and people are pretending to hire for the fun of it (and presumably to waste money on very expensive offices) but actually don't do any trading at all? What possible reason could there be to do that!?
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Old Dec 31, 2007, 5:02pm   #7
 
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I tend to RichiE. I have the same experience. I was trained by Deutsche Bank, tough and demanding, but worth a million bucks in hindsight (or even more )

And I trained people myself, not to take my job, but to make it easier and to have a back-up IN CASE.
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Old Dec 31, 2007, 5:03pm   #8
 
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Originally Posted by arabianights View Post
?

So... no one can trade profitably, and people are pretending to hire for the fun of it (and presumably to waste money on very expensive offices) but actually don't do any trading at all? What possible reason could there be to do that!?
*BIGSMILE*

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