Trading with a view to join a prop firm

This is a discussion on Trading with a view to join a prop firm within the Trading Firms forums, part of the Trading Career category; Originally Posted by FXX Hey Nowler What are you looking to get out of this? Out of working for this ...

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Old Nov 10, 2017, 12:48am   #41
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Originally Posted by FXX View Post
Hey Nowler
What are you looking to get out of this?
Out of working for this prop?

The benefits of me getting on that trainee program with them are almost endless.

- Id be trained by professionals who have an invested interest in me succeeding
- They are willing to pay me each month to be a trainee (very little money, but it would cover rent/food)
- There is likely a job with them at the end. If not, i'd be far more attractive to other employers because of it.
- It would get me out of this soul destroying place and would certainly get my life back on track (socially, gym, sense of productiveness)...

There's loads!
- It would open to door for me to earn €30-50k/year towards the beginning and then give me the opportunity and experience to become a "senior trader", which brings more money.
- I could pay off my whole families debt
- I could pay for medical procedures for my mom and her partner.
- I'd be able to put a nice bit of money away into an account for family use
- I could start a college education fund for my nephew and now the new niece/nephew on the way(still 7 more months to go)

All of this opens the door for me to accumulate far more money than I have now. This will allow me to be a far more efficient philanthropist. I'd like to go back out to Sri Lanka where I went last year as a mental health volunteer and I could use my financial wealth to help build things like schools and whatnot...

I don't need to be a millionaire to achieve most of these...though it would help

I could work at a prop firm for 5-10 years and then trade my own large account.
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Old Nov 10, 2017, 12:59am   #42
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Nowler started this thread Oh!
And my hip!

I can't have many more years left on this as it is. I got it done 12 years ago, so... surely that'll have to be redone this side of 2025 which the last time I checked will cost me €15k minimum!

So getting into a prop firm would help me pay for that too
I guess I could get back on the road again too! Been ages since I drove! Since I started uni in '13

I miss my car
When stuff got too negative and difficult here I could just go for a drive. Now I have to deal with it continuously.

Look at the bright side... I'm trying to use it as motivation

I need a root canal for the last 4 weeks but didnt have the money to pay for it. I told him to just pull it out but he said that he wouldnt recommend it. Lol, I immediately changed my mind and said OK
I will have to get a loan for that during the week, so getting into a prop firm would pay off my own debt too!
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Old Nov 10, 2017, 8:42am   #43
 
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I am going to put the wheels in motion for my move to the UK. I am not going to wait around on this crowd....
Cool.. but will you be saying goodbye to steak and BJs ?
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Old Nov 10, 2017, 1:01pm   #44
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Cool.. but will you be saying goodbye to steak and BJs ?

Ah no. That doesn't rest on getting into this firm. It would have been nice to get into this one as they sound quite compatible with me but I was determined to become a full time profitable trader before I applied to them. Nothing has changed and I will still be aiming to be a full time trader if I don't get in with them.
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Old Nov 14, 2017, 2:26pm   #45
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Nowler started this thread Just an update on the application. Unfortunately I wasn't successful.
Disappointing, but considering I am only 6 month trading and this was the only place I applied for, it's not a shock

I guess I continue with my original plan... move to the UK in the new year.
I have found a few hours work here and there in the local bar, so I will gather up what experience I can there and then I should be OK for a job in the early days of the move, until I find better work.

Just like any of our losing trades, we dust ourselves off and go again. Thanks for all the help and the support folks!
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Old Nov 17, 2017, 5:26am   #46
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I'm pretty sure academic snobbery will exclude me from getting a job at an investment bank but am I wasting my time trying to find a prop firm that will hire me with 6 months independent trading under my belt?
It depends... if you were to trade futures for 6 months, intraday and were consistently profitable and then could bring a statement from your FCM to some arcade/prop firm (there aren't many left though) then they'd probably be quite receptive to you - though you may find that perhaps you'd be better off sticking with trading your own account at that point.

You mention academic snobbery but that generally isn't the case - in some cases it might be a crude filter in other cases a quantitative undergrad is rather useful... if you don't at least have the basics of multivariable calculus, linear algebra that any Maths/Physics/Engineering grad will have then getting to grips with relevant statistical techniques isn't going to go so well. It really depends on the type of firm, what they do etc..

Some prop firms are into HFT, HFT pretty much lends itself to being a prop activity given the strategies often have limited capacity and rather high returns - this is probably not what you're after if you don't have significant technical skills to be a developer or academic background to be a researcher.

There are the options market makers, they still trade from the screen, though generally they'll look for a 2:1 degree or above as a filter... plenty of them aren't necessarily all that picky on the initial screening but will get you to sit a bunch of aptitude tests with a load of other candidates and will quickly cut out most candidates on the first test - if you're not quick at doing simple calculations in your head at speed then plenty of these firms will be a non starter for you.

Lastly, the sort of firm you're probably thinking of is often referred to as a trading arcade - problem you have here is that you're basically just over a decade or so too late for this - the HFT firms have made futures markets much more efficient and sucked up a lot of the low hanging fruit the traders at these sorts of firms used to rely on. There are also some of firms out there now that will claim to be trading firms and will be willing to sell you a training course - avoid them for obvious reasons!

How arcades used to work - typically they'd get a bunch of guys in in their 20s, mostly recent uni graduates, and sit people in front of a simulator for 8 weeks and if you were able to consistently make money then they'd let you trade live with 1 lot then scale up from there - invariably the software used was TT for trading/sim and CQG (usually shared between two people) for charts.

The training consisted of presentations from account managers from various software vendors and exchanges (you'd usually get some pens or a mug and some educational material from the exchange - the guy from the Montreal exchange gave us all a pot of maple syrup!) and in the week before trading on the sim we spent some time reading through various material from the Eurex and CME websites. We also had a few books to read and write reviews on (presumably to demonstrate we had read and understood them) and a couple of little projects to work on. Some basic training was also presented in house regarding economic releases, trading spreads etc.. Basically none of this training was any secret sauce that would lead you to trading riches - there is very little incentive for some senior trader to teach you exactly what he does and have you copy him - he might as well just increase his size instead. Essentially most of what you'd learn on such a training scheme you could learn for yourself at home.

Some arcades would have everyone trading say STIRs, others including the one I was at were far more flexible and would let you try various things on the sim(AEX, CAC, FTSE, EuroStoxx, Dax, Bund/Bobl, WTI/Brent etc..)... so long as you were consistent at it then you'd be able to go live.

You'd get a basic salary, but this was essentially a draw down from the account... so this is a cost that immediately starts to add up before you've even gone live and that you'll need to cover with your future trading profits. The sim is free but once you go live you're looking at a couple of grand in software costs per month, additional fees depending on the number of exchanges you need to add, a desk fee and the cost of your basic salary, only once you've made enough money to cover those costs can you start getting into the profit split, which if you're fully backed by the firm typically started at 50% and then scaled upwards in your favour at set increments.

These trading firms don't generally offer these sorts of deals any more - the reason why is obvious, most people can't make money like that any more... point and click trading of futures just isn't anywhere near as feasible as it was as the markets are so much more efficient. Surprisingly though a few people seemingly still make money and so there are still some clearing firms/arcades who will rent desks and might perhaps be interested in some sort of arrangement if you're able to demonstrate some track record - it certainly isn't profitable anymore though for them to take on a whole bunch of 20-somethings and let them loose on the markets as they used to while paying them a basic salary.

Just to comment on some things you've mentioned:

The training isn't much to get your hopes up about, you'll need to discover your own edges.

You mention wanting to earn 30-50k EUR, that sort of amount is barely going to cover your costs in an arcade.

You also mention having traded for 6 months, have taken a big loss and only the last month is profitable (though you're still at a loss overall) and somewhere else in the thread you mention that you've done 350 trades in that period - assuming these were evenly distributed then your last month where you believe things have changed you've perhaps got a sample of only 60 trades from which you're making that assertion... if you were scalping some futures market on a sim you might well make this many trades in a single day, I'm not sure you can really conclude much from it at all.


You mention trading FX, I'm assuming this is via some bucketshop where you're forced to cross their spread in order to trade? If you were trying to find out if you had some edge in intraday trading in order to perhaps go to some prop firm then having to cross that spread is likely going to present some serious problems for you. As another poster pointed out earlier in the thread for these types of 'prop firms'/trading arcades you'd generally be trading futures (or equities too in the case of US firms).

You mention moving to London - that could turn into an expensive waste of time, you don't know that you're profitable yet, if your plan is to build up this track record you're planning to build up then adding additional costs to that probably isn't a good idea. I'll again reiterate that this sort of intraday trading isn't so feasible these days, you've got no idea yet if you'll be profitable - most of the people who used to do it for a living a decade ago aren't anymore so chances are rather slim!

And back to what I mentioned at the start, supposing you find yourself in the unlikely position where you are consistently profitable over the course of 6 months when trading futures intraday, you might well find yourself in a position where it is preferable to simply carry on with what you're already doing rather than go to some arcade and add on various fixed costs + give up a profit split - then again benefiting from lower RT costs and access to funding could be preferable.

Anyway I realise this has turned into a bit of a wall of text but hopefully some of it may be useful or give you pause to think.

--------------------------------------------------------

TL;DR:

for the trading arcade type prop firms in London you'd generally need to trade futures - you're very, very unlikely to be successful at point and click trading of futures intraday unless you build a time machine and go back 15 years - lots of these firms have closed down for good reason!

you might possibly get a shot at an options market maker if you're good at aptitude tests, mental maths etc..

though generally for the other types of prop firms you'd probably need to go back to university - for anything involving systematic trading/HFT then relevant post grad degrees and/or significant technical skills are generally needed
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Old Nov 17, 2017, 12:26pm   #47
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Hi Nowler,
Wise words from DT, above. If you're not put off by what he says and are determined to go down the prop shop route then, if you've not seen it already, this FAQ may contain some useful pointers: How Do I get a Job Trading?
Tim.
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Old Nov 17, 2017, 5:42pm   #48
Joined Sep 2017
Nowler started this thread First of all,
Thank you very much for the informative response mate!
I really appreciate you taking the time out to help me.


Quote:
Originally Posted by DT View Post
It depends... if you were to trade futures for 6 months, intraday and were consistently profitable and then could bring a statement from your FCM to some arcade/prop firm (there aren't many left though) then they'd probably be quite receptive to you - though you may find that perhaps you'd be better off sticking with trading your own account at that point.
Yeah, if I was to get to that stage then i'd be better off just trading my own account. Being educated by people who have an invested interest in me succeeding is a huge selling point for me. Without that (If I have to go a do the learning myself) then working with a prop is far less attractive to me. It would still be beneficial in the sense that I could get a decent wage for 2-3 and then trade my own larger account but I refuse to pay them for my training. They will get plenty back when I start working for them (hard work, determination and adaptable), so if they lack the ability to see that, then I don't want to associate with them. I would like to see what it's like from a firm point of view though! Being a retail trader, we don't have access to some of the info that they would likely have. Having at least some experience from a firm point of view would make me a far better retail trader.

Quote:
Originally Posted by DT View Post
You mention academic snobbery but that generally isn't the case - in some cases it might be a crude filter in other cases a quantitative undergrad is rather useful... if you don't at least have the basics of multivariable calculus, linear algebra that any Maths/Physics/Engineering grad will have then getting to grips with relevant statistical techniques isn't going to go so well. It really depends on the type of firm, what they do etc..

Some prop firms are into HFT, HFT pretty much lends itself to being a prop activity given the strategies often have limited capacity and rather high returns - this is probably not what you're after if you don't have significant technical skills to be a developer or academic background to be a researcher.

There are the options market makers, they still trade from the screen, though generally they'll look for a 2:1 degree or above as a filter... plenty of them aren't necessarily all that picky on the initial screening but will get you to sit a bunch of aptitude tests with a load of other candidates and will quickly cut out most candidates on the first test - if you're not quick at doing simple calculations in your head at speed then plenty of these firms will be a non starter for you.
Haha, I don't even know what multivariable calculus or linear algebra is I know it's some form of maths... I know what multivariable means, and linear.
I want to avoid math heavy firms like the plague! I realise that probably the majority of firms rely on such a level of maths, but I have no interest in it and don't need to do it in order to take money from a market. So that rules out most firms... What would be suitable to me will be fiercely fought for by applicants but quite frankly, as stated above, if I have to go do my own learning then it takes away a lot of the attraction of joining one of these crowds.

It's probably not that I am unable to do maths at a high level. It's likely because I missed a lot of 1st year in secondary school that makes math tricky for me...I simply missed some of the building blocks due to being in hospital (I could always go learn it now). School was a horrible experience for me and as soon as I finished 3rd year, I left school and went working construction. Clearly I'm not stupid as I didn't even finish school and still ended up with a 2:1 in university. Also, due to the nature of my degree I have a good understanding of the brain, learning and memory, which gives me a great advantage when it comes to learning new things. So I could probably learn how to do this higher level of math that these firms require, but I ask myself...what's the point? I can do simple arithmetic. Granted, im not quick (a few seconds and maybe a few fingers). I passed all 3 modules on statistics in uni (including advanced stats) and got a 2:1 in my quantitative dissertation on cognitive reserve, schemata complexity and working memory capacity. So I am not totally inept with maths/stats. But again...what's the point in learning all this? I only seem to need it for the type of prop firms that I don't want to work at anyway.


Quote:
Originally Posted by DT View Post
Lastly, the sort of firm you're probably thinking of is often referred to as a trading arcade - problem you have here is that you're basically just over a decade or so too late for this - the HFT firms have made futures markets much more efficient and sucked up a lot of the low hanging fruit the traders at these sorts of firms used to rely on. There are also some of firms out there now that will claim to be trading firms and will be willing to sell you a training course - avoid them for obvious reasons!

How arcades used to work - typically they'd get a bunch of guys in in their 20s, mostly recent uni graduates, and sit people in front of a simulator for 8 weeks and if you were able to consistently make money then they'd let you trade live with 1 lot then scale up from there - invariably the software used was TT for trading/sim and CQG (usually shared between two people) for charts.
I've been told before that I am a decade or more too late for some of this stuff. It's a pity but it is what it is I guess.


Quote:
Originally Posted by DT View Post
The training consisted of presentations from account managers from various software vendors and exchanges (you'd usually get some pens or a mug and some educational material from the exchange - the guy from the Montreal exchange gave us all a pot of maple syrup!) and in the week before trading on the sim we spent some time reading through various material from the Eurex and CME websites. We also had a few books to read and write reviews on (presumably to demonstrate we had read and understood them) and a couple of little projects to work on. Some basic training was also presented in house regarding economic releases, trading spreads etc.. Basically none of this training was any secret sauce that would lead you to trading riches - there is very little incentive for some senior trader to teach you exactly what he does and have you copy him - he might as well just increase his size instead. Essentially most of what you'd learn on such a training scheme you could learn for yourself at home

You'd get a basic salary, but this was essentially a draw down from the account... so this is a cost that immediately starts to add up before you've even gone live and that you'll need to cover with your future trading profits. The sim is free but once you go live you're looking at a couple of grand in software costs per month, additional fees depending on the number of exchanges you need to add, a desk fee and the cost of your basic salary, only once you've made enough money to cover those costs can you start getting into the profit split, which if you're fully backed by the firm typically started at 50% and then scaled upwards in your favour at set increments.
That's the thing...the more time that passes the more I learn. The more I learn, the less I want a prop firm to work at. I believe that learning the theory behind trading is totally doable! All you need to do is close your mouth, open your eyes and ears and put in the effort. Granted the psychology of trading is a bit of a monster but I don't need a firm to help me with that as I can do it myself. I agree with you, the majority, if not all trading education is no secret sauce... So that I can and am doing myself, but at this early stage it would be nice to be getting my education from someone with an invested interest when it comes to me succeeding. It's important to say that most of what I know about prop firms are totally centred on that place that I applied to. They were willing to pay me during the training period of a year or more and then would be likely to take me on as an employee should I pass the training period. That specific situation was the real drive behind me wanting to prop trade. I dont want to work at a prop firm bad enough to go do all the leg work myself and then swan in a throw money at them to use their stuff... I'm sure I would have had some fees in the place I applied to but they were willing to invest in me by paying me while I train.


Quote:
Originally Posted by DT View Post
Just to comment on some things you've mentioned:

The training isn't much to get your hopes up about, you'll need to discover your own edges.
Agreed.

Quote:
Originally Posted by DT View Post
You mention wanting to earn 30-50k EUR, that sort of amount is barely going to cover your costs in an arcade.
That figure was in relation to the place that was willing to pay me to train with them. The only reason I kept using that figure is because it was the only real figure I have seen in relation to early days pay at a prop. Of course fees would eat into that.

Quote:
Originally Posted by DT View Post
You also mention having traded for 6 months, have taken a big loss and only the last month is profitable (though you're still at a loss overall) and somewhere else in the thread you mention that you've done 350 trades in that period - assuming these were evenly distributed then your last month where you believe things have changed you've perhaps got a sample of only 60 trades from which you're making that assertion... if you were scalping some futures market on a sim you might well make this many trades in a single day, I'm not sure you can really conclude much from it at all.
That figure of 350 trades is likely wrong. I was using myfxbook for my stats but recently the system went screwy and now only shows that I have 50 trades...
I did think that I must have done more than 350 trades. It must be more than that... but either way, the number isn't what I would be looking for if I was trying to make some statistically significant assumption/inference. I am still very early in my trading career, I agree. It's very difficult to make any claims with only 1 month of profitability. That record is now gone anyway because I started trying out some new styles. Mixed results so far but I should have a clearer picture in another few weeks.


Quote:
Originally Posted by DT View Post
You mention trading FX, I'm assuming this is via some bucketshop where you're forced to cross their spread in order to trade? If you were trying to find out if you had some edge in intraday trading in order to perhaps go to some prop firm then having to cross that spread is likely going to present some serious problems for you. As another poster pointed out earlier in the thread for these types of 'prop firms'/trading arcades you'd generally be trading futures (or equities too in the case of US firms).
Yes, that's correct.
The spread is a royal pain in my rectum!
I can manage it, but it just feels so unnecessary ... it gets in the way of my trading big time! It messes with my orders for stops and entries. I can still see a way of making money from it though, but I would like to not have to deal with widening spread dragging me in and out of trades that I am not wanting to.


NOTE: I am caught for time as I have a few hours work now but I will respond to the rest when I get back at around 8 or 9.

Thank you again for the very informative reply my friend!
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