Arcades - a good option for new traders

mcdoma

Junior member
12 0
I'm thinking about becoming a professional trader and I'm looking for some advice about trading arcades.

How much collateral do you have to put up?

How much is the desk rent pcm?

Is this a good option for a trader with limited experience (1 year)?

Any feedback will be much appreciated.
 

TWI

Senior member
2,527 252
I currently work in an Arcade and will try to answer your questions.
This subject has been covered in another thread.

How much collateral do you have to put up? 20k is usual although arcades periodically sponsor people and put up the stake.

How much is the desk rent pcm? 1000-2000 pcm but this is not really the important figure. Much more important is their transaction charges. Mine start at under 1 pound and decrease as I do more volume. As a standard month involves more than 10,000 lots it does become a significant cost.

Is this a good option for a trader with limited experience (1 year)?
It is a good option for anybody who wants to trade for a living as it is possible to make a living doing this far more easilly than if you are following a trend following or directional trading methodology. Many people think if you make 20-30% a year that you are doing brilliantly well. Many here will make 50-100% per month. It is not a methodology you could apply to large amounts of capital such as fund trading but for individuals accounts it cannot be bettered. I know as I traded professionally for many years before I went out on my own. This method is totally different from you standard trading methodology and in many ways being a novice is an advantage as you will not be tied by your previous trading "rules".

Saying that, it is not easy, nobody gives money away. We all work long hours and it takes most people around 6 months to get to the point where they are competent.
 
  • Like
Reactions: BSD and DC STOXX

TheBramble

Legendary member
8,395 1,170
I've been thru the entire thread (and the other one twalker provided - thanks), but still can't see what the attractions are.

There was an argument that the costs of trading from home are just as high - but I can't get that one to work at all for my own personal circumstances. Zero rent, cost of DSL (which I'd have to have anyway) and the h/w (also anyway) and the s/w - OK. S/W costs are a one-off and datafeeds are the other issue.

But one-off s/w and on-going datafeed costs are NOWHERE near £1500-2000/Month.

So what exactly is the benefit of a trading desk?

Cheaper transaction costs?

Better h/w & s/w?

Fellow traders to chat with?

Training...??? (How/Who - extra cost?)

Prop. trading tools & methods - is this true for all arcades?

I guess I'm interested if my trading success is going to be increased, but travelling into 'town' and paying a hefty-ish monthly fee would need substantial additional factors to be present for me to be convinced.
 

wysinawyg

Active member
186 1
TheBramble said:
I've been thru the entire thread (and the other one twalker provided - thanks), but still can't see what the attractions are.

There was an argument that the costs of trading from home are just as high - but I can't get that one to work at all for my own personal circumstances. Zero rent, cost of DSL (which I'd have to have anyway) and the h/w (also anyway) and the s/w - OK. S/W costs are a one-off and datafeeds are the other issue.

But one-off s/w and on-going datafeed costs are NOWHERE near £1500-2000/Month.

So what exactly is the benefit of a trading desk?

Cheaper transaction costs?

Better h/w & s/w?

Fellow traders to chat with?

Training...??? (How/Who - extra cost?)

Prop. trading tools & methods - is this true for all arcades?

I guess I'm interested if my trading success is going to be increased, but travelling into 'town' and paying a hefty-ish monthly fee would need substantial additional factors to be present for me to be convinced.

From what he's saying it seems the cheaper transaction costs are a fairly major part of it. At sub £1 (even if it is each way) thats about half what you pay for a discount broker isn't it? So saving £2 per contract you only need to do 500 round trips (25 a day) to make up £1k in seat fees, which is a fair bit if you're doing one lots but not once you get into size.

wysi
 

TWI

Senior member
2,527 252
It all depends how you are trading. The method used by many traders who want to make a living but do not have huge margin equity require you to be right in the market and pay market spreads. This requires top notch platforms and high bandwidth direct exchange connections.
A standard dsl connection from home does not even get close to the reliability you need.
I outlined the cost of working from home before. My trading platform costs ~500pcm
Charting (CQG) ~500pcm
Telco from home has to be minimum 256kb fixed line direct to clearer or xchange ~300+pcm (depending on location)
You can VPN with a 2mb 20:1 IP connection at ~100pcm but again reliabiltiy will suffer when you get a fast market. a 1:1 IP costs the same as a fixed line.
Maybe the most important factor is that the arcade provides very cheap transaction costs. Mine start at <1 per round turn and reduce as i do more volume. This is because arcades can offer clearers millions of lot accounts so get very aggressive rates. As an individual doing a few thousand per month you will get nowhere near these rates.
This month is very quiet and I have done over 10,000 lots. If my transaction costs doubled I would wipe out a lot of PnL.
Finally, you learn a lot from other people and quite frankly have a good laugh working in the right arcade. We are all off for a weekend skiing in the Dolomites this coming weekend. I would miss this type of thing if I sat at home every day wondering how everybody else was doing. We have had guys set up at home and then move back here because their PnL was better when they were in this environment.
Hope this helps.
 
  • Like
Reactions: tenbobtrader

mcdoma

Junior member
12 0
Just to clarify, do the arcades charge transaction fees based on the number of lots you trade or the number of trades you make.

For example buy 1 lot, sell 1 lot - is the charge GBP1

or

Buy 25 lot, sell 25 lots - is this also GBP1?
 

TWI

Senior member
2,527 252
The cost is based on lots you trade for e.g.
Buy 1 = 45p
Sell 1 = 45p

or Buy/Sell = 90p

Tend to have sliding scales. Initial costs vary from 60p(which i think is a rip off) to ~45p both per lot/side
These can get down to ~35p/side with enough volume.
These are further reduced because if you create a lot of volume the exchanges will also pay you rebates. Their formula is complex and depends how far out you are trading but ~20,000 lot will provide at minimum ~1000GBP rebate which just about covers desk fee itself .
 

TWI

Senior member
2,527 252
I currently work at Trading Connections
www.tradingconnections.co.uk
don't bother as website down for update
 

darrenf

Well-known member
481 3
TWalker

It is a good option for anybody who wants to trade for a living as it is possible to make a living doing this far more easilly than if you are following a trend following or directional trading methodology. Many people think if you make 20-30% a year that you are doing brilliantly well. Many here will make 50-100% per month. It is not a methodology you could apply to large amounts of capital such as fund trading but for individuals accounts it cannot be bettered.

At the risk of souding ignorant, could you explain what the trading methodology is, not in any great detail, but what are you doing if not trading direction, what instruments you trade and what sort of risk is taken per trade in order to acheive 50 to 100% per month. This is not meant as a challenge to what you are saying, I am genuinely interested to hear how other people trade and what kind of results can be acheived.
 
 
AdBlock Detected

We get it, advertisements are annoying!

But it's thanks to our sponsors that access to Trade2Win remains free for all. By viewing our ads you help us pay our bills, so please support the site and disable your AdBlocker.

I've Disabled AdBlock