futures trading career


8 0
I've traded ok with australian stocks on my home account and my friend suggested I should look at the proprietary trading firms that are always hiring. My research indicates they mainly trade index futures.

Are they any resources on the net that describes what their approach is and how the traders are able to profit regularly to be a base income?


76 9
Your question is prefaced with several "assumptions of fact" which probably aren't true. Those assumptions are:

1. Proprietary/futures firms are always hiring.
2. That profitable traders are producing a "regular profit".
3. That a proprietary firm's traders are producing a typical or regular income. Think if this assumption makes sense with #1.
4. That most proprietary firms are future firms.
5. That successful traders at these firms are all using the same methods.
6. That once a trader achieves a level of success that success will continue (typical wrong assumption).

I find all of these assumptions quite questionable. The best answer I can give to you is that succesful traders are similar to other professionals. They commit a huge amount of resources and efforts into achieving success.

There is a significant difference though, most other professionals can choose a "difficulty level" or performance level whereas traders don't have that option. Only a few "careers" like professional sports are so demanding of performance.

One of the major differences between stocks and futures is that futures give you a lot more leverage. This allows for any small advantage over chance to be magnified. Some prop firms have a real edge or what might be thought of as a vertical advantage or an asymetrical advantage. This is the "truest definition" of the word edge --which I generally dislike. Such an advantage might be, for example, getting cheaper commissions then other traders from the exchange or having access to cash markets that require large amounts of capital.

If you're looking at learning futures trading, I suggest you search for information on order flow, tape reading, algorithmic trading, spread trading, arbitrage, event trading, systematic trading, and day trading.
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