Prop firms : Do they really invest on training?

[centee]

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.

 

[Directional]

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.

 

[centee]

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???

 

[RichieE]

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.

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.

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.

 

[Depth Trade]

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.




DT
:clover:

 

[arabianights]

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!?

 

[DaxDestroyer]

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.

 

[DaxDestroyer]

?

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*

:clap::clap::clap:

 

[Depth Trade]

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.

Yeah, sure.

DT
:clover:

 

[Depth Trade]

?

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!?

Try and find one person on this forum. Let alone what happens to the hundreds of thousands that now have a Economic or Financial degree.

Prove me wrong, show me these people.


DT
:clover:

 

[Depth Trade]

?

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!?

Yeah, I believe Western Civilization is running our economy right into the ground.

" " That's your excuse? Pathetic, your reasoning being 'top management' can't be this ignorant? Well they are, and have proven themselves over and over again.


Hey I have news for you, we're not 10trillion in debt. It's just and accounting mistake.ha,ha ha


DT

 

[Depth Trade]

Dax, arabian I don't mean to offend you guys. I'm just upset at how low the Integrity of this business is.

Here's your answer though.


Yes most of them are Thieves, there going to Rip you Off. They'll commision you out of your last penny, then give you and your dying mom a quick kick in the ass as you walk out the door.

You want to talk about cheap sales tactics, most of these dirt ball brokers wannabe traders would con there own father into death.

Ok, I don't even have the vocabulary to put it into words how low most of these scumbags are.


WOW


DT:clover:

 

[Depth Trade]

Put it this way, our most reputable university birthed the most ignorant sadistic man.

George Bush.

Ok, think about this. Our greatest pillar of education produced nothing. We create nothing, only take from the un-informed.

Western Civilization is so broke, what makes you think we could even train someone for the positon. We can't even budget ourselves, what makes you think we have anything to teach?

It's one thing to blindly follow, it's another to walk around with your eyes shut.

Look at Merril Lynch, Ubs, anyone of these Houses. You really think they have traders,
they don't. They have guys losing 3% everyday, day after day.

Think about it, theres a population of hundreds of thousands of traders( not mentioning the ones that don't register) and these huge institutions risk missing out on new clients by not posting winning trades on the forums?

Why would these institutions miss out on potential clients? The answer is because they can't consisently produce profits, so they lose the customers to a private individual as myself.

Think, Elitetrader, Moneytec, Trade2win, these institustions are missing all of it.

I don't believe they can compete are come close.


DT
:clover:

 

[DaxDestroyer]

Dax, arabian I don't mean to offend you guys. I'm just upset at how low the Integrity of this business is.

Here's your answer though.


Yes most of them are Thieves, there going to Rip you Off. They'll commision you out of your last penny, then give you and your dying mom a quick kick in the ass as you walk out the door.

You want to talk about cheap sales tactics, most of these dirt ball brokers wannabe traders would con there own father into death.

Ok, I don't even have the vocabulary to put it into words how low most of these scumbags are.


WOW


DT:clover:

I don't feel insulted at all, rather amused. Only out of respect I don't start to giggle. Don't be that negative! Try to see the positive side! And YES, if you work hard and keep your eyes open, you will find people helping you trade for a living. And even one can find banks and brokers educating you

 

[DC STOXX]

I don't have a clue what Depth is trying to say?
Is he saying nobody can trade profitably consistently? OR is he saying that those who can will never help anyone else in the methods to successfully trade?

 

[DaxDestroyer]

I don't have a clue what Depth is trying to say?
Is he saying nobody can trade profitably consistently? OR is he saying that those who can will never help anyone else in the methods to successfully trade?

I'm quite sure that he tends to think, that nobody will help you. Sharks around

 

[arabianights]

Yeah, I believe Western Civilization is running our economy right into the ground.

" " That's your excuse? Pathetic, your reasoning being 'top management' can't be this ignorant? Well they are, and have proven themselves over and over again.


Hey I have news for you, we're not 10trillion in debt. It's just and accounting mistake.ha,ha ha


DT

Even if the management were incompetent, they must be getting the money to fund traders from somewhere, and that can't just be through comission. Ultimately if a trader is not putting up their own money, if the firm is funding everything (which is the case at most prop shops afaik) then the prop scheme has to be generating income, otherwise the firms would be bankrupt very quickly.

 

[toxictrading]

i think the problem is that a lot of people want to walk into a prop shop and be given a book that is entitled "do this and become a millionaire" its not just down to the training its also down to how you apply yourself to it, regardless of the training you get if you immerse yourself into it dep enough and hard enough you will succeed ! training or no training if you want the easy route to hard bucks then you are going to fail.

 

[Directional]

trading is the hardest way to make an easy living

 

[police]

trading is the hardest way to make an easy living

Well said Arb. You have to work damn hard at this game and put the hours in. Maybe after a couple or three years you can reap the rewards of the hard work and if you are lucky become a little more of a master of the markets, rather than the markets owning you !!