Trade @ Home Or Firm

[Unreal]

Hi,

I need some advice on what is the best avenue for me in day trading. I am working at the moment and want to change career to become a day trader is forex. I understand I will lose money and expect horrid days I experienced them already in my working career. I don't expect big rewards for 12 months.

Ideally I would like to learn day trading from home by hiring a mentor to teach me and invest my own money.

However, part of me says join a trading firm for that I would need 6-12 months expenses upfront as well as relocate to London as I am based in Glasgow. I like the idea trading other firms money on larger accounts and the 80% profit goes into my paycheck where about 20% goes to them think its a fair deal.

I am stuck between the 2. I would have to give up my job to relocate and the Misses or be single for 12 months!

 

[timsk]

I like the idea trading other firms money on larger accounts and the 80% profit goes into my paycheck where about 20% goes to them think its a fair deal.

Lovely idea, but I suspect the reality is a little different. I think you've got these figures back to front!

 

[trader_dante]

I am working at the moment and want to change career to become a day trader is forex.

Why forex?

 

[Unreal]

Why forex?

It's simpler than stocks less currency pairs = more focus on learning the market in those currencies EUR/USD etc.

Also, the fact you can trade micro lots of testing purposes lose a couple hundred pounds if a strategy fails not the end of the world rather than tens of thousands of pounds. I work from home with tax advantages I can employ my wife and kids and receive rebates after 12 months and the biggest reason is I can achieve my dreams quicker than working 10-20 years saving up for my pension.

 

[advfntrader]

TD but you trade Forex...

Unreal, what age are you and what industry do you work in now ? I think its unlikely that you can just switch to day trading and be making money within 1 year

 

[Chartsy]

It's simpler than stocks less currency pairs = more focus on learning the market in those currencies EUR/USD etc.

Also, the fact you can trade micro lots of testing purposes lose a couple hundred pounds if a strategy fails not the end of the world rather than tens of thousands of pounds. I work from home with tax advantages I can employ my wife and kids and receive rebates after 12 months and the biggest reason is I can achieve my dreams quicker than working 10-20 years saving up for my pension.

I'm just going to tell you what i was told by a rich man, basically most people, including you,i think, are day trading forex for the wrong reasons:
1)free charts
2)Technical analysis
3)low start up
EASSSSSSSYYYYYYYYYYY!!!
I'm not saying charts don't work, i use them in swingin' but why don't you try a market like the eminis which are far superior and cleaner for day trading, look at a 1 minute chart of an fx pair...wtf! then look at a low tick bar period on the ES....mmm purty.

 

[Unreal]

I'm just going to tell you what i was told by a rich man, basically most people, including you,i think, are day trading forex for the wrong reasons:
1)free charts
2)Technical analysis
3)low start up
EASSSSSSSYYYYYYYYYYY!!!
I'm not saying charts don't work, i use them in swingin' but why don't you try a market like the eminis which are far superior and cleaner for day trading, look at a 1 minute chart of an fx pair...wtf! then look at a low tick bar period on the ES....mmm purty.[/QUOTE]

No, I know it is not easy and I will lose money but I do BELIEVE that I will be successful after a war with day trading as some call it I feel its worth it in the end rather than climbing the usual career ladder sucking upto bosses backsides.

I am not familer with trading e-minis please share the fundamentals and risk facters what is the leverage like?

TD but you trade Forex...

Unreal, what age are you and what industry do you work in now ? I think its unlikely that you can just switch to day trading and be making money within 1 year

I am 28 working 2 jobs as IT support. Would you recommend I go the trading firm router getting an intership or study accounting or finance for an investment bank?

Lovely idea, but I suspect the reality is a little different. I think you've got these figures back to front!

I think it was smb capital I heard that figure?

 

[trader30]

If you trade from home, what is your intended risk capital?

 

[Unreal]

£2k as I believe you cannot lose all of that most you could lose is £1k as the brokers place a margin call.

 

[j b]

Lovely idea, but I suspect the reality is a little different. I think you've got these figures back to front!

Plenty people in prop firms on 90% splits (i.e. the firm takes 10%).

 

[timsk]

Plenty people in prop firms on 90% splits (i.e. the firm takes 10%).

Hi j b,
If you're sure of your ground, I'm surprised to learn this.

For the sake of argument, suppose XYZ prop firm likes the look of Unreal (the OP) and says 'here you go - £100k - go trade'. Let's say that Unreal turns a 50% profit over the course of the year. He gets to keep £45k and the prop firm takes £5k. That assumes he does 50% each year. What if he only manages 25%? The prop firm only make £2,500 for their £100k risk capital. They'd be better off closing down their operation and sticking their money in a building society. I realise they take a slice off the commission on each trade and then there's desk fees etc. but, even so, if this is their business model, I certainly won't be starting a prop firm anytime soon! Of course, if Unreal stumps up his own capital, that's an entirely different kettle of fish, and a 10% cut to the prop house seems reasonable.

This is all conjecture on my part so, if you know different, I'm happy to take your word for it.
Tim.

 

[j b]

From my experience, you don't get taken on and "given 100k to play with". You get an account with a balance of zero, but given small limits in whatever product you trade. If you earn money, your account balance increases and you get more limits, if you lose then your balance goes negative and eventually you get sacked.

Split is generally based on account size - starting at 60-70%, potentially rising to 90%, depending on the account balance. Obviously nothing is set in stone, and there is room for negotiation. Different firms probably have different policies, but ultimately if you don't offer big traders 90% split, your competitors will, and you'll lose the people who are producing most of your income.

This is part of the reason firms have stopped taking on trainees (at least to the same extent as in the past) - the success rate is low, and those who make it demand favourable deals, since they have the option of jumping ship. It's far more profitable for a firm to offer deals to experienced traders than train people up themselves.

Also it's worth noting that 50% a year early on would be very low for a prop trader, although scalability tends to become an issue reasonably quickly.

 

[Unreal]

Plenty people in prop firms on 90% splits (i.e. the firm takes 10%).

Can you name a few or know anyone who does is this after a certain amount of success and time?

Hi j b,
If you're sure of your ground, I'm surprised to learn this.

For the sake of argument, suppose XYZ prop firm likes the look of Unreal (the OP) and says 'here you go - £100k - go trade'. Let's say that Unreal turns a 50% profit over the course of the year. He gets to keep £45k and the prop firm takes £5k. That assumes he does 50% each year.

What if he only manages 25%? The prop firm only make £2,500 for their £100k risk capital. They'd be better off closing down their operation and sticking their money in a building society.

Well, if you stick to your statagey they know that losses will be made as long as you have more profitable ones they with a lower percentage will see you through without being sacked even if results are low.

I realise they take a slice off the commission on each trade and then there's desk fees etc. but, even so, if this is their business model, I certainly won't be starting a prop firm anytime soon! Of course, if Unreal stumps up his own capital, that's an entirely different kettle of fish, and a 10% cut to the prop house seems reasonable.

This is all conjecture on my part so, if you know different, I'm happy to take your word for it.
Tim.

From my experience, you don't get taken on and "given 100k to play with". You get an account with a balance of zero, but given small limits in whatever product you trade. If you earn money, your account balance increases and you get more limits, if you lose then your balance goes negative and eventually you get sacked.

Split is generally based on account size - starting at 60-70%, potentially rising to 90%, depending on the account balance. Obviously nothing is set in stone, and there is room for negotiation. Different firms probably have different policies, but ultimately if you don't offer big traders 90% split, your competitors will, and you'll lose the people who are producing most of your income.

This is part of the reason firms have stopped taking on trainees (at least to the same extent as in the past) - the success rate is low, and those who make it demand favourable deals, since they have the option of jumping ship.

It's far more profitable for a firm to offer deals to experienced traders than train people up themselves.

What's your definition of experienced some with good results with another firm can show his/her results or being at another trading firm?

Also it's worth noting that 50% a year early on would be very low for a prop trader, although scalability tends to become an issue reasonably quickly.

 

[safvan]

A lot of new traders start from day trading which is very very bad. Day trading should be started only after one has mastered trading of daily or weekly charts.

Starting from the most difficult end of the deal and then expecting large profits is not sustainable. Day trading would become A LOT easier to grasp and understand once you are good at trading on dailies and weekly charts.

Any good trader that is really making good money and is surfing on these forums would be able to confirm this fact.

Learn to trade off dailies and then day trading would become a lot more understandable.

 

[enragedcow]

A lot of new traders start from day trading which is very very bad. Day trading should be started only after one has mastered trading of daily or weekly charts.

Starting from the most difficult end of the deal and then expecting large profits is not sustainable. Day trading would become A LOT easier to grasp and understand once you are good at trading on dailies and weekly charts.

Any good trader that is really making good money and is surfing on these forums would be able to confirm this fact.

Learn to trade off dailies and then day trading would become a lot more understandable.

you make an excellent point

but the fractal nature of price patterns in technical analysis such as support and resistance, pennants, flags etc means that the day trading chart can look more or less like a weekly/yearly/millenniumly chart (ok the last one is hypothetical) therefore i put it to you that day trading and trading off dailies is sufficiently similar to decrease any imagined difficulty

also if you are trading forex day trading can often be the only way you can trade it because you'd have to have a huge amount of capital to trade off the dailies just to ensure your risk is acceptable

eg: day trading long on eur/usd at 1.5666 with a stop at 1.5600 (66 pips because that's the technically significant level based on this hypothetical system)
vs

daily chart trading long on eur/usd at 1.4940 with a stop omg all the way at 1.4751 (again a technically significant level based on this hypothetical; system) that's 189 pips

account size $20,000 might be ok with 189 pip risk but account size $1,000 - $5,000 probably won't be

although if by more difficult you mean more stressful or harder to stick to your rules because you will be taking much more trades with a lot less time to think then we are in complete agreement