Trainee trader at prop shop/trading arcade

[markies21]

Joining prop

I joined a prop house a couple of years ago starting trading us and german notes before moving on foreign exchange. to be honest, dont expect anything amazing in your first year. e.g by the end of my first year I had an overall max trade size of 200 lots spread over 3 contracts but you will find that if you wanna survive you should use your max size sparingly thereby giving you room to 'breathe'. I stated on a total of 5lots so the volume curve can rise rapidly if you impress. Most new traders lose in their first couple of months but turn it round after so dont be alarmed if initially you start losing! money-wise if you're getting a 50/50 split or above the chances are you will have a very small basic (if any) which is a double-edged sword since you have less to cover in terms of costs (almost all prop firms paying you a basic require you to cover it) but obviously have less security come the end of the month. the place i was at gavea reasonable basic but that comes at a price i.e say if you geta 35% cut, you make £150,000 (after bro costs) in your first year (which would be pretty f**kin good going!), you get a salary of £25000, desk cost of around £10,000, you'll get around £52000-£25000-£10000 so £17000 which is ok but not amazing. The real money comes if you can crack it after 2-3 years and be making upwards of £500000 as companies realise that if you are generating more it pays to give you a bigger cut to keep you happy plusalso they can take a smaller slice of a larger pie! so at my old company they paid around 35% upto around £400000, 50% to about £800000 and over that around 65%. As a wise man once said its a marathon not a sprint and those who can keep up stand to reap the rewards! Having said this, my basic was capped at £50000 so you have to keep making!

Folks

I'm thinking about joining a prop. My situation - I've been in the IT back office of large retail banks for 10 years (contracting for the last 3) and am 28 years old. I have a degree in Banking and Finance (best subjects in Economics, Finance and Derivatives), graduated with a Distinction average. I'm at that age that if I don't get it out of my head that I want to be a trader, I'll lose the opportunity.

After reading this thread I'm in two minds whether prop is the right move, as I've worked my way to the top of my field in terms of earning capacity (last year, my takehome was £165,000) I would have to start out as a Chicken again with no guarantee that I would make it to a Rooster.

If I join a prop firm, I'll be taking a pay cut, which is okay in the short term. But two years on £50k or less even would be an absolute disaster. With the algo's now taking over and profits harder to find, are there opportunities for a discretionary prop trader entering the field to make money? When can I expect to be making >£150k, or more?

I have entered into analysis paralysis which in turn means I'm now doing nothing - not wanting to get back onto another contract in IT quite yet, but at the same time not committing to a prop move.

Please help!

 

[red army]

Folks

I'm thinking about joining a prop. My situation - I've been in the IT back office of large retail banks for 10 years (contracting for the last 3) and am 28 years old. I have a degree in Banking and Finance (best subjects in Economics, Finance and Derivatives), graduated with a Distinction average. I'm at that age that if I don't get it out of my head that I want to be a trader, I'll lose the opportunity.

After reading this thread I'm in two minds whether prop is the right move, as I've worked my way to the top of my field in terms of earning capacity (last year, my takehome was £165,000) I would have to start out as a Chicken again with no guarantee that I would make it to a Rooster.

If I join a prop firm, I'll be taking a pay cut, which is okay in the short term. But two years on £50k or less even would be an absolute disaster. With the algo's now taking over and profits harder to find, are there opportunities for a discretionary prop trader entering the field to make money? When can I expect to be making >£150k, or more?

I have entered into analysis paralysis which in turn means I'm now doing nothing - not wanting to get back onto another contract in IT quite yet, but at the same time not committing to a prop move.

Please help!

Its crazey to guestimate earnings, if you have the passion for trading then go for it and you can fall back on IT....You could be a star and earn 6 figs or a roaster and slack it off after 18months. You won't earn a dime in the 1st year so you will have to do the number crunching BUT you will never know unless you give it a go....

 

[chinabean]

Folks

I'm thinking about joining a prop. My situation - I've been in the IT back office of large retail banks for 10 years (contracting for the last 3) and am 28 years old. I have a degree in Banking and Finance (best subjects in Economics, Finance and Derivatives), graduated with a Distinction average. I'm at that age that if I don't get it out of my head that I want to be a trader, I'll lose the opportunity.

After reading this thread I'm in two minds whether prop is the right move, as I've worked my way to the top of my field in terms of earning capacity (last year, my takehome was £165,000) I would have to start out as a Chicken again with no guarantee that I would make it to a Rooster.

If I join a prop firm, I'll be taking a pay cut, which is okay in the short term. But two years on £50k or less even would be an absolute disaster. With the algo's now taking over and profits harder to find, are there opportunities for a discretionary prop trader entering the field to make money? When can I expect to be making >£150k, or more?

I have entered into analysis paralysis which in turn means I'm now doing nothing - not wanting to get back onto another contract in IT quite yet, but at the same time not committing to a prop move.

Please help!

mate, if you are thinking solely about the money before you have even started then chances are you'll get smoked....sorry but gotta be honest. sure, everyone thinks about making money (i mean that's the end result) but i'm pretty sure that most of the "successful" traders are not so much motivated by money as beating the market....and beating it well!! so being honest, you have to go into it thinking that you'll be successful but that if you're not then f*** it, it's not the end of the world, obviously it's easier said than done but if you are thinking purely about making
£150K/year within two years, I can almost guarantee , it will be at the back of your mind and so there will be at least a few moments (especially early on) where you will be taking it in all holes and instead of thinking how to get out of the situation, your mind will start thinking about how are you ever going to make £150K/year. It may only be for a few seconds but sometimes that is all it takes to lose the opportunity to turn a loser around or at least get a reasonable cut in. to be honest, you should really be thinking about years 3 or 4 and onwards as being the years that you really start to make some decent money as you maybe one of the few that starts really well and keeps it going however, the chances are that (if you are successful) you will take at least 6-12 months but probably longer to really find your own successful "style" and method. Anyway, hope that helps you a bit, i say, go for it but go for it with your eyes open and most importantly be realistic in setting your goals.

 

[Parky]

Markies21,
Firstly you need a little reality check, there is no guarantee you will ever get back to your current income by prop trading. Good prop traders earning the sort of money you currently are enjoying are still out there but are a minority, most earn less.
You are starting from scratch so you are going to have to find a market that gives you the liquidity and volatility you require and then develop a trading style that suits your attitude to risk and gives you an optimum return, all of which will take some time. Even then you have to have discipline, lots of technically good traders loose their way because they are either too greedy or refuse to take losses, again much of what makes a good trader cannot be learned and all your qualifications count for little if you do not have the mental attributes.
The good news is the algos have merely changed the market place, good traders are already using them to their advantage and are working with them rather than fighting against them and although some greedy exchanges have moved the goalposts too far to accommodate algos, other contracts and markets still offer excellent opportunities.
As Chinabean says, if you go into this expecting to make the sort of money you are on, you are unlikely to achieve it. Go in saying I will give this a go for two years and see what happens is a much healthier attitude, trading from fear or need is usually a recipe for failure.

 

[markies21]

Cheers guys. I spent the last couple weeks in the countryside with the family reflecting on what I'm doing, the thing I've realised that there's no reason to pigeon hole or signpost myself to a given path.

I've got to pursue my trading career as if I were to go back to IT (cushy and easy money), I can just forsee myself at my desk hitting F5 on BBC Markets every 10 minutes dreaming about an alternate career. Success or fail, I will give this a go not just to make money, but to get this idea out of my head and move to the next stage of my career, whatever that be.

Schneider are conducting their interviews on the 24th of Sept, got an invite but can't go as I'll be in BKK at the time on my vacation. Oh well... can't win them all.

On the side, I've finished my mech trading system which will daytrade high vol US stocks, and that seems to be working well now. I've got it w/ PF 3.39 average across 15 stocks on a sample of about 400 trades out of sample. Goes into "test automation mode" for the next month before I golive. Figures if I can get some trading history behind me it would get me a better chance of getting into the smaller hedge funds in the long run.

 

[rawrschach]

If you have a system that works there is no point working for anyone imo.

BTW schneider trades spreads only from what I hear - they won't let you trade your own strategy; try futex for that.

 

[mgamble]

Hi, new member on here. I am a final year university student looking to get into trading when I graduate in June 2009. I sent my CV around to a few prop houses just asking if I am the type of person they are looking for. Surprisingly, I got a quick response from Schneider offering me an interview in september. As they don't give much information about the training scheme on their website, i was wondering if any of you guys have any experience with it? Is there any chance of a salary of any kind in my first year? If so, which companies offer it. If i turn out to be a profitable trader, is it standard to be earning £25k+ in the second year? Any tips for the interview, such as example questions or areas to study up on that they might concentrate on?

Any help you can offer would be greatly appreciated.

 

[markies21]

Hello, the long and short of it (ha ha pardon the pun) is that no, there is no guaranteed salary.

"As all STA proprietary traders are self employed, you must be committed and able to support yourself financially both during the course and subsequently (should you be selected to join our Trading team)"

I went through the prop trading dilemma, in the end I decided that it was not for me. Instead, I've resorted to moving to Australia, mech trading overnight, and working my fallback job (IT Contracting) during the day. This gives me the excitement trading, whilst at the same time I'm not living in a shoebox on top of an arcade eating canned beans worrying about whether next month i'm going to make money.

There are plenty of threads on here about people in uni and out of uni considering prop trading. If you're just fresh out of uni, why not pursue a career at an IB - the starting salary would by *MUCH* better and it would give you many more paths to go back on should you decide trading is not for you.

 

[Parky]

mgamble,
No is the simple answer there are hardly any prop shops left that pay a salary, most insist on you putting up some or all of your own trading capital up and some even have the cheek to charge you for your "training" which in itself is usually worthless.
Sadly most "new blood" schemes where companies take on new traders and trained them bit the dust, because the figures no longer worked, you need one successful trader for every 4-5 unsuccessful to make it work and you needed to keep the successful graduates on reasonable P&L splits for a while to make the whole thing pay.
Sadly trainees got greedy and the moment they made money wanted splits that meant you could never make money and cover the losses those that failed accrued and so now next to no one will take on trainees unless they pay money up front.