CanOz's Capital - a virtual prop shop

[CanOz]

CanOz's Capital-a virtual prop shop


Concept: recruit 3-5 keen, wanna be traders. Train them over a 3-6 month period. Give them access to my capital with tight risk controls, monitor progress, reward good performance and cull non-performers.


Advantages: compared to a physical firm, no overheads or very low.


Disadvantages: remoteness, inability to act swiftly to kill dangerous positions


The trainees would be responsible for their own data feeds and infrastructure costs. They would be required to have software that would have a minimum of functions.


The training would be one on one and group settings using virtual meetings.


Trade reviews on sim accounts would be used to track progress grasping basic concepts.


Responsibility for the daily setup and context, trade ideas etc., would be shared and rotated amongst the trainees to encourage a team approach.


All the elements of a prop shop, but virtual.


The trainees would need to pass a rigorous selection process that would include a review of their history and back story with an emphasis on athletic achievements, risk management in games of chance, achievement in game theory practice, disciplined behaviour or training, honestly and integrity. Successful candidates would sign a confidentiality agreement.


Successful trainees would sign a binding contract to trade my accounts for a specific period of time with escalating profit share arrangements.


If the model is successful we could then attract more capital and expand the recruiting and training.


This is really just a numbers game. Manage the risk, recruit, train, trade, reward, cull, rinse and repeat.

Now recruiting.

 

[ducati916]

The 'Turtles' concept.

With the 'Turtles' a strategy was taught and provided. The majority of trainees couldn't execute the plan.

Are you seeking to train in a methodology, or, simply train in a basic risk management style, looking for a variety of trading strategies from your team?

The latter is the more interesting experiment as you will gain diversification in strategies which could ensure higher profitability on aggregate across various markets.

jog on
duc

 

[CanOz]

Yes duc, the latter. The prop model typically encourages the trainees to develop their own plays and strategies. I can help by providing a stable of plays that work in this environment, also providing regime change hints and overall context.

They would be encouraged to develop and share their own plays and rewarded for that as well.

 

[CanOz]

The most interesting part of this concept is that the only risk before becoming a successful trainee trader entrusted with capital, is time and some data and infrastructure expenses. For me, it's only time as I'm already baring the cost of data and infrastructure.

 

[Roller_1]

Sounds interesting CanOz, turtles v2. What're you looking at trading in the program?

 

[ducati916]

The trainees would need to pass a rigorous selection process that would include a review of their history and back story with an emphasis on athletic achievements, risk management in games of chance, achievement in game theory practice, disciplined behaviour or training, honestly and integrity. Successful candidates would sign a confidentiality agreement.

If you are starting them [trainees] out on a simulated account...why even bother with this. The time that you would need to accurately check CVs etc could be better spent. While I understand the criteria is supposed to increase the chance of a trainee being successful...does it?

You are limiting your chances of finding that 'natural'. Video game players could also fulfil many of the criteria for trading...yet I wouldn't trust them to walk my dog.

jog on
duc

 

[ducati916]

Responsibility for the daily setup and context, trade ideas etc., would be shared and rotated amongst the trainees to encourage a team approach.

Paranoia would probably cause this to fail.

Even assuming you could get past the paranoia, and you had 1 hyper-successful strategy, essentially everyone would copy that strategy, which removes any strategy diversification benefits that you might have achieved or expected.

jog on
duc

 

[CanOz]

Duc, be careful you're biases are showing!

 

[ducati916]

Disadvantages: remoteness, inability to act swiftly to kill dangerous positions

All the prop-shops that I have traded with have their own platform. That is the only way risk managers can manage trades/traders that are out-of-control.

If you are not going that route, how do you plan to trade your capital via your traders?

jog on
duc

 

[ducati916]

Duc, be careful you're biases are showing!

Of course, I am no more immune to human frailties than the next chap.

jog on
duc

 

[CanOz]

Sounds interesting CanOz, turtles v2. What're you looking at trading in the program?

Only futures, Eurex and globex. I'll need to manage risk, so I don't want to be up all night.

 

[CanOz]

Actually duc, cqg and interactive brokers both have great risk tools available now.

 

[ducati916]

Actually duc, cqg and interactive brokers both have great risk tools available now.

Ok, fair enough. I have never used those platforms.

jog on
duc

 

[Quant]

Interesting concept but lets just get a handful of gun trader/coders together and algo our way to world domination and I'm in . My idea of a prop shop has no people in it , just lots of blinking lights and whirring gears .

I can see you tearing your hair out doing this tbh , emotions always kill it , much prefer a Tradinator


PS the turtle traders just lucked out trend following basically the most bullish period in market history , there is a reason why what they do doesn't work anymore .. Turtles fail in anything but low volatility bull runs

 

[peter2]

What are you doing?

IMHO you should get a mentor (and pay them, of course) to help you become a better trader yourself. This might be a much cheaper option than what you're proposing.

UNLESS you'd rather be a trading coach and desire the interaction with others in a business that you love. The home office is a lonely place.

 

[CanOz]

What are you doing?

IMHO you should get a mentor (and pay them, of course) to help you become a better trader yourself. This might be a much cheaper option than what you're proposing.

UNLESS you'd rather be a trading coach and desire the interaction with others in a business that you love. The home office is a lonely place.

You know nothing about me or my p/l. You obviously assume that because I don't have the discipline to post trades and records religiously like you that I must not be profitable or something. I wouldn't even dream of doing this unless I was extremely confident in having a profitable method I can stand by and teach others.

My issue is not capital, not ideas and plays, it's time to execute them. I have two young sons that I have committed my time to...therefore I desire something that is more balanced in my life. Intraday trading is a young man's game. I'm happy to train and manage the risk while still trading my longer term plays.

The only mistake I made was to post my plan on ASF.

Thanks to the others that provided constructive feedback.

 

[CanOz]

A typical example of why I don't have time to trade. CL had got a real bid on that last low and I was in front of my screens with my 5 month old son. I'd just bathed him and I was just entertaining him when I noticed that the volume delta on CL had really taken off. When I checked the heat map I could see a ton of buying as shorts started to cover, I knew instinctively that if price could get above the point of control then shorts would throw in the towel. I know this from 5 years of screen time. So I put my order for 3 to take the breakout, preferring to sit on a limit order and nab the retest, but alas my son was getting impatient for his dinner.

Then I sneezed....my son was startled and cried unstoppable for 15 minutes. I scrubbed the order and went upstairs, only to see later how well the play worked....again. This sh** is not hard.

 

[ducati916]

My issue is not capital, not ideas and plays, it's time to execute them. I have two young sons that I have committed my time to...therefore I desire something that is more balanced in my life. Intraday trading is a young man's game. I'm happy to train and manage the risk while still trading my longer term plays.

Is it 'day-traders' that you seek?

Day-trading requires:

(a) a very good system/strategy; and
(b) high discipline for entering/exiting; and
(c) ability to concentrate for long periods; and
(d) ability to intuitively [lots of experience] sense market conditions and change strategies; and
(e) consistency in all the above.

Swing trading on the other hand, is much less stressful. It still requires (a), (b), (d) & (e) but dispenses with (c), which is the primary cause of a breach of (b) as sheer boredom drives you to take marginal trades, or worse still, trades that do not fulfil your criteria at all.

Are you going to implement a swing trading component to your plan?

jog on
duc

 

[CanOz]

Duc I'm already swing trading futures. I want these guys to take the shorter term plays that abound.

 

[ducati916]

Duc I'm already swing trading futures. I want these guys to take the shorter term plays that abound.

Futures. Leverage. Limit days.

I know loads of different strategies for stocks that work most of the time, not too many for futures though.

jog on
duc