I want to start trading, how to proceed?

[MRC & Co]

Actually I would say a few of those points are right. You need very tight stops because with splits/desk fees, you have to leverage up far beyond the average trader, so in this respect, your strategy MUST include tight stops.

They also do make a portion of your brokerage fee, though it is still cheaper than retail.

It is a good opportunity to get cheap brokerage, fast execution and learn a lot around a heap of traders, but at the same point, it is by no means a gift, there are many drawbacks.

 

[MRC & Co]

desk fees

BTW nomore400s, desk fees, average, prob around 3kish per month I would say.

 

[chern]

- If I start trading; lose $20k and draw $5k from my account ("salary" I suppose) I am in the red for $25k
- If I then make $55k trading, I repay the $25k negative balance and then get $15k for myself ((55-25)/2)?

That can't be right... if that is the case I would draw 100k, have negative balance, make 100k and have zero profit while being up 100k. =)

Not so sure. Maybe Mr C can answer. Its in the hundreds per month but remember you are getting Super fast access straight to the exchange plus a on site IT support & of course you are going to save on cheaper brokerage than a retail trader.

If your moving a biggish line its going to be unnoticeable. But I'm sure fore someone starting on 1-2 contracts its a drag.

Realistically how much return can be made from 1-2 contracts?

BTW nomore400s, desk fees, average, prob around 3kish per month I would say.

They also do make a portion of your brokerage fee, though it is still cheaper than retail.

It is a good opportunity to get cheap brokerage, fast execution and learn a lot around a heap of traders, but at the same point, it is by no means a gift, there are many drawbacks.

Would the drawbacks at such a prop shop outweigh the advantages Mr C?

It sounds like a challenge to start at a prop shop and become profitable bringing home a decent wage. Sounds like to make an average 4k a month, you'll need to make 11-12k a month from 1-2 contracts. Can someone shine a light on this ?

Sorry if I seem to be hijacking this thread, but I have wanted to do trading for a while but I think that I really need to find the time to be able to focus on it. Live and breath the market.. Propex sounds like a great place to start, good environment, good support. Only question, is how soon before I can bring home some wage?

This forum is fantastic..

 

[Trembling Hand]

Realistically how much return can be made from 1-2 contracts?

Anywhere from lossing your whole account to $8,000 per day.

 

[chern]

Thanks for the response TH. So I guess, 1k to 2k consistent should not be too much to ask? Time to work really hard.. hahaha...

 

[Trembling Hand]

So I guess, 1k to 2k consistent should not be too much to ask?

Very few every get close

 

[white_goodman]

Thanks for the response TH. So I guess, 1k to 2k consistent should not be too much to ask? Time to work really hard.. hahaha...

not trading 1 or 2 lots, very possible to do just not every day

 

[MRC & Co]

Would the drawbacks at such a prop shop outweigh the advantages Mr C?

It sounds like a challenge to start at a prop shop and become profitable bringing home a decent wage. Sounds like to make an average 4k a month, you'll need to make 11-12k a month from 1-2 contracts. Can someone shine a light on this ?

That's a good question.........one I can not answer. There are a lot of positives, mostly the learning of just being around other traders, but your numbers there are about right, so you cannot be doing 1-2 lots if you want to cover costs and earn a decent wage unless you are extremelly good and consistent.

Which moves to the next point, and the largest of them all: You will have to do size. But, this will cause you to be whipsawed out a lot more on trades you are correct because you don't have a large enough risk tolerance trading large volume.

Basically, it comes down to this:

Markets are good: volatile and readable, Prop pizzes on anything you could do as a retail trader.

Markets are sh*t: You are better being catious and doing small size, so makes Prop very hard as you aren't afforded that luxury if trying to cover costs/splits etc.

The job is feast or famine, simple as that. Bringing home an average 'wage', is very rare. You can have killer months, but you will also have ones where you won't bring home a wage at all. That's the life of a trader.

 

[chern]

The job is feast or famine, simple as that. Bringing home an average 'wage', is very rare. You can have killer months, but you will also have ones where you won't bring home a wage at all. That's the life of a trader.

Sounds like it's gonna be one heck of a rollercoaster ride if I end up in prop.

Being able to learn at a prop almost definitely would be the BEST advantage in speeding up the learning process and going from zero to hopefully hero. Haha...

 

[BeNice]

Hey guys, just thought I'd check in since this creating this thread was instrumental in my pursuit of a job in trading circles.

I was picked up by a market making firm and currently reside on a highly regarded Nikkei desk. My learning has accelerated perpetually and I began to feel quite confident in my progress in financial markets.

In mid April, I started to work on my own short-term algo trading models (not HFT tick by tick stuff, but still an intraday, futures based approach) built on technical indicators, statistical measures and option pricing which have proven quite profitable through my backtesting, even with terrible fee structures. I feel that the strength of my models come from my understanding of how options markets affect futures markets. I will not expand on this point since I am quite sure I have some form of competitive advantage here and frankly, if one knows how options work inside out, it is quite easy to find these relationships.

I have also, along with a few friends, built several winning models for betting sports and also trading price dynamics/order flow on betfair. I have additionally taught my parents how to allocate shares to their existing portfolio optimally and how to choose new longer-term investments based on my own statistical methods.

My progress in trading has definitely been shaped at least partially by creating this thread and I thank everyone who gave me advice. I have a lot of options (pardon the pun) going forward and I feel very good about my progress in this industry/game. I am going to participate in this forum more and more going forward. I am still green in a lot of ways but I see good things on the horizon.

Maybe prop trading for me next, maybe a hedge fund...who knows? Everyone who posted in this thread helped make it possible to simply know where to start and I sincerely thank you.

 

[Wysiwyg]

I'm a large long term winner at poker and also seemed to enjoy finding some arbs in the sports betting world. Basically, I have mid 6-figs in savings from poker now but I'm looking at moving away from full time poker and I like the idea of moving towards the markets. Poker is becoming a worry with regard to its long term viability. The poker economy seems to be winding down a bit and I see trading as an area that will "always" be fruitful/liquid for those that can beat it.

I seems our paths have many similarities. I too have done exceptionally well at poker. Starting with a meager 10 dollars I surmounted well over 100 dollars. It was easy for me because most of the time I can visualise the next card in the pack so have an edge over my competitors. I too have grave concerns for the long term viability of poker. As they say, you just never know these days.

I feel like a hopeless case at the moment, I don't have any particular background in this area and I'm asking questions which I think may attract some criticism. That said, I'm am analytically/numerically/logically very skilled and I come from a background of working in an extremely volatile environment and thriving on it. I feel like this (trading) is where I need to be and I would appreciate any advice that you are kind enough to throw my way.

Within six months you should be pulling in the big ones. Your skill set and experience in a volatile environment will see to that. In your most recent post you have proven this. As follows.

In mid April, I started to work on my own short-term algo trading models (not HFT tick by tick stuff, but still an intraday, futures based approach) built on technical indicators, statistical measures and option pricing which have proven quite profitable through my backtesting, even with terrible fee structures. I feel that the strength of my models come from my understanding of how options markets affect futures markets. I will not expand on this point since I am quite sure I have some form of competitive advantage here and frankly, if one knows how options work inside out, it is quite easy to find these relationships.

As you have discovered since January, trading market instruments is an easy progression while constructing algorithmic trading models is, as I found from being naturally gifted myself, an exciting phase of growth.

My progress in trading has definitely been shaped at least partially by creating this thread and I thank everyone who gave me advice. I have a lot of options (pardon the pun) going forward and I feel very good about my progress in this industry/game. I am going to participate in this forum more and more going forward. I am still green in a lot of ways but I see good things on the horizon.

Yes the depth of experience here stands many people in good stead as they take the step from newbie (for want of a better word) to trader. Your participation will be greatly appreciated and as for being green in many ways well you know what they say in this business don't you?
"That I hold here, in my mortal hand, a nugget of purest Green."

Wyg.

 

[frugal.rock]

Do this tutorial while you are at it.
http://www.babypips.com/school/

https://fxtrade.oanda.com/your_account/fxtrade/register/game/signup

A couple of links from an old thread that still work... amazeballs.