Australian (ASX) Stock Market Forum

I want to start trading, how to proceed?

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Mr J said:
Some are, most are not. Financial markets follow the same food chain structure as poker. Most have no idea, some have a clue, and few are very good.

I'll be the devil in the ear suggesting you to trade for yourself, but then I am completely biased, so it may not be wise to consider it as advice ;).

Your gambling experience is probably far more beneficial than you realise, or at least more than you state here.
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Nothing wrong with playing devil's advocate ;)

I can definitely see how my background might help me and I certainly agree with you that the economies are structured similarly. It just seems that there are more relative "fish" in the financial markets than there are in online poker in 2009/2010. I also imagine that the market will stay like this for a very, very long time where poker has started to see most of the bottom fall out, thus less easy money trickles upwards...I just don't want to be there at the end when everyone good is fighting for the last few dollars before it all implodes.

One day, I would love to trade for myself but I feel (maybe wrongly?) that I am best off getting my start with limited liability and maximum available resources, which is sort of what I figure a prop shop gives me.
 
BeNice said:
Nothing wrong with playing devil's advocate ;)

I can definitely see how my background might help me and I certainly agree with you that the economies are structured similarly. It just seems that there are more relative "fish" in the financial markets than there are in online poker in 2009/2010. I also imagine that the market will stay like this for a very, very long time where poker has started to see most of the bottom fall out, thus less easy money trickles upwards...I just don't want to be there at the end when everyone good is fighting for the last few dollars before it all implodes.

One day, I would love to trade for myself but I feel (maybe wrongly?) that I am best off getting my start with limited liability and maximum available resources, which is sort of what I figure a prop shop gives me.
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Go get a start on technical analysis and register a DEMO account with Oanda (forex trading). Start practicing and learning how markets move.

Risk no more than one to two percent per trade. Double your demo account first (while only risking one to two percent per trade). If you can do that then you are ready for trading with a SMALL live account. Double your small account and then start to trade with larger position sizes.

Your gambling experience will come in handy from a psychological point of view for sure.

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

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

Good Luck
 
BeNice said:
Nothing wrong with playing devil's advocate ;)

I can definitely see how my background might help me and I certainly agree with you that the economies are structured similarly. It just seems that there are more relative "fish" in the financial markets than there are in online poker in 2009/2010. I also imagine that the market will stay like this for a very, very long time where poker has started to see most of the bottom fall out, thus less easy money trickles upwards...I just don't want to be there at the end when everyone good is fighting for the last few dollars before it all implodes.

One day, I would love to trade for myself but I feel (maybe wrongly?) that I am best off getting my start with limited liability and maximum available resources, which is sort of what I figure a prop shop gives me.
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I think you're right to make the jump. Financial markets are saturated and mature, offer many more opportunities, far better scaling of growth, better longterm security etc. I don't think trading is any harder than poker, and I can only compare it to when I played - '05.

I can see why you would feel a little hesitant, but it's probably no different than when you decided to study poker. I've used forums as my primary resource in my initial phase, and while a mentor would have helped, it wasn't really necessary. I imagine a good online poker player would be used to going through forums and discovering the hidden "gems". I'm sure it would be very handy to have other traders to talk to in person, and especially a mentor, but I don't think it's necessary to be profitable. I suppose it might depend on how you learn, as some people teach themselves, while others need or just prefer a teacher.

The only advantage that really interests me with prop trading is Other People's Money. Anything else would just be a bonus.
 
BeNice said:
I hate to say it, but you've likely missed the gravy train. Still doable but not "printing money" these days. I missed 2005/2006 myself so I didn't get the best of it either, very tough these days. The learning curve has steepened exponentially over the last two years and I only see it getting worse. If you want to play, learn Pot Limit Omaha instead of holdem.
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BeNice, what's happened to the Poker world?

Isn't there still a huge US and international market?
 
adobee said:
Where would you look at these jobs ? Are they advertised or better of speaking with a recruiter. ..
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Dude, did you click on the link? That's where you look.

And as for speaking to them, I'm guessing it can't hurt - just look at the companies offering the jobs in the link provided, go to their home page, and look for something like "Contact Us". Welcome to the internet! :)

I have to say, the whole prop shop thing comes as a bit of a revelation to me. It should have been obvious, really - it makes too much sense not to exist - but it never occurred to me.

Ah well, it looks unlikely I could get anything for Canberra / remote without (at the very least) experience. Having done the first couple of the 100 or so hard yards necessary, and with some scalping skills slowly developing, I think I'll have to sigh enviously and plow on alone (apart from for you very fine intertube people, of course :D ). But it's a very interesting thing to consider, if I can get my **** together.
 
Thanks guys, I think when I was told that you could draw on a negative account it was with reference to traders who had build up trust in the company. It makes sense, thanks for clearing that up. Was given some bad/incomplete info!

@Aussiest:

Online poker is still profitable but there are a lot of bad signs for its future, I'm just trying to be cautious. First, 6max No Limit holdem started to get very tough, even the smallest stakes were tightening up and getting aggressive. The midstakes games (2-4 thru 5-10) that I was playing were getting tougher so I figured I'd try to outrun the trends and took up heads-up NLHE and Pot Limit Omaha. They were good for a while but everyone caught on very fast which wasn't helped by training sites and "Pokertableratings.com" (which should really be banned in my eyes).

I just keep seeing games get tougher, I'm still beating the stakes I am playing for a good clip but I know I need to start thinking of the future, which looks bleak for a number of reasons. Trading seemed like an obvious step.
 
Anyway, thanks a lot for the good suggestions. I will be looking into all the prop houses mentioned. Trembling Hand, once again you have been exceptionally helpful. Thank you very much.

So, if drawing against a negative account is not generally allowed for new traders, logically I would imagine that you are not obliged to repay the amount that your account is stuck. Further, this leads me to believe that the prop shops would HAVE to have very stringent requirements with respect to how negative your account can be before you get the boot. I'd imagine that this amount has to very excruciatingly low. Am I far off base here? I mean, you could take the best trader in the world and he could lose a decent amount over a smallish sample and get ****canned.

Do they have some sort of probabilistic way of determining whether or not you should be let go for being a "true" loser? I'd imagine that they could use some sort of confidence interval based on trading volume and market volatility etc etc to stop themselves from firing an actual winner based on a bad sample...at least only fire a true winner <5% of the time or w/e
 
BeNice your making it way to complicated.

Before you get to go live you have to show in real time in sim hat you can trade & control risk.

Then when you do go live you have daily loss limits and Max position sizes.
 
Trembling Hand said:
No profit = no money.

I haven't hear of a prop shop allowing you to take money that you haven't earned. Especially not a new trader.

Oh and you will also have to pay monthly desk costs (just like office rent) and other costs depending on what software & data you use.
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Just for interests sake, a ball park figure for these costs?
 
Im negative $60000 today in my ANZ account by accident and not so much as a phone call to let me know
 
nomore4s said:
Just for interests sake, a ball park figure for these costs?
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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.
 
BeNice said:
@Aussiest:

Online poker is still profitable but there are a lot of bad signs for its future, I'm just trying to be cautious. First, 6max No Limit holdem started to get very tough, even the smallest stakes were tightening up and getting aggressive. The midstakes games (2-4 thru 5-10) that I was playing were getting tougher so I figured I'd try to outrun the trends and took up heads-up NLHE and Pot Limit Omaha. They were good for a while but everyone caught on very fast which wasn't helped by training sites and "Pokertableratings.com" (which should really be banned in my eyes).

I just keep seeing games get tougher, I'm still beating the stakes I am playing for a good clip but I know I need to start thinking of the future, which looks bleak for a number of reasons. Trading seemed like an obvious step.
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Sorry, off topic, but from what i gather, it seems that the skill level is increasing, thereby making competition and profitability a lot harder. Makes sense really as Poker was quite in vogue a couple of years ago.
 
nomore4s said:
And what's that got to do with this thread?
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In response to

Yes, you can draw on a flat/negative account if they trust you. But as said here, not as a new trader.

Good luck with your search/outcome/trading.
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If they trust you, lots of the big institutions seem to turn a blind eye to flat / negative account balances....eg: comsec and ANZ neither batted an eye lid, yet i nearly had heart failure...
 
condog said:
In response to

If they trust you, lots of the big institutions seem to turn a blind eye to flat / negative account balances....eg: comsec and ANZ neither batted an eye lid, yet i nearly had heart failure...
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lmao, that reference is to prop shops and how you earn your money with them and what you can draw from your account. It has nothing to do with big institutions or brokers at all, and it certainly has nothing to do with ANZ or Commsec letting you go into negative with your accounts:confused:

Trembling Hand said:
No profit = no money.

I haven't hear of a prop shop allowing you to take money that you haven't earned. Especially not a new trader.

Oh and you will also have to pay monthly desk costs (just like office rent) and other costs depending on what software & data you use.
Click to expand...

MRC & Co said:
Yes, you can draw on a flat/negative account if they trust you. But as said here, not as a new trader.

Good luck with your search/outcome/trading.
Click to expand...
 
et al,

When considering Prop. Shops, it behooves you to examine how they earn their money.

Most do not look to earn the bulk of their money via profitable trades, although some do, but rather from taking a risk free commission on order flow.

The leverage that they provide has a definite cost. The cost of capital will be the cost to the firm + X%. This also mandates high turnover, as you will find it hard to exceed this cost of capital on swing trades, unless you are in volatile stocks.

This has definite implications for trading strategies that they allow you to use. For example carrying an overnight position is a big no-no with many. The ones that do, will require that you hedge it, this incurs a cost, although, if short you are credited interest on the short capital, which generally is a wash.

The number of shares they expect you to swing in the US is high. I know traders that will trade 3M+ shares a day, that's $30K in commission/day. Finding that liquidity, with enough movement to provide profit can be stressful to say the least.

With this leverage comes the inability to tolerate any drawdown on a position. This means that you need to be highly skilled, as your stops are going to be VERY TIGHT.

Tight stops, vitually guarantee that novices will be fleeced initially at least, and with leveraged losses, 100K in risk capital doesn't last long.

All that being said, some, provide training. Some charge you for this, others provide it and look at it as an investment, particularly those firms that rely more on profitability, than commission for driving revenue.

Of course, you just have to hope that the strategies taught, sit comfortably with your individual psychology, many strategies, unsurprisingly, are hyperactive, with lots of leverage, go figure.

I would recommend learning to trade first, then, approach a Prop. firm, at least you'll have an idea of some of the pitfalls before being launched into the pit.

jog on
duc
 
Duc as usual in relation to prop shops in Oz you couldn't be more wrong.

Virtually every point is wrong.
 

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