Trainee prop trading options, prep, credibility in Australia - Outsider Research

[biggestBSD]

Directional traders would've/should've had a great year.

Assuming they picked the right direction

 

[Mr J]

That's sad how prop is mostly structured. Directional traders would've/should've had a great year.

Bit hard if the markets are 'locked up massively', as has been reported above.

 

[skc]

I think Skc has a deal with propex in qld???

I am not sure what you mean by "have a deal" with Propex in QLD.

I trade equities with Propex and I interact (via chat mostly) with the other traders and trainees daily. So I see who's around, whether someone's been making sound calls etc.
But I am not directly involved with the training beyond that.

 

[OmegaTrader]

I am not sure what you mean by "have a deal" with Propex in QLD.

I trade equities with Propex and I interact (via chat mostly) with the other traders and trainees daily. So I see who's around, whether someone's been making sound calls etc.
But I am not directly involved with the training beyond that.

lol speculation

Qld does equities
you do equities
you trade with propex.

assume QLd
or involvement with qld equity branch

So you work for propex in a defacto way. etc

 

[undercurrent]

1) To expedite the learning curve ( I am still an amateur/learning)

This is a valid reason but expedition of learning curve is a function of hours (aka screen time). It can be done at home without paying desk fees/expensive platform fees/profit splits etc. by putting the same number of hours as most folks do @ Prop firms.
So what is stopping you???

2) To share in monetary capital ( I have limited capital)

You will be trading the smallest possible size for 6 months to a year in a Prop firm till you show any consistency in profits. This is where 90% of the folks quit or are asked to quit.

As someone pointed out earlier, why do you think this won't be you?

3) To share in externalities (ideas and resources etc)

You are basically competing with everyone trading the same products and similar strategy.
Why do you think someone will share their hard earned lunch with you?
On the contrary, many find that it can get hostile at times, especially early on.
You will start to truly exchange ideas when you are already doing well (become the 10% who made it) and have something offer to the senior folks.

4) The perception of social legitimacy (Pops up in the back of the mind every now and then )

A 'Trader' by its very definition is a social rebel who has kicked the security of a paycheck.
... doesn't give a damn about 'social legitimacy'
... doesn't have to prove it to anyone.
... don't care what others think about what they wear, eat, drive

A true story about an indie trader who made > $25 million last year was asked to pick a place for a dinner meetup. That trader promptly choose a regular $20 kinda place...

Now tell me who are you who who ...

Just another trader who wants to help...

 

[OmegaTrader]

This is a valid reason but expedition of learning curve is a function of hours (aka screen time). It can be done at home without paying desk fees/expensive platform fees/profit splits etc. by putting the same number of hours as most folks do @ Prop firms.
So what is stopping you???



You will be trading the smallest possible size for 6 months to a year in a Prop firm till you show any consistency in profits. This is where 90% of the folks quit or are asked to quit.

As someone pointed out earlier, why do you think this won't be you?



You are basically competing with everyone trading the same products and similar strategy.
Why do you think someone will share their hard earned lunch with you?
On the contrary, many find that it can get hostile at times, especially early on.
You will start to truly exchange ideas when you are already doing well (become the 10% who made it) and have something offer to the senior folks.



A 'Trader' by its very definition is a social rebel who has kicked the security of a paycheck.
... doesn't give a damn about 'social legitimacy'
... doesn't have to prove it to anyone.
... don't care what others think about what they wear, eat, drive

A true story about an indie trader who made > $25 million last year was asked to pick a place for a dinner meetup. That trader promptly choose a regular $20 kinda place...



Just another trader who wants to help...

Good depth of posting..

Thank you for that insight.

You should see what I wear and look

hahaha

Actually probably not


So what does one do now?


Learn to fish..

 

[undercurrent]

You should see what I wear and look

So you already have your 'signature' style in place
Well done!

So what does one do now?

Learn to fish..

Don't get me wrong.

For all you know, you can be the next 'super star' prop trader.

I just wanted to aid in bringing clarity and objectivity to your decision making since there is so much confusion and hype about the Prop trading industry.

There are good and legit Prop Trading firms out there...others have already shared their experience.

The more important thing is to find what 'fits' you since what is good for one trader may not be good for the other.

E.g.

A college grad with almost zero knowledge of trading lands a gig at a prop firm and is passionate about trading (or so they would like to believe) probably can get accelerated learning about trading even if they last only 6 months. But they need to be realistic that their chances of making it are very slim and are still willing to spend their time and effort for no $$$$.

or

An Experienced Trader who needs reliable and cutting-edge infrastructure with ultra-low commissions for their strategy to be viable can probably look for a Prop Firm which caters to such traders.

Bottom line is....

Know what you 'really' need to take your trading to the next level and whether that means going the Prop Shop route.

Then work your way from there...

Good luck!

 

[skyQuake]

Also what is

What is struggling in terms of number for experienced folk? etc

Making less than last year

Desk fees/data/software really adds up. $50-100k a year is average for equities, less for futs.
Worst part is you work out the sums at the end of the year and the split goes:

broker>prop split>desk fee>software>ato>better half>you

 

[skc]

Making less than last year

Desk fees/data/software really adds up. $50-100k a year is average for equities, less for futs.
Worst part is you work out the sums at the end of the year and the split goes:

broker>prop split>desk fee>software>ato>better half>you>drinks

Just to finish the chain.

 

[Mr J]

broker>prop split>desk fee>software>ato>better half>you

Trade futures, stay single, and move to Sgp/HK

 

[jjopd2001]

Hi All, just a quick question if I may.
If one wants to join a prop firm like Starbeta or Genesis, as a experienced trader, what would be the typical resume look like? say, 3~6 month of profitable P&L, win ratio over XX, etc..

 

[Trembling Hand]

Hi All, just a quick question if I may.
If one wants to join a prop firm like Starbeta or Genesis, as a experienced trader, what would be the typical resume look like? say, 3~6 month of profitable P&L, win ratio over XX, etc..

What are you trading and how first? It has to fit with the firm. No point taking a approach to them that they are not set up for or comfortable with.

Metrics as far as win rate, % return etc mean little to prop firms. They are mostly interested in how much you are going to draw down each day for the size they give you.

 

[Wysiwyg]

Makes me wonder why they look for discretionary traders. Maybe profitable trades aren't repeatable for automation.

 

[Trembling Hand]

Makes me wonder why they look for discretionary traders. Maybe profitable trades aren't repeatable for automation.

Huh? What do you mean?

 

[Wysiwyg]

Huh? What do you mean?

Well I think if any system is able to be automated it would have been done by these companies. Why pay for a human when a machine could (supposedly) do better. Better especially compared to the trader newbies with little experience.

 

[Quant]

Well I think if any system is able to be automated it would have been done by these companies. Why pay for a human when a machine could (supposedly) do better. Better especially compared to the trader newbies with little experience.

i think consistent discretionary traders are systematic by nature which opens it up to algo trading but this intuitive thinking algo is beyond the average trader/ prop shops paygrade , investment banks sure ...

 

[Trembling Hand]

Well I think if any system is able to be automated it would have been done by these companies. Why pay for a human when a machine could (supposedly) do better. Better especially compared to the trader newbies with little experience.

Couple of things

1. They are low risk. 20 newbies have the combined $ risk of 1 established trader. So if all the newbies blow out and 1 established trader has a good month then no money lost. Cheap way to find the diamond in the rough. (in effect 10 blow out, 7 are BE, 2 show promise and one is a winner which when you add in exchange rebates that is a win overall)

2 Its more likely to spread your edge. You have 30 good traders trading the same product. All punting away doing something different. How many systems can you run intraday on the same product at the same time? Sooner or later if you have only a few systems you are the market with the size we are talking. And the automation of the one guy jobbing away on a 10 - 20 lot doesn't work on a 200 to 500 lot!!

3. Funnily the large clearers that prop uses will not allow automation onto their systems with the margin model prop uses!! Up to at least last year anyway. Crazy hey??!!

4. With a system the risk model (position sizing, when its on or off etc) is designed before its started. Not so with prop. You can really size up by many times when the opportunity presents itself. Its possible to job away month in month out then get a runner and just add and add and add...... make many months worth in 1 trade because you are X bigger. In the long run that leads to some serious out performance.

5. And its what they do. Don't underestimate tradition.

 

[Wysiwyg]

Mate that is the most well thought out reply you have ever given me. A post "like" has been duly awarded. Thank you.

 

[Trembling Hand]

Mate that is the most well thought out reply you have ever given me. A post "like" has been duly awarded. Thank you.

We can all surprise from time to time I guess..

 

[Mr J]

You have 30 good traders trading the same product. All punting away doing something different. How many systems can you run intraday on the same product at the same time?

Those 30 traders trading the same product aren't all doing something different - they'll very often have heavily correlated positions. I wouldn't be running all these systems on the same product. I don't need to focus as intensely on any one market as when discretionary trading, so trading more markets is logical.

As for your question Wysiwyg, algos are gaining ground at prop shops. I'd argue that they're supplementary and not a replacement for the entirety of discretionary trading.