It is sort of chicken and egg - I learned to trade working in the hedge fund industry. There might be a prosaic reason why most great traders come from banks or hedge funds - they have a salary, giving them time at the start of their career to learn what works and what doesn't without being worried about making rent (not to mention having an informational and analytical edge)
But, a couple of thoughts, if you are really thinking about this long term and building a career as a pro trader:
- Why not just concentrate on pulling together 6-12 months of low volatility performance with a decent Sharp (setting aside your data costs) and then go to get funded?
- Can you quantify your system and provide backtests for 5-10 years at least, to back up a year of real performance?
There are plenty of prop shops which will provide $1mm capital if you can sustainably pull a few points per day out of the S&P or whatever - however, they will expect demonstrable proof before funding you. When I looked at them 10 years ago, before I was in HF, they either didn't provide a salary or gave you a $1-2k pcm draw, which you had to repay before the profit split (assuming you were in profit). Why not do one of these funded trader challenges from FTMO or whoever? It only costs a few hundred $ I think? If you fail, at least you will know why and what you have to improve. If you win, then you're on your way.
tl;dr Yeah there are serious funding opportunities, but it's on you to prove you are a real trader
Hello, flashman57,
Thank you for your interesting and considerate reply.
Learning to trade in a professional capacity like you’re saying would definitely be ideal, but I think it’s not an option for me as I’m by now probably too old (38) and don’t have the right background (engineering and not finance/data science). Not to mention that proprietary trading doesn’t really exist here in Norway. Mostly, it’s only brokering that’s done here in Norway and as far as I know there’s less than 10 hedge funds doing any actual short term trading. Of course, I could move if that were an option, but I imagine the competition is fierce and the opportunities few.
Get funded trader challenges:
I don’t see these as serious alternatives for getting funding. At best, they give you a shoestring to trade on and as soon as you break a rule you’re gone. Regardless of how good your performance was prior to that. Bottom line is they’re not really looking to fund traders. You will never get any funding beyond the profits you accumulate yourself. So, basically, as soon as you’re funded and in profit, you might as well withdraw your money and trade it yourself for a 100 % profit split.
What I’m currently doing:
I funded an account with $11K and started trading it part-time (while holding a full-time job) in September. By the end of September I was up 49 % with 17 winning days and 5 losing days trading mostly one e-mini S&P 500 contract. My account peaked at $17 200 and I’m currently in drawdown after losing my balance Monday and Tuesday this week.
I got sloppy, greedy and complacent after a very good September. Most of my losses can be attributed to trading when I shouldn’t be trading and not actual poor performance.
I’m determined to get back on track, though.
My goal is to do this full-time, but I have mostly given up on getting funding or doing this professionally. So, I probably just have to trade part-time until I’ve grown my account sufficiently to be able to live off my trading.
It’s back to the chicken and egg. If I can grow my account substantially and have a good track record – would I really want or need funding?
Don’t get me wrong. I’d jump at any opportunity if it was a good one, but it seems like maybe by the time I have something to show somebody, I might not really need it?
Of course, if someone would really stake me allowing me to trade big size at one point, it would change the game for me. If an option, I could also provide my own capital for a cushion or act of good faith.
It may sound delusional and I won’t judge anyone if they laugh, but I firmly believe I’m a very able trader having tracked this market for a long time and having my trading backed by a solid methodology. While I use a predictive/statistical model custom made to my requirements, it’s still a discretionary approach at the end of the day. So I wouldn’t be able to provide any automatic back-tests.
Thank you in advance for any further guidance.
Best,
Johnny