Applying to Prop Shops

[clicksta]

I'm at the stage of my trading where I want to take it seriously and do it full time. I have been trading on and off for 4 years. I am sound in TA, risk management and more importantly self management.

I would like to apply to prop shops as a fully backed trader, as I don't have the funds right now to go it alone. Would I prejudice myself if they knew I'd had some experience of trading, as I've heard that they like to mould you as they see fit and they don't want traders who think they know it all?

Your help appreciated.

 

[Directional]

depends if you were looking to get onto a grad scheme, or just go in as a backed trader with your own method.

If you have 6-12 months of statements showing consistency of profits and low risk, you can probably get a backed deal somewhere and trade your own method with a firms money.

If you want to go the grad scheme route and be taught the firms methodology, you'll have to trawl efinancialcareers or the arcade directory here on T2W and find a firm thats recruiting and see what sort of applicants they want.

 

[jm99]

If you have 6-12 months of statements showing consistency of profits and low risk, you can probably get a backed deal somewhere and trade your own method with a firms money.

.

arb, what sort of returns % wise would be deemed acceptable for getting on a backed deal??

 

[Directional]

I've never been through that particular hoop so I dont know unfortunately.

They would look at risk vs reward - risk being the bigger concern since if you make money on a backed deal they only get to keep a percentage of it, whereas if you lose money they get to eat the whole loss.

It'd be a business decision - look at it from their viewpoint - if it were £50k of YOUR money, would you let some guy you dont know, with your methods results in his hand trade your cash in return for say 50% (or less) of the profits? if your performance is good enough that you'd say yes then thats possibly what the arcade would say.

 

[Parky]

I've never been through that particular hoop so I dont know unfortunately.

They would look at risk vs reward - risk being the bigger concern since if you make money on a backed deal they only get to keep a percentage of it, whereas if you lose money they get to eat the whole loss.

It'd be a business decision - look at it from their viewpoint - if it were £50k of YOUR money, would you let some guy you dont know, with your methods results in his hand trade your cash in return for say 50% (or less) of the profits? if your performance is good enough that you'd say yes then thats possibly what the arcade would say.

For a backed trader getting into an arcade for the first time the usual deal is 50/50, after all costs and that includes desk costs and usually higher than average commission rates.
This presupposes that they will be providing training either via a trainee trader program or bespoke.
If you have 6 months track record of derivatives trading (not spread betting!) you can go for 60/40. However new entrants are finding trading rooms are not taking on many new backed traders at the moment and trainee trader places seem to be getting thinner on the ground as well.

 

[PualoP]

For a backed trader getting into an arcade for the first time the usual deal is 50/50, after all costs and that includes desk costs and usually higher than average commission rates.
This presupposes that they will be providing training either via a trainee trader program or bespoke.
If you have 6 months track record of derivatives trading (not spread betting!) you can go for 60/40. However new entrants are finding trading rooms are not taking on many new backed traders at the moment and trainee trader places seem to be getting thinner on the ground as well.

It's very true about what you say about trainee trader places getting thinner on the ground. I remember the old days when firms would take 20 blokes (occasional bird) practically off the street every few months and let them punt around on the gilt or bobl and 1 or 2 of them were bound to make.

That business model just doesn't work anymore. Prop shops just aren't producing the calibre of trader anymore to make a living. I think the main reason for this was the explosion of growth in the last couple of years in the numbers of locals. The 'free money' or market inefficiencies have all but been squeezed out so it's alot harder for new traders to get up and running and stay consistent.

That's why all the big arcades are now charging for there 'trainging programs' becasues the percentage of grads that make it has shrunk from 20-15% down to about 1-2%......poor *******s.

 

[Parky]

It's very true about what you say about trainee trader places getting thinner on the ground. I remember the old days when firms would take 20 blokes (occasional bird) practically off the street every few months and let them punt around on the gilt or bobl and 1 or 2 of them were bound to make.

That business model just doesn't work anymore. Prop shops just aren't producing the calibre of trader anymore to make a living. I think the main reason for this was the explosion of growth in the last couple of years in the numbers of locals. The 'free money' or market inefficiencies have all but been squeezed out so it's alot harder for new traders to get up and running and stay consistent.

That's why all the big arcades are now charging for there 'trainging programs' becasues the percentage of grads that make it has shrunk from 20-15% down to about 1-2%......poor *******s.

Agreed but the "black box" automated trading models have removed a lot of the slack in the market place so even experienced traders are having to do more round trips to achieve the same results.
Also the model stopped working when the percentages in terms of splits went too far against the trading rooms and their commissions got squeezed hanging onto the profitable traders. What used to finance the new traders was existing income from the experienced traders, you use todays winners to find tomorrows.
However as your income dries up so you have less money to speculate.
As arcades stop backing traders and generating new traders so things will slowly swing back the other way.
As far as the trainee trader programs go alot of trading groups will not take people on if they have been through such schemes, the theory being it is easier to train from scratch than to take on someone with preconcieved ideas and bad habits. Plus the bias that if they were any good the house doing the training would have offered them a place!

 

[charliechan]

maybe things would be different if the arcades had the gumption to look elsewhere other than short end (yield) futures?

business risk v market risk? is there much difference?

 

[$$$]

Cv please. [email protected]

 

[jiggly]

I agree, Having 6-12 months worth of statements is the best thing for you if you want to trade and be taken seriously by your potential employers and most importantly of all for yourself.

you need to be convinced with your ability before you can convince anybody else. otherwise you may find yourself working at a firm because you can talk the talk and then not walk the walk. You should give yourself the best opportunity at succeeding, before undertaking this difficult task. When it comes to your career and job search, apply to everyone and anyone.

for someone of your experience, if your profitable they will not bother about retraining you, could they? you will know it all already whether you come across as a know it all or not. everyone trades differently so each trader is encouraged to adapt to their own style and find on their own accord what works best for them. if you havent proved to yourself what i have mentioned above, then you will have to decide whether you need retraining or not.

I wish you all the best in these endevours as I fully understand how difficult the decision and task is.

regards