Got questions about working in prop?

[Technically Fundamental]

Why "Rio" hedge? Why not Antigua or something?

 

[arabianights]

I was trough a recruitment process in a prop trading firm about two months ago and basically I asked all that questions. More questions could be...

Am I going to be forced to execute a minimun of trades per day?
Cutting losses... how do you manage it?
Do I have to pay for training course? (if the answer is yes i'll leave inmediatly)
Are you going to pay every month, or do you follow a three months "capital conservation" scheme?
You said sometihng about pay eschemes before... give me further details on it.
How do you decide 'who' is trading 'what'? (this questions was important in my case)
How do you make your profit?
Is there any mentorship plan in place?
Can I take my own decisions or do I have to follow your rules? What degree of freedom?
From where does the money come from? (they didn't ask this one)
Who are you clearing with?

Cheers, this is the kind of stuff I'm after :smart:

 

[STRTRADA]

I know this may be a question irrelevant to the thread...But what options e.g internships or helping out at a prop firm are there for a 16 year old who is intrested in trading?

If for just maybe the summer holidays or part time...

 

[arabianights]

Why "Rio" hedge? Why not Antigua or something?

extradition law

 

[arabianights]

Anyone know anything about the protradingcourse.co.uk. They want 5000K upfront for their trainging course.

No but they're probably a scam.

 

[arabianights]

assume it's stirs and maybe longer-dated govvies?

I won't be answering any questions about this particular scheme, I'm purely interested in what questions candidates would have...

 

[arabianights]

Motivation letter stating which market/s they would prefer to trade, why they chose those particular markets and what they think they could offer the firm. <- that should cull the cavemen.

Finance and mathematics test.<- Scares people who don't know anything about trading except that they want a million pound. Plus you being you, do you want to be near people who can't do algebra?

Talk your firm up... If it seems like a real high flying place those who doubt themselves will probably feel it's out of their league and not waste their time.

Prospects? What will you be learning? career progression? Working with team or alone? What kind of experience do team have? ... needs to be a bit generic so you don't give them any clues for their "motivation letter".

Clearly defined salary is important if your parents aren't rich and/or you're living alone e.g. you studied in London.


That's the kind of stuff I'd want to know. Hope that helps.

It does, a lot - although I'll have to disagree with some of it, thanks!

 

[Technically Fundamental]

Like what? I'l not stand for this!

 

[gooseman]

I won't be answering any questions about this particular scheme, I'm purely interested in what questions candidates would have...

my thinking in asking this was to weedle out non-starters. i.e. you'll get x% wanting to trade fx, y% wanting equity, z% wanting commodities etc and if a certain market was mentioned in the process form the start that would trim off some of the fat. you see plenty of ads saying "traders wanted" but no clue in what market.,

 

[arabianights]

I don't see that cavemen are a bad thing necessarily

 

[Technically Fundamental]

my thinking in asking this was to weedle out non-starters. i.e. you'll get x% wanting to trade fx, y% wanting equity, z% wanting commodities etc and if a certain market was mentioned in the process form the start that would trim off some of the fat. you see plenty of ads saying "traders wanted" but no clue in what market.,

I know I wouldn't be that picky for a graduate position mate. I'd take whatever I could get just to secure something and start trading what I wanted to trade on the side until I felt comfortable approaching it in a professional manner.

 

[gooseman]

that's fine. just adding some perspective having seen the process from top to bottom

 

[arabianights]

my thinking in asking this was to weedle out non-starters. i.e. you'll get x% wanting to trade fx, y% wanting equity, z% wanting commodities etc and if a certain market was mentioned in the process form the start that would trim off some of the fat. you see plenty of ads saying "traders wanted" but no clue in what market.,

thanks, good point

 

[Technically Fundamental]

Rio as in Brazil? You saying Britain has no extradition power in Brazil?

 

[arabianights]

You need to have a Brazillian kid PDQ I think.

See Ronnie Biggs etc...

 

[BSD]

There really isn't any conclusive evidence whatsoever that ones past education, interviews or assessment centers provide any sort of predictive value-added as to later actual performance.

They just perform the function of gatekeeper that whittles down the number of applicants to a number that can actually be handled.

Math skills have nothing to do with trading success - I practically have mathematical dyslexia - so why limit yourself to applicants that have number crunching skills that also go hand in hand with a dominant left brain and detail fixation, that might make them good execution traders, but hardly outstanding traders in charge of their own book.

Math geeks may and indeed are needed for coming up with structured products to sell to those whose greed let them switch their brains off, or for quants writing algos, but that's about it.

THE Right Brain vs Left Brain test ... do you see the dancer turning clockwise or anti-clockwise?

If clockwise, then you use more of the right side of the brain and vice versa.

Most of us would see the dancer turning anti-clockwise though you can try to focus and change the direction; see if you can do it.

LEFT BRAIN FUNCTIONS
uses logic
detail oriented
facts rule
words and language
present and past
math and science
can comprehend
knowing
acknowledges
order/pattern perception
knows object name
reality based
forms strategies
practical
safe

RIGHT BRAIN FUNCTIONS
uses feeling
"big picture" oriented
imagination rules
symbols and images
present and future
philosophy & religion
can "get it" (i.e. meaning)
believes
appreciates
spatial perception
knows object function
fantasy based
presents possibilities
impetuous
risk taking

Give em these insights from some of the best traders in the world:


Jesse Livermore:

"I did precisely the wrong thing. The cotton showed me a loss and I kept it. The wheat showed me a profit and I sold it out. Of all the speculative blunders there are few greater than trying to average a losing game. Always sell what shows you a loss and keep what shows you a profit.

Disregarding the big swing and trying to jump in and out was fatal to me. Nobody can catch all the fluctuations. In a bull market the game is to buy and hold until you believe the bull market is near its end.

Losing money is the least of my troubles. A loss never troubles me after I take it. I forget it overnight. But being wrong – not taking the loss – that is what does the damage to the pocket book and to the soul.

It sounds very easy to say that all you have to do is to watch the tape, establish your resistance points and be ready to trade along the line of least resistance as soon as you have determined it. But in actual practice a man has to guard against many things, and most of all against himself – that is, against human nature.

A speculator must concern himself with making money out of the market and not with insisting that the tape must agree with him. Never argue with it or ask for reasons or explanations.

It was never my thinking that made me money but my sitting tight."


Dan Zanger:

"Be very quick to sell your stock should it return back under the trend line or breakout point.

Hold your strongest stocks the longest and sell stocks that stop moving up or are acting sluggish quickly. "


Bruce Kovner:

"Michael Marcus taught me one other thing that is absolutely critical: You have to be willing to make mistakes regularly; there is nothing wrong with it. Michael taught me about making your best judgment, being wrong, making your next best judgment, being wrong, making your third best judgment, and then doubling your money."


Richard Dennis:

"The worst mistake a trader can make is to miss a major profit opportunity. 95 percent of profits come from only 5 percent of the trades."


Gary Bielfeldt:

"The most important thing is to have a method for staying with your winners and getting rid of your losers."


Paul Tudor Jones:

"I spend my day trying to make myself as happy and relaxed as I can be. If I have positions going against me, I get right out; if they are going for me, I keep them.

The most important rule of trading is to play great defense, not great offense. Every day I assume every position I have is wrong. I know where my stop risk points are going to be. I do that so I can define my maximum possible draw down. Hopefully, I spend the rest of the day enjoying positions that are going in my direction. If they are going against me, then I have a game plan for getting out."


Michael Marcus:

"Taking advantage of potential major winning trades is not only important to the mental health of the trader but is also critical to winning. Letting winners ride is every bit as important as cutting losses short. If you don't stay with your winners, you are not going to be able to pay for the losers."


Ed Seykota:

"The trading rules I live by are: 1. Cut losses. 2. Ride winners. 3. Keep bets small. 4. Follow the rules without question. 5. Know when to break the rules."


Larry Hite:

"It is incredible how rich you can get by not being perfect."


William O'Neill:

"Investors cash in small, easy-to-take profits and hold their losers. This tactic is exactly the opposite of correct investment procedure. Investors will sell a stock with profit before they will sell one with a loss.

The whole secret to winning in the stock market is to lose the least amount possible when you're not right."


Bill Lipschutz:

"I don't have a problem letting my profits run, which many traders do. You have to be able to let your profits run. I don't think you can consistently be a winner trading if you're banking on being right more than 50 percent of the time. You have to figure out how to make money by being right only 20 to 30 percent of the time.

It's very difficult to be different from the rest of the crowd the majority of the time, which by definition is what you're doing if you're a successful trader.

So many people want the positive rewards of being a successful trader without being willing to go through the commitment and pain. And there's a lot of pain.

Avoid the temptation of wanting to be completely right."


William Eckhardt:

"One common adage on this subject that is completely wrongheaded is: You can’t go broke taking profits. That’s precisely how many traders do go broke. While amateurs go broke by taking large losses, professionals go broke by taking small profits. The problem in a nutshell is that human nature does not operate to maximize gain but rather to maximize the chance of a gain. The desire to maximize the number of winning trades (or minimize the number of losing trades) works against the trader. The success rate of trades is the least important performance statistic and may even be inversely related to performance. …

What really matters is the long-run distributions of outcomes from your trading techniques, systems, and procedures. But, psychologically, what seems of paramount importance is whether the positions that you have right now are going to work. Current positions seem to be crucial beyond any statistical justification. It’s quite tempting to bend your rules to make your current trades work, assuming that the favorability of your long-term statistics will take care of future profitability. Two of the cardinal sins of trading - giving losses too much rope and taking profits prematurely - are both attempts to make current positions more likely to succeed, to the severe detriment of long-term performance."


Brett Steenbarger:

"As a rule, maximizing batting average/minimizing drawdown comes at the cost of lowering overall system profitability."


Paul Tudor Jones:

“It’s a hell of a lot easier to get an information edge on one stock than it is on the S&P 500. When it comes to trading macro, you cannot rely solely on fundamentals; you have to be a tape reader, which is something of a lost art form. The inability to read a tape and spot trends is also why so many in the relative-value space who rely solely on fundamentals have been annihilated in the past decade. Markets have consistently experienced ‘100-year events’ every five years. While I spend a significant amount of my time on analytics and collecting fundamental information, at the end of the day, I am a slave to the tape and proud of it.

[I come] from that period of crazy volatility [in] the late ’70s and early ’80s, when the amount of fundamental information available on assets was so limited and the volatility so extreme that one had to be a technician … When I got into the business, there was so little information on fundamentals, and what little information one could get was largely imperfect. We learned just to go with the chart."

What I'd do is keep it a free for all.

Hire a hotel hall lol, give all applicants some good drinks on the house plus some short generic insights like those above, go on to put em all on a simulator they can trade remote from home in any way they see fit beyond drilling into them the absolute necessity of keeping losses small, give them one month to show what they can do, and then choose those for actual training and for the actual intake that generated the best risk / reward ratios.

This will show you real promise far more clearly than any interviews, and you won't preclude any real talent from one day becoming a real rainmaker fro your firm because of too exclusive candidate requirements that aren't correlated to trading success, and you're not going to waste endless time on meaningless bla-bla in individual interviews.

 

[richi rich]

yo cuzzi i got bare experriance n sh1t in trading so i think u shuid hire me straight away, like tomorow, me hired and big salary u get me. i clip the sp500 in 1000 or 500 lots u hear bruvs, ill make u so much muney that uwill have hoes all ova u like 100 mill in next 5 years bro then we can raise mo mounay for hedge funds

if u hire me i promise we'll get high togerther after we make the big dollars

ps i hope its gona be okay if i wake up at 10:30 am for work, cos im just a trader ennit, i come in and quickly do my shizzle then im out getin stoned and killing sum hoes....(maybe 11:am on somday

pps the esp500 is like my hoe she goes where i say, so dnt worry i got these markets on locks ye

call me bell me email me i realy need this job to pay off some outstanding plant fees so sought a bruva out ye

 

[N Rothschild]

the woman is turning clockwise how could anyone see that as anti clockwise?

 

[Technically Fundamental]

the woman is turning clockwise how could anyone see that as anti clockwise?

I SWEAR that was anti clockwise to me until I read your post.

Edit: Anti-clockwise now :-S I think this is some sort of scam GIF file

 

[richi rich]

big up all u clockwise see'ers, all the anit-clockwise see'ers are old fagots who trade euirobor spreads and drive clios