Why Become A Prop Trader

basics prop trading Feb 15, 2021

First of all, I got great feedback on Grants email yesterday, so guess what Grant, you'll be writing some more stuff soon! He is however deep on building our database of Bear Volatile markets historically. 

Ok on to prop trading. 

First let me point you to a very extensive live stream I did on the subject about a month ago. I went DEEP. If you really want to dig in to why become a prop trader and have the time, check it out. https://www.youtube.com/watch?v=pKLF9WwBpTI

The first question I always get from people is, why would I prop trade, I can just trade my own account. This is what I'm going to focus on today. 

There are a couple of types of prop firms out there, ones that hire you for your background such as computer science, mathematics, physics, basically some very hard science/math skills that you can do very complex and innovative modeling that produce results. If you fall in to that category then it's just a negotiation with the firm of what your compensation package is going to be. 

The next is the type that you "try out" by trading by their rules. You basically pay them to paper trade in a period of time and obey all their risk parameters and rules, if you follow the rules 100% AND make money there is a bit of capital allocation awaiting you. 

I'm going to focus on the second method. 

This is the route I went, and full disclosure, I am now a mentor at a prop firm. So if you do end up at this firm, it's very likely that I will be your mentor going through the program. 

Back to the question of why would you go prop when you already have money to trade with.

The reason why I went this route for myself was, because they matched my capital. 

So if I put in 100k, they put in 100k

That means that my buying power is now doubled, and I do nothing new. 

The firm, in exchange charges me a seat fee, which is my data feeds, and support. I'm gonna pay for data anyway so that's already a sunken cost there, I just divert where my data comes from. 

As a new trader, you have a 70/30 profit split, so you get 70% and they get 30%

But as you spend time trading the firms capital they get to know you, they get to trust you and they can improve that from 70/30 to say 80/20, so you are getting 80% of the profits. 

Additionally they will continue to add more capital to your account as you perform consecutively. 

There is a very real possibility that you could be trading 300k, 500k account as you trade successfully, manage risk and they get more comfortable with you as a trader. 

So let's say you put in 100k and over the course of a couple years you make consistent profits, manage risk and you've taken a good income for yourself. You are now trading a 500k account and have 80/20 split. 

Let's say you have a 5% month, so you earn $25k that month

They take $5k and you keep $20k (minus the seat fee), you cam see how that 500k becomes 600k, 800k, $1million 

If you are going to be trading your own money anyway, why not juice your returns without having to increase your personal risk per trade? To me prop is just the best way to make it as an at home trader. 

Check the link here to see if this is something that might work for you.
For Forex 

For Options

That's it for today.

Oh one more thing, weekly FVBO long on BTC is looking good 



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