Proprietary Trading
Discussion
@ flipflop.. sorry to hear about your son, i do hope its nothing serious. I envy you being able to spend time with your kids, that's one thing money can't buy.
Always been interested in abit of trading myself, currently my day job is sat in front of a computer which could be used to do abit of trading.
Could any of you kind gent's point me in the right direction .. ie what site to use for trading etc?
Always been interested in abit of trading myself, currently my day job is sat in front of a computer which could be used to do abit of trading.
Could any of you kind gent's point me in the right direction .. ie what site to use for trading etc?
layercake said:
@ flipflop.. sorry to hear about your son, i do hope its nothing serious. I envy you being able to spend time with your kids, that's one thing money can't buy.
Always been interested in abit of trading myself, currently my day job is sat in front of a computer which could be used to do abit of trading.
Could any of you kind gent's point me in the right direction .. ie what site to use for trading etc?
Sorry, never saw your reply Layercake (awesome movie btw). Always been interested in abit of trading myself, currently my day job is sat in front of a computer which could be used to do abit of trading.
Could any of you kind gent's point me in the right direction .. ie what site to use for trading etc?
There are a myriad of places to trade but for me a great place to start is deciding what you want to trade and how. Currencies? Futures? Indexes? Commodities etc.
Best of luck. I am going full time at the end of this year after 7 years of trading.
I doubt I would have started had I known how hard the journey would be where I am now.
This webinar by someone who is quite active socially is worth a watch: https://www.youtube.com/watch?v=NDkE6RHke9U
I doubt I would have started had I known how hard the journey would be where I am now.
layercake said:
Always been interested in abit of trading myself, currently my day job is sat in front of a computer which could be used to do abit of trading.
Could any of you kind gent's point me in the right direction .. ie what site to use for trading etc?
I'd make sure off the bat that your expectations are realistic as to just how hard it is. Could any of you kind gent's point me in the right direction .. ie what site to use for trading etc?
This webinar by someone who is quite active socially is worth a watch: https://www.youtube.com/watch?v=NDkE6RHke9U
It's been a solid month so far, the fx markets are pretty steady at the moment with not huge amounts of a volatility despite plenty of ongoing fundamental factors. I've been trying out a new platform the last few weeks and it's amazing how long it takes to relearn stuff which you take for granted.
It'll be interesting to see if the volatility picks up in the next few weeks.
It'll be interesting to see if the volatility picks up in the next few weeks.
La Liga said:
'd make sure off the bat that your expectations are realistic as to just how hard it is.
This webinar by someone who is quite active socially is worth a watch: https://www.youtube.com/watch?v=NDkE6RHke9U
What do you trade La Liga? What would you change if you could?This webinar by someone who is quite active socially is worth a watch: https://www.youtube.com/watch?v=NDkE6RHke9U
One thing that is on my mind lately is finding a long term broker.
As my equity grows my trust in my broker has to be 100%. It seems all ASIC brokers aren't as safe as most people believe when the real trouble hits. Whilst client funds are segregated from the brokers account, it seems all clients funds are pooled together. They state that if a client goes beyond their margin they can and will use other clients funds to cover that loss. So I could be doing absolutely nothing and my funds could disappear to cover someone else's loss. That really doesn't sit well with me.
I've thought of only having 50% of available funds actually in my account and simply using the required leverage to trade as if the whole amount was there.
Does anyone have any strong recommendations? I don't trade huge volume, on average anywhere from 1 mio to 2 mio a day at present.
As my equity grows my trust in my broker has to be 100%. It seems all ASIC brokers aren't as safe as most people believe when the real trouble hits. Whilst client funds are segregated from the brokers account, it seems all clients funds are pooled together. They state that if a client goes beyond their margin they can and will use other clients funds to cover that loss. So I could be doing absolutely nothing and my funds could disappear to cover someone else's loss. That really doesn't sit well with me.
I've thought of only having 50% of available funds actually in my account and simply using the required leverage to trade as if the whole amount was there.
Does anyone have any strong recommendations? I don't trade huge volume, on average anywhere from 1 mio to 2 mio a day at present.
All OTC brokers operate in this pooled client account way. It's a non issue in the UK for clients with less than £50k due to FSCS protections but beyond that clients are at risk.
I offer a workaround of a Lloyds of London underwritten insurance policy to my larger clients, as do others but most large clients will look for balance sheets that are too large to fail such as MF Global (which failed) or IG.
The risk really comes into play where a broker has a series of huge clients that it pools with the normal ones as there is very little risk of a book of normal clients simultaneously defaulting but with the big clients it isn't just a high risk but in my book a certainty that one will default. And if their default is large enough then it wipes out all other client funds in the same pool.
The exact same risk is there for small brokers who run omnibus at larger clearers. It sounds safer to be exposed to the balance sheet risk of a big broker but that isn't where the default risk lies. It lies with your fellow clients. This is what happened to Echelon clients who thought they had the security of IG's balance sheet.
If you look at the most recent broker default episode around the depegging of EURCHF the average retail broker should not have given two craps about that event. Retail traders simply don't do carry trades in the first instance and secondly, there is no money in it for a retail broker as it is long term e posture that has to be A booked not B booked. And yet we saw some mid level retail FX houses go bust. This was because they had been busy playing 'Billy Big b
ks' and bringing onboard bottoms end institutional flow by under cutting the prime brokers on both rates and margins. So they had a whole book of toxic clients who by their nature were bad traders but with access to institutional funds all priced up wrong with one or more guaranteed to fail. Or, as happened with some of the pure B book bookmakers, the broker suddenly claims to have been hedging all their business so wire all their clients' funds to an offshore third party and go partying while also conveniently avoiding the impending AML investigation that was going to see your license removed.
Looking at ASIC, I wouldn't put a £1 of my money into most ASIC B book firms. There are as many bent and incompetent operators down there as there are in Cyprus and the regulator has decades of experience at letting scams run along with terrible risk management at the firms it is supposed to govern.
As a pro trader you should already have secondary accounts at other firms live and funded and you shouldn't be keeping any cash that isn't needed for initial or variation margin at a brokers so it does tend to boil down to how large your trading pool requirement is and how best to protect that in the reality that any broker can go tits up via a client default.
I offer a workaround of a Lloyds of London underwritten insurance policy to my larger clients, as do others but most large clients will look for balance sheets that are too large to fail such as MF Global (which failed) or IG.
The risk really comes into play where a broker has a series of huge clients that it pools with the normal ones as there is very little risk of a book of normal clients simultaneously defaulting but with the big clients it isn't just a high risk but in my book a certainty that one will default. And if their default is large enough then it wipes out all other client funds in the same pool.
The exact same risk is there for small brokers who run omnibus at larger clearers. It sounds safer to be exposed to the balance sheet risk of a big broker but that isn't where the default risk lies. It lies with your fellow clients. This is what happened to Echelon clients who thought they had the security of IG's balance sheet.
If you look at the most recent broker default episode around the depegging of EURCHF the average retail broker should not have given two craps about that event. Retail traders simply don't do carry trades in the first instance and secondly, there is no money in it for a retail broker as it is long term e posture that has to be A booked not B booked. And yet we saw some mid level retail FX houses go bust. This was because they had been busy playing 'Billy Big b
ks' and bringing onboard bottoms end institutional flow by under cutting the prime brokers on both rates and margins. So they had a whole book of toxic clients who by their nature were bad traders but with access to institutional funds all priced up wrong with one or more guaranteed to fail. Or, as happened with some of the pure B book bookmakers, the broker suddenly claims to have been hedging all their business so wire all their clients' funds to an offshore third party and go partying while also conveniently avoiding the impending AML investigation that was going to see your license removed. Looking at ASIC, I wouldn't put a £1 of my money into most ASIC B book firms. There are as many bent and incompetent operators down there as there are in Cyprus and the regulator has decades of experience at letting scams run along with terrible risk management at the firms it is supposed to govern.
As a pro trader you should already have secondary accounts at other firms live and funded and you shouldn't be keeping any cash that isn't needed for initial or variation margin at a brokers so it does tend to boil down to how large your trading pool requirement is and how best to protect that in the reality that any broker can go tits up via a client default.
DonkeyApple said:
All OTC brokers operate in this pooled client account way. It's a non issue in the UK for clients with less than £50k due to FSCS protections but beyond that clients are at risk.
I offer a workaround of a Lloyds of London underwritten insurance policy to my larger clients, as do others but most large clients will look for balance sheets that are too large to fail such as MF Global (which failed) or IG.
The risk really comes into play where a broker has a series of huge clients that it pools with the normal ones as there is very little risk of a book of normal clients simultaneously defaulting but with the big clients it isn't just a high risk but in my book a certainty that one will default. And if their default is large enough then it wipes out all other client funds in the same pool.
The exact same risk is there for small brokers who run omnibus at larger clearers. It sounds safer to be exposed to the balance sheet risk of a big broker but that isn't where the default risk lies. It lies with your fellow clients. This is what happened to Echelon clients who thought they had the security of IG's balance sheet.
If you look at the most recent broker default episode around the depegging of EURCHF the average retail broker should not have given two craps about that event. Retail traders simply don't do carry trades in the first instance and secondly, there is no money in it for a retail broker as it is long term e posture that has to be A booked not B booked. And yet we saw some mid level retail FX houses go bust. This was because they had been busy playing 'Billy Big bks' and bringing onboard bottoms end institutional flow by under cutting the prime brokers on both rates and margins. So they had a whole book of toxic clients who by their nature were bad traders but with access to institutional funds all priced up wrong with one or more guaranteed to fail. Or, as happened with some of the pure B book bookmakers, the broker suddenly claims to have been hedging all their business so wire all their clients' funds to an offshore third party and go partying while also conveniently avoiding the impending AML investigation that was going to see your license removed.
Looking at ASIC, I wouldn't put a £1 of my money into most ASIC B book firms. There are as many bent and incompetent operators down there as there are in Cyprus and the regulator has decades of experience at letting scams run along with terrible risk management at the firms it is supposed to govern.
As a pro trader you should already have secondary accounts at other firms live and funded and you shouldn't be keeping any cash that isn't needed for initial or variation margin at a brokers so it does tend to boil down to how large your trading pool requirement is and how best to protect that in the reality that any broker can go tits up via a client default.
As always a good insightful post, many thanks.I offer a workaround of a Lloyds of London underwritten insurance policy to my larger clients, as do others but most large clients will look for balance sheets that are too large to fail such as MF Global (which failed) or IG.
The risk really comes into play where a broker has a series of huge clients that it pools with the normal ones as there is very little risk of a book of normal clients simultaneously defaulting but with the big clients it isn't just a high risk but in my book a certainty that one will default. And if their default is large enough then it wipes out all other client funds in the same pool.
The exact same risk is there for small brokers who run omnibus at larger clearers. It sounds safer to be exposed to the balance sheet risk of a big broker but that isn't where the default risk lies. It lies with your fellow clients. This is what happened to Echelon clients who thought they had the security of IG's balance sheet.
If you look at the most recent broker default episode around the depegging of EURCHF the average retail broker should not have given two craps about that event. Retail traders simply don't do carry trades in the first instance and secondly, there is no money in it for a retail broker as it is long term e posture that has to be A booked not B booked. And yet we saw some mid level retail FX houses go bust. This was because they had been busy playing 'Billy Big b
ks' and bringing onboard bottoms end institutional flow by under cutting the prime brokers on both rates and margins. So they had a whole book of toxic clients who by their nature were bad traders but with access to institutional funds all priced up wrong with one or more guaranteed to fail. Or, as happened with some of the pure B book bookmakers, the broker suddenly claims to have been hedging all their business so wire all their clients' funds to an offshore third party and go partying while also conveniently avoiding the impending AML investigation that was going to see your license removed. Looking at ASIC, I wouldn't put a £1 of my money into most ASIC B book firms. There are as many bent and incompetent operators down there as there are in Cyprus and the regulator has decades of experience at letting scams run along with terrible risk management at the firms it is supposed to govern.
As a pro trader you should already have secondary accounts at other firms live and funded and you shouldn't be keeping any cash that isn't needed for initial or variation margin at a brokers so it does tend to boil down to how large your trading pool requirement is and how best to protect that in the reality that any broker can go tits up via a client default.
Yes, the depegging of EURCHF was a complete shocker, these sorts of events are what worry me.
I appreciate the thoughts on capital and I'm in the process of withdrawing capital that isn't required above and beyond margin requirements.
Do you have any thoughts on LMAX?
Very small despite levels of flow as pure A book. No longer has a parent to bail it out but is a good broker. It's main risk is client default risk but what I don't know is whether clients have individual cash accounts or held pooled. There was talk of individual accounts back when it was part of Betfair but I've no knowledge as to whether this happened.
Best, Crude, way to gauge a broker is by its margin rates. The more leverage it offers the crapper and dodgier it is as they will be chasing flow regardless of risk so be the firms that fail to survive a sharp turn.
Best, Crude, way to gauge a broker is by its margin rates. The more leverage it offers the crapper and dodgier it is as they will be chasing flow regardless of risk so be the firms that fail to survive a sharp turn.
Very small despite levels of flow as pure A book. No longer has a parent to bail it out but is a good broker. It's main risk is client default risk but what I don't know is whether clients have individual cash accounts or held pooled. There was talk of individual accounts back when it was part of Betfair but I've no knowledge as to whether this happened.
Best, Crude, way to gauge a broker is by its margin rates. The more leverage it offers the crapper and dodgier it is as they will be chasing flow regardless of risk so be the firms that fail to survive a sharp turn.
Best, Crude, way to gauge a broker is by its margin rates. The more leverage it offers the crapper and dodgier it is as they will be chasing flow regardless of risk so be the firms that fail to survive a sharp turn.
I trade for a living and most of what I have seen on here sounds more like gambling and will not provide a secure career
If you want to make a career out of trading you should become a portfolio manager at a hedge fund which has some investment strategy that gives you an edge
If you don't know how to get such an edge you need to work work someone who does first. If you think edge means some latest trend following algo or stock picker software then you need to go and work at a proper hedge fund
I would suggest first trying to be an analyst on salary at a hf to understand finace
If you want to make a career out of trading you should become a portfolio manager at a hedge fund which has some investment strategy that gives you an edge
If you don't know how to get such an edge you need to work work someone who does first. If you think edge means some latest trend following algo or stock picker software then you need to go and work at a proper hedge fund
I would suggest first trying to be an analyst on salary at a hf to understand finace
dvshannow said:
I trade for a living and most of what I have seen on here sounds more like gambling and will not provide a secure career
If you want to make a career out of trading you should become a portfolio manager at a hedge fund which has some investment strategy that gives you an edge
If you don't know how to get such an edge you need to work work someone who does first. If you think edge means some latest trend following algo or stock picker software then you need to go and work at a proper hedge fund
I would suggest first trying to be an analyst on salary at a hf to understand finace
Not one aspect of my trading is gambling, but thanks for the info. I also do not trade stocks or use any 'software'.If you want to make a career out of trading you should become a portfolio manager at a hedge fund which has some investment strategy that gives you an edge
If you don't know how to get such an edge you need to work work someone who does first. If you think edge means some latest trend following algo or stock picker software then you need to go and work at a proper hedge fund
I would suggest first trying to be an analyst on salary at a hf to understand finace
I'm more than happy carving my own path like I am.
Edited by anonymous-user on Monday 5th June 06:32
dvshannow said:
I trade for a living and most of what I have seen on here sounds more like gambling and will not provide a secure career
If you want to make a career out of trading you should become a portfolio manager at a hedge fund which has some investment strategy that gives you an edge
If you don't know how to get such an edge you need to work work someone who does first. If you think edge means some latest trend following algo or stock picker software then you need to go and work at a proper hedge fund
I would suggest first trying to be an analyst on salary at a hf to understand finace
Sorry this shows a total misunderstanding of all of the branches of finance and completely missed the point of this thread.If you want to make a career out of trading you should become a portfolio manager at a hedge fund which has some investment strategy that gives you an edge
If you don't know how to get such an edge you need to work work someone who does first. If you think edge means some latest trend following algo or stock picker software then you need to go and work at a proper hedge fund
I would suggest first trying to be an analyst on salary at a hf to understand finace
If you think that being a portfolio manager is the only way to gain an edge you need to learn a little more. I would even argue that a portfolio manager isn't even a trader, you're just a money mover within set parameters. Trading proper is finding any way to gain alpha from any form, be that prop or market making or high frequency algorithmic.
FYI - I run a successful prop trading group for a hedge fund and have done for the last 14 years. And I couldn't manage a stock portfolio for toffee.
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