I'm slightly surprised that TopStepTrader hasn't yet been mentioned in this thread, because that's certainly worth a look, for a consistently profitable trader who can comply with their terms and conditions.
Their website will surely interest you.
And here's a thread in which their CEO answers anything and everything about qualifying for their funded accounts.
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Borrow: Generally people in your position enter some kind of trading arrangement with a prop group - mostly in Chicago near the CBOT building. Depending on the provisions, this often ends up being some tightly restricted form of 'borrow'.
Beg: This approach is usually rewarded by things at face value. Do you already have offering documents? What will I get in return for funding you? How did you learn how to trade? Who will handle your trade reconciliation? Where did you go to school? Who are your colleagues? I want to emphasize the last one and the first.
Beg: What are your colleagues?
The biggest vote of confidence for your trading strategy is if you can make your friends or friends-of-friends quit their promising jobs to join you on your trading. If you can't convince your own friends simply to work with you on this promising, (historically) consistently profitable business - it's really dubious why an outsider would have the confidence to give you money. The best way to beg for money is to give away some of it to the people who will work with you. For lifestyle reasons or simply out of stubbornness, many retail traders seem to reject this approach.
Beg: Do you have offering documents?
As for the first: My biggest allocations have come from very quick decisions. Guys flew over from London on very short notice to meet us. We had 1 day to put together the marketing materials. Next day we met again for breakfast. After that we had a phone call while they were in San Francisco. Deal closed. 1 month later the money was in our custodial bank.
The adage "strike while the metal is hot" applies especially to raising money. I've found that the longer it takes to raise your money, the further the probability of getting it in the bank decays.
Which brings me back to offering documents. Well, do you have any? I know very successful traders - they've earned $50M+ in performance bonuses cumulated over their lifetime - who can't raise money simply because they haven't set up any of the foundation to be receiving the money.
It's extremely time consuming to raise money, whether for a prop firm or a fund. For a fund - Before your offering documents are even completed, you will have done things that seem completely unrelated and take up months of your time - you need to drop by the police station to get your fingerprint cards; drop by the bank or UPS to get your passport notarized etc. All this is extremely bothersome even (especially?) if you have $50M of cash.
For a prop firm - you still need to structure your firm properly and selling equity in a LLC/LP can become moderately tricky. People are used to buying equity in tech startups, not trading startups, so you have an extra layer of challenge there. The better end-stage equity financing terms you can get for a prop firm come from PE giants like Silver Lake, Temasek etc. although you probably need to make multiple stages of financing to get there.
What I'm trying to drive at is that begging is not intellectually difficult, but it is time consuming. It's really just going to take you 3-6 months of your time to set up the bases and it's up to you to decide if it's worth the risk.
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By the way, I gave the anecdote of striking while the metal is hot because I was trying to explain that you need to have all your document packages ready to go and the answers to my questions on your fingertips.
Didn't explain this very well in the above post. Maybe because the hour is late.
If you are consistently profitable then just compound your profits and take out only what you need to live on (if your account size is relatively small), once you start earning a lot more you can loosen your grip but goal is to keep compounding. If you dont have much money for an account but you got skill, prop firms are a great option as they will fund you and absorb downside, they are paid through profit split. Topsteptrader is a good example. Go for legit firms, not the ones that require you to deposit money and just make money off your commissions (then they don't care about your progress as a trader).
Understanding yourself is just as important as understanding markets.
Last edited by TickedOff; June 17th, 2015 at 10:22 AM.
Imo, a good prop firm is the best way to go unless you have savings that you consider to be expendable. Doing the prop firm route means you are serious, takes dedication. So I think there are more challenges to grow that you are forced to respond to, whereas, trading for yourself, you might try to ignore those as long as you can.
Most prop firms require you to trade the way they want you to trade, not some methodology that you've come up that works for you.
Also, I decided earlier this year to regularly take out my trading profits, not compound, and it's been great. Ideally, yes, compounding is better but you tend to treat profits that you've earned but not cashed out more loosely like "easy come, easy go" because it hasn't had a material impact on your life yet and it's just a number in an account balance. This leads to treating your profits more loosely, prone to let it slip away from you. However, cashing it out provides cashflow which can be used for other personal or financial goals and have a tangible impact on your life.
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With your first point, generally speaking prop traders will develop their own style of trading after being able to successfully execute their firms strategies. Usually its built on the base the prop firm gives them. If you want to be an intraday, directional trader, and the firm focuses on doing that, if you are green to trading you will probably have an accelerated learning curve learning from them (i.e. learning strategies that work) rather than sifting through the plethora of information online, much of which is soley designed to take your money not deliver results. I think the way most traders develop their own style is they are introduced to various approaches and they take what works for them and discard what doesn't. If a prop firm insists on a particular methodology that their is their speciality (maybe systems trading or spread trading, maybe you just dont want to trade intraday), and you don't like it or it isnt a fit, then you are probably better off going on your own.
Understanding yourself is just as important as understanding markets.
Hi, Rahul Good Afternoon
I am sorry this is not relavent to this post. I am new to this forum But in other post I have read you been using Zunaa Strategy and looks like you are in Tampa Florida.(bay area) .
I am looking trading Buddy to trade Zunaa method. I have bought some zunna indicator
thank you very much