Except the leverage, what else prop firms can offer to traders? I heard that most of them offer little training and require you to pay deposit. Many of them also require you to pay hefty desk fees. If I open an a/c with IB or other brokers, I can do the same thing. And it is a lot cheaper. The collapses of some prop firms also scared me.
I don't work for a prop firm, I trade at home but they will offer lower commissions. This assumes you meet the minimum for the of shares traded.
The purpose of the prop firm is so that the owners can make money, such as by charging wanna-be traders training fees, desk fees, and commissions. Traders join prop firms because they can't achieve profitability on their own. They hope the training from the prop firm will actually teach them something useful. You're right. You don't need a prop firm. Just open an account with IB.
I agree for the most part for a lot of trading stratigies you do not need prop you could just work in a IB account. However for strategies where you turn high volume (for instance I trade more then 1,000,000 shares a day) I need their selection of ECN and their low rates (anywhere from .10-.20 per 1000). For my it makes sense to give up some of my orfit to get these rates, where other trade is does not make sense. It really is a simple concept you just need to figure out what is the best deal for you.
The OP said "other than leverage" - well "leverage" or "capital usage" as I prefer (more applicable)...is a big part. If the average retail guy is making $25K with a $25K account with good strategies and discipline, perhaps by "using" $300K he can make multiples of that $25K. On the other end, I have suggested to several of my highly successful traders to take out a couple of $million and place at IB, keep $50k or so here for certain strategies. And, we work really hard with our traders - mentoring programs, JVC plan, 100% interation on a daily basis (every trader is connected every second of the day with their manager/mentor/team) is of great value...and my people agree. Heck, I have about 400 on my yahoo messenger. And our Retreats**, Intensive workshops**, etc. are very well received and extremely valuable. But, our Firm is not for everyone - I totally understand.... All the best, Don ** Our latest technology, Industry changes, auto programs, strategies, my friend Ben Lichtenstein (Traders Audio, CNBC etc.) always flies out to join us and share his views from where he is. My brother and his global discussions are really helpful - and teaching "common sense" which sometimes needs to be reiterated, LOL.
If I were going to go Prop, Don would be the Man! I've spoken with him on the phone in the past, and I believe he walks his talk. Him and Maverick both seem like good people with good outfits. The possibility of going prop is the ONLY reason I keep my Series 7 I assure you. Finra (Fine-ya) is a miserable mess to deal with. I'll knock on wood since I haven't had any dealings with them. Some of the guys I've worked with in the past have had the "pleasure" of dealing with fine-ra, and they said they wished they had become farmers instead of Brokers...
I've traded on a prop floor for more than 3 years. Honestly I didn't learned anything from their training. Motivation from peers and seniors, as well as having some great friends to exchange trading talks worked well for me. I'd say it's really worth to trade on a floor/office with 40+ traders, it kindof humbles and matures you.
I totally agree with this - our groups motivate and yes, commiserate well together - and it helps. Don