Exploiting the edge from historical market patterns
Thursday, October 08, 2009
More Advice Regarding Prop Trading Scams
They seem to be coming out of the woodwork: So-called proprietary (prop) trading firms that charge steep fees for training/education and then allocate X thousands of dollars in "buying power" to traders who pay commissions and other fees. The amount of capital actually allocated is a small percentage of the buying power, and it is a modest percentage of the tuition charged for training. Once commissions and fees (and/or losses) eat up the small capital base, the trader's prop career is finished and the prop firm (which never intended to make money from the traders' trading) pockets the fees.
Use due diligence and common sense when such firms show a ready willingness to make you "an offer." Whatever this model is, it is *not* proprietary trading as practiced by respected firms. If a firm offers solid education for a fee, that may be a wise investment. But don't let (thin) promises of prop trading talk you into tuition payments you wouldn't be making otherwise.
Author of The Psychology of Trading (Wiley, 2003), Enhancing Trader Performance (Wiley, 2006), The Daily Trading Coach (Wiley, 2009), Trading Psychology 2.0 (Wiley, 2015), The Art and Science of Brief Psychotherapies (APPI, 2018) and Radical Renewal (2019) with an interest in using historical patterns in markets to find a trading edge. Currently writing a book on performance psychology and spirituality. As a performance coach for portfolio managers and traders at financial organizations, I am also interested in performance enhancement among traders, drawing upon research from expert performers in various fields. I took a leave from blogging starting May, 2010 due to my role at a global macro hedge fund. Blogging resumed in February, 2014.
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