Wednesday, March 05, 2014

A Different Kind of Proprietary Trading Group

I want to thank the readers who responded to the posts on what you need for trading success and finding the right mentorship.  I will be responding to these comments and suggestions in coming posts.

One of my long-term projects is to form a different kind of proprietary trading group.  In the usual prop format, traders trade the capital of the owner(s) and share in profits.  The traditional prop model can be very promising or very disadvantageous, depending on how the deal between owners and traders is structured

A different kind of proprietary trading group is one in which the capital that is traded is intellectual capital.  Everyone keeps their accounts, everyone keeps their profits--there is no employment relationship whatsoever.  The price for getting in the door is sharing ideas and research:  everyone contributes to an idea pool and everyone benefits from the insights and discussion generated.  Everyone shares their trading results and everyone mentors everyone else.  

Imagine a virtual trading room connecting six hungry, dedicated, creative, savvy traders.  With the right people, participants would experience an accelerated learning curve.  Coaching, mentorship, and idea generation would be seamlessly integrated.  Everyone would be a mentor, everyone would be mentored.

It's not an idea for beginners, but would make sense for experienced, talented individual traders that wanted the advantages of belonging to a group without the usual strings attached.

There is a saying in medical education:  "Each one teach one."  Advanced medical students teach beginners; interns teach advanced medical students; residents teach interns; attending physicians teach residents.  The key is always seeing yourself as teacher and student.

Trading intellectual capital:  the idea is ridiculously idealistic and that's why I love it.

Further Reading:  Fighting the Isolation of Trading