Prop firms

[colin]

Does anyone have experience of trading with a prop firm?

I'm especially interested if you were a proprietary trader with them and traded the firm's capital.

What firms are recommended?

What questions need to be asked when first approaching a prop firm?

Any gotchas that you need to watch out for?

Thanks.

[toptick07]

Hey, Colin. By "prop firm", do you mean an LLC or LLP that allows individuals to trade it's capital? Like NYSE or NASDAQ stocks?

[colin]

Yup, but a firm that allows for forex trading using the firm's capital. The only ones I've really come across so far are GlobalFX, FXCM and BNBC.

GlobalFX seems to have very mixed reviews as to whether they're a decent outfit or not.

FXCM only really consider you if you've been using them as a broker all along.

I contacted BNBC to find out more information about their program but have yet to get a response.

The other option I'm looking into is getting hired as a trader for a managed fund. One company that I've found that are currently recuiting are FX Chicago/Chicago Global Investors.

[toptick07]

I have no experience trading with a forex prop shop. I have been in an operations capacity for a major Wall Street firm that handles clearing for several equity prop firms. The term "bucket shop" comes to mind.

On the equity side there a few decent players. If you have questions about equity firms go here: Elite Trader - The #1 Site for Active Traders (Don Bright is an experienced vet from the Philly exchange. He may be able to direct you.)

Also, this is not an advert for the above site or a plug for any individual mentioned. We must all do our own research and due diligence homework. Hope this is helpful.

[milkcake]

I found Forexsigns.com. They are pretty specific about their requirement. Is it better/worse than what FXCM gives?

[colin]

FXCM are very vague and don't say what their requirements are at all. See for yourself here:
PropFX Traders for Hire, PropFX Backs Profitable Traders, PropFX Traders

If you only have a small amount of trading capital there isn't too much advantage to the forexsigns deal. They only match up to 70% of your capital, so you really need a couple of hundred thousand to really make it worthwhile.

[milkcake]

I see. Well forexsigns initially match 70% and then 30% to make it 100%. I guess it's okay if you want to double the amount you want to trade without taking risk, because they do say the loss is split 50/50. I hate things being vague like FXCM, never know whether you are getting scammed.