What is Pro-Pretariat Trading?
With this article we start a series of materials about stock tradingand also the specifics of traders' work in dealing centers.
Firm proponents (hereinafter referred to as "prop"), or investment companies invest personal funds in speculative trading on the stock exchange. Their goal is to make a profit, which is formed from closed and profitable transactions on the exchange, brought by personal traders of such an organization (the company's propetarians regularly look for experienced traders, providing them with the necessary resources: software, access to closed information, means of a by-pass account).
Is making money online realistic?
Many beginning traders dream about big earnings, looking for investors, offers from them, as well as minimization of risks when fulfilling obligations, on their part. At one time traders, found solutions on their own, many tried forexwhere conditions are inherently unequal and the fight against unscrupulous brokers forex companies. Some investors remember the enormous losses of funds, such as the 18 million $ of the Borispolz fund. There are many other less significant examples of market crashes. That is why traders and investors alike take quite a few risks.
How investment schemes work in the United States
Below is a simplified algorithm describing the basic concept of prop companies:
- the presence of prop-companies in the market, investing in stock trading and receiving income from trading on the stock exchange.
- all such companies conclude contracts with an experienced broker (trader) who has positive experience in trading on a real account for a year. Also relevant are dealing centers that provide a proprietary firm with all the necessary tools for trading on the exchange: order output, software, trading platform, clearing. How profitable is it for a proprietary firm? - It gets income from trading and commissions.
How profitable is it for a trader? - He works with the help of bypassers and disposes of large sums of money without using his own money. That is, the risk is minimized.
- the proprietary organization is reliably protected against the "drain" of trading capital - each group of traders is assigned a risk manager, who controls the trade and has the ability to close all the orders of all traders under his control. Moreover, participants must always set the limits of maximum losses for the day, month, etc.
- thus, the risk of proprietary companies is minimized: the trading floor is controlled by independent organizations, such as the Securities and Exchange Commission, and the proprietary company controls the trader directly, the growth of the company is due to their joint and successful work.
How do brokers at proprietary companies work?
Today, proprietary firms make more than half of the trades on Wall Street (50-70%). Brokers make a lot of money from commissions, monthly trades by traders of prop firms. This money goes to clearinghouses, intermediaries whose risks are minimized.
The history of property firms dates back to the late 90s, when the Internet boom was at its peak in the West. At that time there were several companies hiring successful graduates to trade on the stock exchange. At the moment, there are about 300 big proprietary firms.
Prop firms, compared to firms whose profitability is directly influenced by Wall Street, have no clients, that is, there is no fundamental dependence. They don't sell, they don't help sell. Also, prop firms do not raise outside funds (investments) and work only with the help of founders and traders.
Most prop companies do not train brokers (traders). You can leave your details for an interview on their websites. It is important to have experience in the form of an archive of profitable orders for at least a year. In this case there is a chance to work with the capital of a proprietary company.
Proprietary firms are developing in a fundamentally new market reality, searching for and recruiting traders from different countries, and, in rare cases, giving traders with a stable demo account the opportunity to work with newcomers. Sometimes training a beginner is much more effective than cooperating with a trader who already has his own trading system.
It is important to understand that every prop trader is a person with an individual mindset. There is no single and unique system for stable and successful trading. The trader makes his own decision on which assets and with what goals to enter the market. Only his experience and understanding of the market takes priority and brings results. Of course, there are common things such as the ability to follow the news (even terrorist attacks and natural disasters affect the growth/decline of indices, stocks and exchange funds), the ability to make quick decisions, basic knowledge of mathematics, politics, etc.
To learn more about Wealthy Traders proprietary company, which differs from many others by the fact that it provides training and leads its students to the result you can on the pages of the site wealthytraders.com/prop-trade. Any willing and hard working trader can get a demo account and become a part of such an organization today. Follow the link above, follow the instructions to get a trader's certificate and start trading in a proprietary company!