So You Want To Join A Prop Firm?
Joining a prop firm can be a good way to fast-track your career in the finance industry.
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We have a question here from John who asks whether we would advise any retail traders to join a prop firm. Thanks for the question.
And JP, the first thing I'll say about the answer to this question is that I'm definitely not an expert by any means when it comes to prop firms. And so I can share some thoughts on it. But I won't pretend to know all the ins and outs when it comes to prop firms if that makes sense.
So the finance industry the one thing that I can tell is that it can be a little bit of a doggy dog world. And when you look at things like big investment banks and hedge funds, the criteria for entering them are usually extremely difficult and strict. And some of the minimum requirements to pass even just being considered into these funds are usually extremely high.
There was a business article, Business Insider article a while ago explaining that only about five percent of people who apply to join investment banks or hedge funds, are even considered for possible positions. So you know, with that in mind, the other option that retail traders often gravitate towards even those that want to join the finance game just out of college is taking a shot at the industry from inside by joining a prop firm.
Now, usually prop firms would be made up of traders who file their funds together trying to raise capital. And because they are usually set up by people who break away from the industry, so breaking away from investment banks or larger firms they're often a lot smaller in size and will probably be less strict and to some extent to allow someone to join the firm. Now, what some of them also do is they can actually charge people a fee to join a desk, so you can pay them to join the desk. And so you can basically gain some valuable experience.
Some of them also offered training programs within the firm. And if you are a standout individual from the training program, you can actually stand a chance to join the firm and trade for them. So yeah, the ones to keep in mind about that is if it's a good firm, they will usually also have a pretty strict policy for allowing people a seat at a desk. And because they obviously don't just want to allow anybody, so the process can also be picky, but it will definitely not be as strict in terms of investment banks or hedge funds.
Now, one thing also to keep in mind is the competition out there is very, very tough. So when you apply, you're probably going to go up against, you know, applicants that have major degrees in economics and finance, probably a few master's degrees, and candidates as well fresh out of college looking to join the finance game.
So what you could do, you know, to try and stand out to show them your character, show them your competency is also giving them your trading track record. So if you can build a solid trading track record, you know, over you know, longer than six months at least, you know, between a year and two years, maybe showing that you have a low draw down and decent results. And if you can show them that you can trade your own capital successfully over a longer period of time, that will definitely set you apart and give you a massive help to try and get noticed. And then into the door for that those types of firms.
So to your question, you know, whether I would advise you joining a prop firm, it really comes down to your goals. And really, if you have, the funds to buy a spot at a desk, and at a reputable firm and have the time and availability to go through their training process and go through their trading process, I think that'll be a very helpful and enriching experience for any trader. And if you're good enough, you know, it might even give you a spot in the firm as an analyst or trader.
However, the one thing that I would add to that is that you don't need to do that. And to be a better trader, right?
It might fast track your progress and it might also fast track giving you a fast track to a career in finance, if that is your goals. But it's not a must to be able to trade successfully, I would say.
So I hope that helps JP any other questions, don't hesitate to let us know.
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If you find this content helpful, you’ll love Forex Source.
There’s a link below were you can learn more about it
https://bit.ly/2HFykNd
----
We interpret and explain price moves in real-time, 24 hours a day. Our team of analysts produce text, video and audio commentary.
You understand the markets and trade with confidence. Learn more at our website here: https://bit.ly/2HFykNd
-----
We have a question here from John who asks whether we would advise any retail traders to join a prop firm. Thanks for the question.
And JP, the first thing I'll say about the answer to this question is that I'm definitely not an expert by any means when it comes to prop firms. And so I can share some thoughts on it. But I won't pretend to know all the ins and outs when it comes to prop firms if that makes sense.
So the finance industry the one thing that I can tell is that it can be a little bit of a doggy dog world. And when you look at things like big investment banks and hedge funds, the criteria for entering them are usually extremely difficult and strict. And some of the minimum requirements to pass even just being considered into these funds are usually extremely high.
There was a business article, Business Insider article a while ago explaining that only about five percent of people who apply to join investment banks or hedge funds, are even considered for possible positions. So you know, with that in mind, the other option that retail traders often gravitate towards even those that want to join the finance game just out of college is taking a shot at the industry from inside by joining a prop firm.
Now, usually prop firms would be made up of traders who file their funds together trying to raise capital. And because they are usually set up by people who break away from the industry, so breaking away from investment banks or larger firms they're often a lot smaller in size and will probably be less strict and to some extent to allow someone to join the firm. Now, what some of them also do is they can actually charge people a fee to join a desk, so you can pay them to join the desk. And so you can basically gain some valuable experience.
Some of them also offered training programs within the firm. And if you are a standout individual from the training program, you can actually stand a chance to join the firm and trade for them. So yeah, the ones to keep in mind about that is if it's a good firm, they will usually also have a pretty strict policy for allowing people a seat at a desk. And because they obviously don't just want to allow anybody, so the process can also be picky, but it will definitely not be as strict in terms of investment banks or hedge funds.
Now, one thing also to keep in mind is the competition out there is very, very tough. So when you apply, you're probably going to go up against, you know, applicants that have major degrees in economics and finance, probably a few master's degrees, and candidates as well fresh out of college looking to join the finance game.
So what you could do, you know, to try and stand out to show them your character, show them your competency is also giving them your trading track record. So if you can build a solid trading track record, you know, over you know, longer than six months at least, you know, between a year and two years, maybe showing that you have a low draw down and decent results. And if you can show them that you can trade your own capital successfully over a longer period of time, that will definitely set you apart and give you a massive help to try and get noticed. And then into the door for that those types of firms.
So to your question, you know, whether I would advise you joining a prop firm, it really comes down to your goals. And really, if you have, the funds to buy a spot at a desk, and at a reputable firm and have the time and availability to go through their training process and go through their trading process, I think that'll be a very helpful and enriching experience for any trader. And if you're good enough, you know, it might even give you a spot in the firm as an analyst or trader.
However, the one thing that I would add to that is that you don't need to do that. And to be a better trader, right?
It might fast track your progress and it might also fast track giving you a fast track to a career in finance, if that is your goals. But it's not a must to be able to trade successfully, I would say.
So I hope that helps JP any other questions, don't hesitate to let us know.
-----
If you find this content helpful, you’ll love Forex Source.
There’s a link below were you can learn more about it
https://bit.ly/2HFykNd
