Magazine

Build Your Career As a Proprietary Trader

April 5, 2019 | 6:38 am | The 5%ers' Blog > Magazine
April 5, 2019 | 6:38 am
The 5%ers' Blog > Magazine
building a trading career

Why trading for a proprietary trading fund is the natural progression for your career

Somewhere in the mid-70s to early 80s, a new type of trading emerged. During this period, many individual traders couldn’t get enough funding or liquidity in order to trade high volumes on their own.

In response to the demand of traders, US companies began renting some of their floor space to skillful traders, effectively making them part of the trading division within the firm.

The arrangement was a resounding success. The traders would invest a portion of the trading portfolio and the fund would give the trader more and more capital as long as the trader continued to show potential and skill.

Minimize Individual Risk

In this arrangement, the prop trader would then be sharing the trading risk with the fund. In return, the trader would get more and more leverage than they could get for themselves if they were trading independently. Traders were also finally able to get orders in a low pricing – something else that would have been impossible as solo traders.

New Models for New Times

In modern times, ever since the internet took control of the markets, prop trading funds and firms have seen their models change dramatically.

Looking back to the first setups, there is virtually no remnants of the original mode. The name is now just a generic description of funds that have an agreement with third party traders to come in and trade as a service provider. Prop trading no longer describes any specific trading model.

No More Physical Space

In the days before the internet took over, prop traders had to rent their seats on the trading floor which might explain why some of today’s online funds ask for subscriptions from their traders.

At The5ers, we don’t think this antiquated should model should exist. There’s no physical space that traders are occupying that would warrant paying dues towards. Why would you pay for a seat that doesn’t really exist?

The only reason we can come up with to pay a subscription is for traders to show that they are serious. If they’re willing to pay a subscription, it tells us that they are for real and confident in their abilities.

This is the only condition in which we think it’s fair for a prop trader to pay a subscription.

A Shifting Trading Landscape

Since the environment has shifted to a virtual, cyber world, and there are no physical spots to rent, traders need to work with a company that understands these seismic shifts.

The5%ers are one of the few companies to fully understand the changing landscape of the industry.

A One time Fee

The declaration for a confident trader has moved from paying a monthly sub to buying a one time fee in order to cover testing costs.

At the5%ers, this test is to show that your trading is confident and your performance is positive. This proves to the proprietary fund that you’re eligible to receive and trade their money. Maybe there is a remnant of the original system after all. This is the same old fashioned model where the fund provides the funds and the trader provides the trading labors.

When a trader has a good trading performance with a positive outcome over time, the only natural thing is for the trader to look for ways to trade bigger capital to create more gains for themselves.

A More Convenient Way to Trade

As we mentioned before, in the new era of proprietary trading, where you can trade from your own office, wherever you want, there is no fighting over one or two physical seats available with a firm or an office.

Being a prop trader also eliminates the need to look for a job and prove yourself every day.

It also eliminates the need for scouting for willing investors to invest in your talents. You don’t need to beg and painfully show your legitimacy to earn their money.

It’s All on the Table

In the proprietary fund, you get a predefined program that clearly defines what success and failure look like. Everything that is expected from you, as well as your growth potential according to performance is laid out. There are no secrets or hidden rules or limitations.

Everything will be explained and defined way before you enter the program.

Proprietary trading funds in today’s online world are providing huge opportunities for traders all over the world and at all levels of skill. From intermediate to a high level, these funds allow traders access to more capital which leads to a bigger growth horizon for the present and future market successes.

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