Does Prop Trading Always Involve Day Trading?
I always liked the idea of receiving performance based pay and prop trading allows for newly minted college graduate to rise through the ranks very quickly if they produce results. However, I've always considered myself more of an investor, than a trader and usually hold onto my stock picks for at least a year. Do any prop shops allow long-term investments, or is it strictly day trading? If someone beats the market, why should it matter how they do it?
Some shops are longer-term focused such as First New York Securities.
I still wouldn't call what they do (or any other prop firm) investing. OP, I'm not sure if there is anything that provides instant rewards/gratification of prop trading mixed with the "investing" theme you are looking for. You may just have to earn your stripes as a buyside research analyst and wait for better days. If you find it genuinely interesting, the wait won't be that bad.
My firm lets a few consistently profitable experienced traders hold overnight positions, though most newly hired traders/interns like myself have to start off trading intra-day equities and index futures with defined daily loss limit and other risk parameters.
So lets say they start you with 1mm in buying power and you put the money to work and the market pulls back 10% and your down 100k... at what point do you sell... telling you straight up if you started out prop trading and were down 100k you would quickly be out of a job.
Basically your trying to be a portfolio manager straight out of college... there is a reason it takes even the best people 5 years to get into a role where they are managing money.
I'll put on trades anywhere from intraday to months timeframe (of course also depends how quickly it goes your way or does not).
It depends on the firm's policy and your experience. Like above, my holding period varies depending on the situation. If there is a very short term opportunity, it will be a quick trade. On the other hand, if I have a real long term idea, I'll figure out profit/loss targets, size the position accordingly, and let it go. I think I was long gold for ~ 2 years.
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