PnL% of Prop Traders?
Does anyone have any insight into the range for the PnL of prop traders? Such as the minimum before you get sacked, the average (likely) PnL, and what a stellar PnL looks like.
Or even if someone knows what sort of returns prop shops would salivate over should I cheekily attach my trade history with my resume.
It really depends on how you frame your Trade History. If your philosophy/holding period/risk tolerances/style are in line with those of the company with which you are interviewing, yes.
Most Prop shops are averse to taking big positions offside, and will encourage you to take a high volume/low risk scalping strategy initially. So, if you are trading longer term macro strategies, be prepared to explain the drawdowns.
Firms that offer guaranteed fixed % of pnl you should stay away from. They are not there for the long run. If you still want that you can probably just join a trading arcade and take 100% of PNL after the higher costs.
it depends on the strategy...if you are just punting on market direction (even if you have a great decision making process) its very hard to get prop shops (or anybody) to take you seriosuly. Not saying its impossible...just difficult.
If your strategy falls into HFT space, then there will be alot of interested parties. Essentially...the higher the frequency, the higher the interest you will generally find.
This is for a couple reasons (just off the top of my head) 1 - HFT = high transaction costs...and this is a valid reason to want to join a larger firm (to minimize transaction costs) 2) - never taking positions home overnight means less capital intensive (which is another desirable trait of prop trading firms) 3 - high frequency = larger sample size to determine if your strategy is viable long term with statistics, vs if you just got lucky a few times
Lower frequency strategies = lower transaction costs...and you can do this in a personal trading account...so why aren't you?
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you are presenting yourself as an experienced trader...
if possible, i would suggest writing up a history of all your trades in blog format...from the last year, with annotated price charts that include the pre-trade and post-trade px action...depending on your timeframe.
If you are day-trading intraday, then use 5min charts showing 2-3 days of price action, annotated with your entries and exits (regardless of how you determined your actual trades..use this to demonstrate to your reader what was happening in the market). If holding over multiple days, then 4hr charts showing 1 month of price action (again, annotated with your entries and exits).
This is the only way to "prove" your trading prowess. When looking for experienced traders, firms want a) historical success b) a repeatable method
When i refer to "annotated" charts...that includes "why did i take THIS trade, at THIS price, at THIS time" (and what were my risk parameters...how much were you willing to lose on the trade? How much pain did you have to endure?). Then continue this process of blogging your trades in real-time. (not at the end of the day...but in real-time, as you buy/sell...post blog entries with the trade, annotated chart, risk parameters, stop loss, etc...). Don't delete your losers. Everybody has losers, unless they lie.
If you can't answer those questions...then why would a firm hire you? That is the job...This blog format is your best chance at proving that you are. Its hard, but thats why everybody doesn't do it.
Twitter is the blogging platform of choice for this...because you can't back-date your twitter trade entries (it will always be assumed that if its possible for you to cheat...that you will cheat..so you need to nip that theory in the bud by posting trades in real-time where you CAN't cheat...even if you wanted to).
Example trade tweets:
what: "just bought 2 /ES contracts @ 2132.25 risking 5 handles to make 10" (annotated /ES chart image with entry attached) why: "my model says short term /ES momentum is to the upside right here, right now"
you will find a handful of respected traders who do this on twitter...if you can do it...then you can pretty easily say to a prop trading firm "i post my trades in real-time on twitter...follow my twitter blog for a few weeks, and then if you think i'm a good fit for your firm, i'd love to have a conversation". Then 2-3 weeks later, summarize your results, and ask for an interview.
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