Here’s a trader question that came in over the weekend.
What do you think of these prop trading companies that say for a fee of about $5000, they can teach a novice trader to become profitable in about 4 months of supervised trading. I am tempted to sign up but it’s a lot of money to fork out.
I’ve got to say this may be my first question of this specific type that I’ve received – at least so far as I can remember. Prop shops and the like are not something I have anyÂ direct knowledge about. To that end, I’m going to refer Owen and anyone else interested in the subject to Brett Steenbarger, who has dealt with these types of operations and written fairly frequently about them in his blog. In particular, take a look at his Proprietary Trading Firms, Arcades, and Scams post.
Brett addresses the subject pretty well in that post, but I’ll add one further point.
Part of becoming a consistently successful trader is finding the trading approach and strategy which best suits you. A prop shop is probably going to teach you a specific way of trading. Think of it similarly to buying a trading system. It might end up being a very useful thing, but you really need to know exactly what you’re getting going in to know whether it’s going to be of real benefit to you going forward.
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About the Author
John Forman, author of this blog, has traded for more than 20 years, is a professional market analyst, and authored The Essentials of Trading. He is an active participant in trading forums, consults for trading related businesses, as published literally dozens of trading articles, and has been quoted in a number of books and in the media.
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