Proprietary Trading: A Guide for Aspiring Traders
Proprietary trading, or prop trading, is the practice of using a financial firm's own capital to trade in the markets, rather than earning commissions from trading on behalf of clients. Prop traders aim to generate profits for their firm by applying various strategies and techniques, such as arbitrage, market making, hedging, or speculation.
Why You Should Hire A Professional Consultant
Our team has several years' experience working directly in the proprietary trading arena managing discretionary trading accounts and has experience working with advanced execution platforms and trading systems. Contact us today to learn more about our special Training Session (Prop Traders) that will provide you with an edge on how to find the right software and broker to trade with.
The topics we cover include:
• Market Trends and News
• Trading Strategies and Techniques
• Technical and Fundamental Analysis
• Probability and Statistics
• Behavioral and Situational Awareness
Prop Trader Requirements
To become a licensed prop trader in the US, you need to pass the following exams:
Finra Securities Industry Essentials (SIE) Exam
Series 56 Proprietary Trader Exam
Why You Should Trade Prop
Trading prop can offer many benefits and advantages, such as:
• Access to capital: Prop trading firms provide traders with access to large amounts of capital, which can allow them to trade with higher leverage and diversify their portfolios.
• Access to technology: Prop trading firms provide traders with access to advanced technology, such as software, scanners, data feeds, and trading systems, which can enhance their trading performance and efficiency.
• Access to education: Prop trading firms provide traders with access to education, such as training, mentoring, coaching, and feedback, which can help them improve their trading skills and knowledge.
• Access to incentives: Prop trading firms provide traders with access to incentives, such as bonuses, commissions, profit sharing, and career progression.
Conclusion
In conclusion, prop trading is a rewarding but demanding career that suits those who have mathematical or programming skills. By passing the Finra licensing exams, you can gain access to capital and technologies that would otherwise take a long time to acquire. Moreover, as a prop trader, you can enjoy the freedom and responsibility of being your own boss and leading a team of new traders. It is a worthwhile investment of your time and effort.