092723 stats about prop firms and why they make sense

What we're going to talk about today though, really is just understanding some things that are kind of the nature of prop firms and trading in general. But these are really important for you to keep in mind. And it's easy for these to kind of get lost in all the information that is part of being a trader. Here's what I'm talking about. He brought up the point that with the prop firms, it seems like so few people actually make it past the evals and are actually making good money working with a prop firm because of the restrictions, the, you know, the different firms that are out there, their rules. And so, you know, he was saying, well, you know, it seems like, it seems like only 1% of the people are actually making money with it in these prop firms. You know, their whole game is to just make money off everybody that can't, you know, can't make it here. And I said, well, if you think about it, you know, the numbers, the statistics for the prop firms are probably very valid. And here's why. With the prop firms, they're putting their money at risk. When they say, sure, here, have a funded account and you trade it, they're putting their money at risk. It only makes sense from their standpoint that they exercise good risk management and really want to make sure that everybody that does get access to a funded account proves themselves first. Not just, hey, here's a couple hundred bucks my fee to have access to the account, but you have to prove that you actually can, you know, you have the skill set to make money. And that's, you know, that's the deal for them. And it's kind of cool. A colleague of mine who, you know, he's got a prop firm of his own, he said, well, you know, for the, for the prop firms, for the brokerages or the, you know, the ones providing the money, this is a great way for them to, you know, find traders that have skill and can trade, you know, trade their money for them. Instead of them having to put in money to go out and, you know, find traders and train them and all that kind of stuff. It's like, no, they can open up the prop firm in this manner and say, here, you know, come, you know, go through an evaluation process. If you prove yourself, then, you know, we'll let you, you know, we'll work with you and give you a good, you know, the lion's share of the profits. And so for, you know, from their perspective, to find good traders that, you know, can trade their funds that they have available, this is a good strategy for them. Because, yes, they want to find people who have the competence and the skill and have proven, you know, demonstrated the ability to trade profitably. That's who they're looking for. But on the flip side of it, you got all these people, you know, that are jumping into prop firms and they're thinking, oh, hey, you know, yeah, I can, you know, I can get access to a 25 or 50 or $100,000 account or quarter million or half million dollars, maybe even a million dollar account. Wow. And you know, it's not going to, it only requires a little bit for me. I don't have to come up with all that money. Well, the thing is, again, the prop firms are okay with letting you trade that, you know, that size of an account, but you have to be bringing the skill set. That's the whole thing. And so many people dismiss trading, period. You know, forget prop firms. Historically, you know, it's been if you got money, that's all you really need to, you know, that's the only qualification you've got to trade. You've got money, you can open an account and be trading today. And so that's part of why the statistics for trading in general have always been horrible. Because the low barrier to entry and no requirements for training. So you got to whole bunch of people getting into training or trading and you know, they look at, it's like, oh, I get it, I can do that. And so they jump in thinking that they can kind of figure it out as they go or they dismiss, they underestimate how, you know, challenging this job really is. This is a very much a skill based occupation. And if you're not bringing the skills, it's going to be rough, you're not going to make money, or at best you'll make it sporadically if, but if you are bringing the skills, the skill level, not just the skill sets themselves, but the skill level, the competence. Yes, trading is wonderful and you can make a good living at it, but you got to be bringing the skills. You can't just show up and say, hey, you know, I got 25 grand, I can open an account, I'm going to be set for life. And without actually becoming the skilled trader that you need to be. And it goes even further, just a step further with prop firms because now they've opened the door to people who never even amassed the 25 or 50 or $100,000 to trade with in the first place. It's like all you need to start with a prop firm is a few hundred a Couple thousand bucks and you can start trading with a prop firm. But again, the only reason that only 1% or so are making it and making it work properly in a desired fashion is because these are the people that are saying, I'm going to treat this with the proper respect. I'm going to develop myself as a trader and develop the skills and get myself, you know, where, yeah, I'm bringing my A game and it's a good enough game that I'm bringing to actually, you know, do this and make it work. That's the difference. So whether you're trading your own funds or you're trading a prop firm, the whole key to it is get the proper training. Now if you're going to be self trained, that's the hard road to go. This is not an occupation that lends itself to just being figured out how to, how to do it successfully, how to be a successful trader. It's not, it's not a situation like that. The markets don't give you any kind of constructive feedback aside from whoop, screwed up again, take your money, screwed up again, take your money. That's the only feedback the markets will give you. They are not going to teach you what you're doing wrong and what you need to do to fix it and how to again, level yourself up. Aside from just being able to weather a long standing beating financially and psychologically, that's the only training the markets will give you is they'll just continue to beat you until you figure it out. And that's why it takes so many traders and you look at a lot of books, they'll say, yeah, it takes five to 20 years to become a successful trader. If that's how you're learning, it's going to take that long. Now the nice thing about living in the day and age that we do is, is you have access to some good people who, and granted, there are a lot of scammers, there are a lot of strikesters, a lot of just plain BS gurus out there that, you know, they're going to, you know, share their secret with you. There's plenty of that. But there are a handful of people who are genuine in what they're doing. They actually do have the skills. They have actually achieved what you're looking to achieve. That will train you. And the thing is, you need to seek out the training so that you're not taking forever to get there. Because with a prop firm, you're paying for it every month, literally out of pocket, not just your time. If you're Trading your own money, you know, you have your own money at risk and your time that you're investing. So it only makes sense to go ahead and get the training to learn the things from other people with the experience, tap on their experience, their expertise and you know, that way you can shortcut the learning curve so that it doesn't take you five years plus to actually get there where you're making money profitably. As a trader, you can shorten it down to. If you, if you get with the right trainers, like with my clients, I can get you there pretty fast because like I said, it's a skill set and it's a skill level. It's getting the proper training and it only takes a couple months, two, three months, you know, six months tops if you're, if it's really getting drug out, usually, you know, six to eight weeks, two to three months and you're standing on your own two feet, you're solid and you know it with. And there are other providers, you know, where, you know, they'll teach their strategy and it seems like a common thing and what they're doing is valid. I'm not challenging that, but you know, to say it'll take like up to a year before you're competent with trading their method and that's fine. And like I said, what they're doing is real. They're making it, their students are making it. They're just on a little bit longer timeline. So the thing is, you can't just cheat. You can't shortcut this game. There's no cheat sheet. There isn't. There's no magic strategy where it's a push button thing and you're going to be making money without any effort. You're going to have to invest in yourself, you're going to have to invest money in yourself, you're going to have to invest time in yourself. But it's a great investment if you do, if you want to go with a prop firm, it's a fantastic thing in our day and age where, yes, you have access to funds where, yeah, you can be trading a good size account, make decent money. I mean, if you think about it, okay, if you're trading, you know, prop firms account, you have a $50,000 account to trade with and you're making 10% a month on the account. That's five grand. Cool. Okay. And you're getting say 75 or 80% of that. Nice. You're bringing home, you know, call it, call it 80%, that's four grand. That's not Bad because you're trading somebody else's money. All you have to do, again, your end of the deal is you have to bring the skills. You have to bring the skills. If you're not bringing the skills, you don't get that, you don't get the goodies, you don't get the rewards. You can't cheat this, they're not going to let you. And it's not how this works. So I'm stressing this to you because there are so many people, again, they get into this, they don't show this occupation the proper respect. They dismiss it, they underestimate it and they pay a horrible price for it. And I don't want that to happen to you. Now, again, seek out the good training. If you want to talk to me about it and we can sort out what kind of training you need, where are your gaps in your skills, I can help you sort that out. And if I'm the person to help you, great. If you need help other than what I provide, I have a lot of good colleagues in the space. I can point you in the right direction to somebody who's good and they operate with integrity, they're not a scammer. So I can point you in the right direction. But the thing is, don't just sit there and try to figure it out by yourself and beat your head on the rock and take the beating from the markets. Don't. There's absolutely no point in doing that because that is. If you think that that's the cheap way to, you know, to go about it, or you know, the way to, you know, spend the, spend the least money or time, that's a bad misconception because your time is money. And all those, all those months that you're not making money, it's costing you, literally, it's costing you. So you're going to pay for it one way or the other. I mean, you are paying for it one way or the other. You're paying for it in mistakes and, and missed out profits and time. Or you're going to pay for it in investing with somebody else, investing in yourself so that you get the training from them and their experience and their expertise so that you can level up faster than trying to do it on your own. Anyway, I hope this has been helpful. Trading can be a wonderful occupation if you'll just do it right. If you'll just approach it again with the proper respect and don't underestimate it, don't dismiss it. But again, you say, hey, yes, this is a formidable thing. But I'm capable. With the right training, with the right help, I can do this. So if you're in a position to trade the fact that you're here, more than likely you've got the personal assets to make it. You just need the help, you need the training and then you can get there and you can make it a reality. So let's do that again. I hope this been helpful. If it has, just give me a like down below. Subscribe to my channel if you feel like it. I got tons of other videos on all the different aspects of trading and you know, if you have friends who trade, share it with them, you know, help them out too. So again, it's been helpful. I hope this been helpful. And if you know, if you want to talk, swing my inside out trading, well, you know, we'll have a trading assessment call, see where you're at, you know, figure out what your obstacles are right now and your gaps and like I said, how you how to get you past those where you at. Now you're on a comfortable, profitable, consistently profitable trading and you're enjoying it and it really is what you wanted it to be in the first place. Anyway, again, hope it's been helpful. Talk to you soon. Cheers.