Proprietary trading – my story on how did I start

In 2005 I made a decision that I want to try my strength in the proprietary trading office, as a trader on U.S stock exchanges. I graduated the first year of studies and such an idea day by day appeared in my head. I just come across on the net on advertisement of the Trade Swift Company, which branch was located in Gliwice, Poland. I couldn’t find better. I just thought so and I had high hopes that I wasn’t wrong. I decide to start trading in Proprietary trading firm.

It was a period, in which I was very excited with forex, with stock exchange and generally with possibilities that it could give. Although, now when I think of it, I had absolutely no idea what possibilities the market can give and how it can draw us. I knew only that I’ll do my best to try.

Today I would like to describe my history, how I found myself on the proptrading market. Why I focused on U.S. stock markets, and what changed in me over 2007 to 2016. And it’s been nearly 9 years, so it is a good bit of history. I’ll skip 2004-2007 when I actually was still in its infancy and I searched for my path. I will focus on a time when I already found it.

This article belongs to “Proprietary trading” cycle, in which I discover the proprietary trading world to you. The industry, in which I am from 2007 and I try to popularize it since then. I invite you to read other parts in chronological order:

Part 1: My history in proprietary trading firm and little motivation – i.e. how I began my adventure on the U.S. stock markets

This article is the first in a series, which fully focus on Proprietary trading subject matter and Remote Trading. In details you will learn whether this industry is for you and you will find answers to lots of questions. No mislead, so that you could find out what to expect, as well as what are pros and cons. There are certainly much more pros 🙂 Articles will be posted over the next months.

In 2005 I didn’t manage to begin. Unfortunately, I wasn’t able to reconcile my studies, with the work as a trader. I could be maximum 3 days in the office. However, the owner of the office disagreed to it. He demanded 5 days or not at all. I understood it, but it was worthwhile to ask 🙂

It came off two years later. In 2007, in September I began my adventure on U.S. stock exchanges. This adventure lasts up till today, but currently in different form of cooperation. I don’t want you to treat it as boasting. I was just above 20 years; I didn’t know what to do in my life. I decided to take a chance and try – because it was probably the best period to take such a risk and decision. It will work, or not. At least I won’t regret that I didn’t try. Many persons always look for excuses. If you look for them, in principle you already have an answer for your question 🙂

How the beginning in proprietary trading office looked like?

I had no idea how it will look like. How such a job in the trading office proceeds. I just sent an e-mail with my Resume and I waited for response. Fortunately, it was a recruitment period. So the first recruitment interview was held after a few days from sending the Resume. I don’t remember whether exactly the process proceeded in this order as I describe below – because it was so long ago. But I will try to reconstruct it in similar form.

Before the conversation I read a bit about the Trade Swift Company. It was one of the oldest Proprietary Trading companies on the market, which had its offices worldwide (in principle, these are not branches, but independent offices established by local owners). That created my trust. Although in that period on the Internet I could mainly find information about the fact that nobody will give me free money for trading, certainly they will cut out my kidney and other bullshit.

The conversation was as other interviews. Then it wasn’t such a typically corporation. Rather more loose, a few questions messed up, a few normal. Later next stage – answer to questions sent via e-mail. After this stage, already the final conversation, in which I got the answer to most of bothering me issues. In principle, I had only one crucial – whether if I’ll really loose, I won’t bear the financial risk 🙂 haha. It was hard for me to simply believe that I can just loose and nobody will do anything. Well, it just was. During my work in the office, several traders left with a loss – well, it didn’t matter. Nobody chased them by it.

Later I found out that actually the company hired everyone from the street. Yeah let’s say on the fly, but there was no more problem with engagement when everything was sorted out in the head.

From what I know, the recruitment process has changed a bit. But certainly persons, who are very determined to be a trader – will cope with the recruitment 🙂

It started – first days in the proprietary trading office

The first week from hiring I spent on training. Well, training is too much said. After 2-3 hours a day I listened to information about U.S. stock exchanges, ECN, difference between U.S. stock exchange and other. Particular emphasis was put to the possibility of earning on credit (it was a main strategy used then in the office). Nobody learned us trading strategies. It was already my task to do. I couldn’t already wait, when I will launch the real platform and I will start to trade.

In the training it was 5 of us, or more. 5 I simply remember 🙂 Quite apart from this five remained to this day only two – me and my friend Andrzej (to whom I send greets :))! What’s funny, we sat next to each other, and after a few days it turned out that we had a birthday on the same day 🙂 Generally, birthday in the trading office also were different. Beer, vodka, trading 🙂 For sure, it wasn’t a normal work. Where in the bank employees spend birthday by the beer. And in the office trading – yes 🙂 It also showed that there is a completely different climate, different atmosphere. As for 23 year old man it made a huge impression. Particularly that I was then after six-month work in the bank.

Okay, back to the subject. After week training, we launched the demo platform. Basically just to see how the platform looks like, to understand how to place an order and that’s all. After several minutes, which I spent on understanding the platform – I shifted to real account. I liked it, lack of messing with demos. Only at once learning on the real account, where real emotions and decisions appear, which result in a profit or loss. And if you have ambitions and you start with other people – then you want to show off and start to earn as soon as possible 🙂

In principle, I had no idea what to trade, how to seek companies, how my strategy is supposed to look like. I started to work above them. I was limited by imposed program of risk management.

This risk caused that:

• I could open a position with the size of maximum 100 shares (it was increased when I had 3 days on plus in a row or the week finished on plus)

• my daily stop loss, when I had no father possibility to open the position, took out 50$ (it was also increased when I obtained stable profits)

Such a comprehensive approach caused that I strived so that my trading was agreeable with possibilities that limitations of risk management carried out.

The first months looked very similar. After 2pm I was in the office (at the beginning I didn’t trade in pre-market). Start from 3:30pm and so up to 10:00pm (unless earlier a stop loss cut me out). But after it cut me out, I didn’t give a damn about the session. I observed, thought and figure how my strategy was supposed to look in trading. When I finished at 10:00pm, I got back home (what took me an hour) and I didn’t go to bed, but I spent 1-2h above graphs writing interesting companies in excel tables, scopes of moves. I searched for repetitiveness on the market.

Older traders a motivation

When I came to the office I got to know the entire group of traders, who were there for months or years. People in my age or a little older; normal guests; zero primness!

When you see next to you the same fellows, who make good money from the market, then you may think – why wouldn’t I succeed. For me their results were a motivation for action. The second kick to work above my strategy was the fact that I didn’t like the guiding strategy of the office – i.e. credit trading. Ok, it gave you money, but I have always identified the stock exchange with catching movements. I also concentrated on it. It is possible to say that I and one of my friends, who started in the earlier group – we were the first in company, who started playing for stronger moves.

What’s most important, I taken from older traders that:

• they very closely observe their stop loss. Here is no illusions, they cut loss positions out right away without unnecessary reflections

• they play repeatable setups. What checks out we should play. Without unnecessary combination.

It gave me a lot to think. We draw from better and from them I took advantage of these advices. Until today I try to search for repetitiveness and this brings the best effects. I’d advise you to try, than to combine or to jump from one flower onto another.

Three crucial months

Well, maybe four. So I just gave myself to reach the level, which in the company was called “being a trader”. It also included % of generated profits. In this period, when I started, it was a level of carried out profit of 2000$ within the calendar month. I was very close already in second month, but I started to show off and it ended up worse. In the third month, before Christmas (or maybe before the New Year’s Eve) I reached the required 2000$.

I started to earn. There were no craziness from the first payment, because then I received 15% from profits. From 2 k$ after deducting fees, desk fee was about 300$. Taking into account that the dollar exchange rate was a little bit above PLN 2, my payment was deadly high because amounted about PLN 600 gross (300$). Madness lol 😉

But there was satisfaction 🙂 In the next month there has been an increase to 35%. It already had a greater sense.

Consecutive months passed, results were even better. Although worse periods appeared (but still ended with the month on plus). It showed me that market changes. And it is necessary to modify up to it also own strategy.

How I connected studies with trading?

As they say ‘where is a will there is a way’. I did it. Above all, the advantage was that I had a great schedule of classes. I had usually 2 days off, without classes (or only lectures, and who would attend lectures). With tutors I also simply reached an agreement. I.e. I went when I could (in the morning before the session) or I simply went only credits. With tutors it is necessary to talk. Even when they are supposedly to be hard, when you want to say frankly that you are trying to connect the work of dreams with studies – they may surprise you:)

If during the studies, you won’t be able to reconcile it, then certainly when you will go to full-time job, you won’t manage physically to jump around the first and second work. During the studies you don’t also have so many obligations.

I encountered the strongest period on the market

Who of you traded in 2007-2010 must know that such things go down into history. In the proprietary trading office, I traded both during the slump and boom.

Such diametric changes on the market, it is the best school in trading. You must quickly adapt to trading whether to declines or increases. Stock exchanges in the United States provide such a possibility that there is no problem with trading on declines.

Many persons watched films about the stock exchange subject matter (Too Big to Fail, Margin Call or recently The Big Short). I participated in all of that. These all events were an everyday life. In TV there was loud about Lehman Brothers fall, Bearn Stears fall or problems of other banks – we traded on them.

They said that Fannie Mea or Freddie Mac fails down, and for us these were gold times to trade on such potential bankrupts.

What most hurts me from a perspective of time is that I didn’t exploit the potential of market in 100%. I wasn’t simply aware of the fact that the history was build. The history about which one time it will be written. Therefore, in the moment when I made a good daily profit, I left to do other things. In spite of the fact that it was after an hour of trading! And it was possible far more to use the potential of session.

The rotation is large

Over several years which I trade in this trading office, quite a lot of persons came and go. Each of them aimed to be a trader, but not everyone could deal with it, had predispositions, appropriate motivations, etc.

Some reached this required level of 2 k$ after a few weeks, other after a few months or year. Average, I think that was around 4-6 months.

What was crucial

Most often traders became persons who firmly were motivated and simply worked to achieve their goal.

By observing persons, who sat next to me or older traders I think that good results achieved those, who:

• had a humility for the market

• nobody simply proved anything to anyone, they just did their own

• didn’t look on other, in the end everyone has different character and aversions to the risk

Looking also at who and when arrived to the office, I had a few observations. The best in spite of the fact that regular session begins at 3:30pm, were in the office much earlier. Already at 1-2pm. We traded pre-market and prepared to the session.

Persons who came a moment before the start of session – stood out. That is my opinion. The same was with persons, who were ambulant encyclopedias. They looked at all formations, indicators. And here weren’t needed so many combinations.

Another important thing – an attempt to follow even the best traders in the office rarely ended successfully. Everyone had its strategy, even when they were similar – still differed in something. Friend traded along with his wife. Theoretically, they sat next to each other – they could play the same. But it doesn’t work this way. He had its own style, position size, aversion to the risk. She had also her approach to trading. Although, they traded the same companies in a similar style – their results differed.

Volatile market

Preparation to session had special importance when the market changed. It has most often been a period which caused sifting in the team. At the change of market it is always necessary to do some work above the strategy and adapt to what is played.

Over the years I said goodbye to many friends, who in my opinion had a shit-hot potential. But in “easy” market where strategies worked perfectly, probably they got used to fast earing. When market diametrically changed, companies played by them no longer behaved like used to… so they got the short end of the stick. And the stock exchange doesn’t forgive. You must adapt to it, rather than on the contrary.

One of my pals in the first year very well dealt with on companies below 1$. But after some time they weren’t already so easy to play, turnover on them was small; they were removed from the stock exchange, etc. He didn’t adapt to the new situation and finished his adventure.

Other friend achieved really sensational results on financial ETF/ETN, but when the volatility of 2007-2010 years disappeared, the volume became smaller…. these companies also diametrically changed their behavior. They didn’t already have this changeability, and the volume became drastically smaller on them. As you can guess, similarly was with his results.

I also struggled with this problem. At the beginning a cyclical nature of the market I felt every 3-4 months, later every half a year. Every time it was for me a worse period in results, overfilled with great reflections and dithers thoughts. But I always left with a defensive hand, because I worked to change something in my trading and to adapt to the new situation. The prospect of the fact that I would supposed to leave trading and to go to work was a kick in order to even more develop my strategies.

Therefore, from let’s say specific strategies I shifted to more universal, but still supported by tape reading, which from the beginning had great importance for me. Even when I didn’t know that it has such a name.

Trading and travels

The best what proprietary trading office can give (and not to mention that you are a remote trader and the boss of your own) is a possibility to travel.

If you will decide to apply for employment in the proprietary trading office, it is always worthwhile to ask whether they have branches in other parts of the world.

I managed to go for a couple of months to Central America. Along with the owner of office and a few traders (and what was great even with our girls/wives) we rented the house in Costa Rica and we went there to friends from the trading office, which went through a crisis then.

The crisis was indeed visible, because they moved their office to the garage haha 🙂 but it was fun. We trade and suddenly between us there is a large turtle 🙂 So it was during the crisis:

Beyond the trading, we toured almost the entire Costa Rica, Panama and Nicaragua.

Of course, nobody founded it – all costs were on our side. But even trading a half of the month, and the rest touring, we were on plus.

It is great when you can afford on such a trip while working in the office.

Changes, changes, changes

A trip to Costa Rica was a period in which I made decisions to leave the office and start working on my own account; still in cooperation with the proprietary trading firm, but already to own financial security. It wasn’t, as a matter of fact, some large.

Of course, it was about money. Those years which I spent in the office made aware that it is time to more firmly concentrate on own finances and to have better payout. Since such which I wanted, I couldn’t receive, so I quit. Along with me 3 other pals. And thus began a new chapter in my trader life i.e. Remote Trading.

In that time I organized the first traders meeting – which I called DayTrader Event. In recent years it has grown significantly. On the first edition there were over 30 proptraders from all sorts of companies (but what significance it had), with whom I keep in touch until today. So it just all developed in my new stage in trading.

The next edition of DayTrader Event will be held in 2016 :)).

It seems to me that it is a natural course of life. I’m aware that when in the future I will establish my own proprietary trading office, in which I will teach other of strategies, I need to be prepared that they also will leave some day.

In 2011 when I left the office, I started to create own trading group. I created the first Polish group which enabled so-called Remote Trading. It was an offer for such people like me. With experience and who want to play on own account. Today it is the largest group in Poland with Remote Traders. I also cooperated with traders all over the world. More about the group you will read on the official website: RemoteDayTraderGroup.com

If you would like to start cooperation with Proprietary trading firm just email me or/and find more information on RemoteDayTraderGroup.com. I do cooperate with Remote Trader and also with offices willing to work as a proprietary trading branches.

This state lasts to this day 🙂 Nearly 5 years, since when I left the office, and which enable me to develop. 9 years on the market, when you live from it, it is really a long time.

As you can see, it is possible 🙂 Along with other Remote Traders, who are included in my group, we created the office for ourselves, in which we trade together.

It’s time for you

With this article I start a new series of “Proprietary trading”, in which you will learn about the industry, possibilities, profitability of trading in the proprietary trading office, remote trading towards brokers.

I hope that it will open your eyes and cause that you will become interested to try the career in trading. I won’t tell nonsenses about the fact that stock exchange provides financial freedom (after all, it is obvious), etc. such bullshit tell us seller of dreams and trainings.

I will describe what are the realities based on own experience. That it’s not so easy, that it is worthwhile to give yourself a limit. Above all, that result will come as hard we try.

Trading is a hard and very stressful work. But when you start to make money on it, steadily earning becomes a routine.

At the beginning I invite you to subscription and to watch videos, which I post on my YouTube channel – in which you will find what to expect from trading and how it looks like on U.S. stock exchanges.

Please share this article on Facebook, Twitter – help me to share with this cycle to the largest group of potentially interested persons in trading 🙂 Links are posted under this article!

This article is the first in a series, which fully focus on Proprietary trading subject matter, generally Proprietary Trading, Remote Trading. In details you will learn whether this industry is for you and you will find answers to lots of questions. No mislead, so that you could find out what to expect, as well as what are the pros and cons. There are certainly much more pros 🙂