The subject matter of Remote Trading on US Stock Markets in Poland started in the rough for my matter. Here I’m completely honest, because I know what my merit was, that many proptraders moved, changed their conditions on much better and started to receive payout that reflects the work, which they had to do. Of course all when compare it to trading in prop trading offices (I wrote about that in other article mentioned below).
It began in 2011 when I organized the first edition of DayTrader Event. People could find out what are the possibilities in the world. That it is possible to do the same thing, but definitely with a better payout split.
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 and little motivation – i.e. how I began my adventure on the U.S. stock markets
Part 2: Proprietary Trading Firm – job in the proptrading office
Part 3: Remote Trading – for whom
Warning for prop trading offices
At the beginning I will bring a certain history from a few years ago. One of proptrading offices which operated on the market and had its branches in many cities in Poland – Trading School – wasn’t prepared to the fact that traders can leave. When traders went to the owner for the rise of payout, they heard a refusal at once. They decided to end the cooperation. Instead of offering own traders the best possible conditions that reflect their work – the office started to carry traders after courts. Even I was involved, since I was called as a witness. Although, I had never work in this company and I had nothing to do with them. Witness of what, until today I don’t know. Certainly they had problem with me that I was writing about possibilities in the world. Owners of this company had this weird time. Probably it was that I led the only site in Poland to this subject, I met most of proptraders in Poland and I want to recruit them. Such an industry, we know ourselves and we meet, which isn’t so difficult 🙂
It is a good warning for all proptrading offices. Owners forget that they don’t have an enterprise. It is not a factory, in which something is produced. Proptrading office it is only the skill, experience and generated profits by traders. When they will disappear, on the same day the profit of company will disappear. For education of new one, from 0 – it will take a lot of time. And taking into account that usually best traders in offices weren’t taught by the owners of their strategy, but they figured out them by themselves – it is not possible to quick replace the man and teach him strategy that has gone; because simply the owner doesn’t know it. Therefore, Trading School is no longer on our market. And it was sufficient to treat with respect of own traders. Is it so difficult?
For whom is Remote Trading?
In the previous section of “Proptrading” cycle I described four groups of traders. In my opinion Remote Trading is included in:
Group #3 – You have an account at the broker on the U.S. stock exchanges or CFD. You already generate profits.
Group #4 – You currently trade in the proptrading office.
What’s the difference between Remote Trading and a job in the prop trading offices
Remote Trading is still trading for the proptrading company, but in this case to own financial risk and without the owner of the branch. You trade directly for the head office of proptrading company with the own financial security.
You trade directly for the head office of the company or subgroup, which cooperates with it. Such subgroup is my RemoteDayTraderGroup.com. In each of these cases you are sure of receiving a great payout. In case of subgroup dedicated to the given market (e.g. in my case Polish) you have a full support in this language and a lot of extras 🙂
However, the key is that as a remote trader you take the financial risk. You have your security in a form of “performance bond”. In case if you lost in a unique situation more than you have on performance bond, you will have to cover this difference.
Although, in those companies are departments of the risk management, which guard maximum level of performance bond, there may appear unpredictable situations.
What the prop trading company provides?
There are certain differences between what the proptrading offices provide, and what do you receive as a Remote Trader.
- Trading Capital – so-called buying power
You have good trading strategies, but for example you don’t have a capital. Buying power offered by the proptrading company will provide it for you. Buying power, i.e. capital, which you can use in trading. Here I emphasize that this aren’t the customer’s money of the company, etc. The company doesn’t accept any deposits from people from the outside. Therefore, you don’t manage money of third parties.
- Commission rate
You are an active daytrader, carrying out a few/several or dozens of transactions within a single session. In such a case you start calculations. Where it will be cheaper? In case of Remote Trading – commission level depends on the volume generated by you.
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Payout split
In case of Remote Traders, payout split is usually on a level of > 80%. Everything depends on whether you have a trading history. Your average monthly profit is significant and on it the offer is based, which you can receive for the given moment.
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Charges for data/platform
Traders in proptrading companies are treated as pro traders, i.e. they pay for stock market data in a professional form. Therefore, all quoting cost about 300$. To this amount it is necessary to add payments for the platform. I use Sterling Trader PRO – the cost is 135$ per month. Below costs of quotes:
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Trading position
As a Remote Trader for trading position you must take care yourself. Apart from the computer you must pay attention to stable Internet connection.
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Development/trainings
Remote Trading is directed above all to experienced traders. Therefore, companies don’t offer trainings or courses for people who wish to open an account.
Do you want to be a Remote Trader?
Remote Trading is not for everyone. In case of companies, which offer a possibility of remote trading – most requires interested parties – so-called track record i.e. trading history.
Alone for a few years I did similarly in my group. Then I decided to open also to completely green persons. I stated that if somebody strongly wants, and succeeds – why not to give him a chance?
Not everyone has so close to the proptrading offices, in which they can start. In such case, the possibility of trading as a Remote Trader is perfect. However, remember that being a remote trader – you are your own boss. Hence, no one will stand over you with a whip and guarded whether you are cutting losses out, whether you hold on to your assumptions. Through this stage you will have to go alone.
Somebody may say that Remote Trading takes traders from proptrading offices. Yes, it’s true. But such is the market. It’s the same as traders change accounts in brokers, because one has a better offer from another. It’s similar on this market. In my perspective – I traded for a few years in the office, I let the company earn. For me transition to remote trading or trading at the broker it is the only option for definitely better payout i.e. profit distribution.
Check offer from RemoteDayTraderGroup.com
What is the difference in payout split
Thanks to prop trading, traders are able to receive payout up to > 70% of results, rather than 30-50 % as in proptrading offices. I provide this level from 80% with a lack of trading history. A considerable difference, isn’t it?
What agreement is concluded in Remote Trading?
It is usually so-called Trading Service Agreement. You sign it directly with the proptrading company. Based on this agreement, you receive conditions that you negotiated on the basis of your experience. Formalities in addition to signing the contract apply to signing the next “Exchange agreement” for quotes and access to markets. After all that remains transfer – and expectation for your account activation.
Settlement of taxes
In proptrading offices the owner usually employs traders on different type of the agreement. In case of remote traders, the agreement is signed directly with the head office of the company. All settlements are on the head of trader. He must take care of tax settlements. Most often remote traders have their business activities.
Remuneration
Remote Trader earns only % from generated profits. Companies don’t pay the base salary.
You have experience in U.S. markets
In this case, the terms of cooperation may be even better. Personally, when I receive so-called track records (i.e. history of trader results) I see clearly – what are the trader’s slides of capital, risk and stability. In case of good track records, we negotiate even better deal for trader.
Remember that proptrading companies differ from brokers, that they are interested in traders. The aim is to take the last cent provided that you carry out turnover. The most valuable are traders who generate profits, best stable. Do you see the differences in relation to the broker?
You don’t have experience in U.S. markets
In this case, I think that it is worthwhile for beginning to reduce the risk. Learn to trade; develop your strategy – with smaller risk. Don’t try to earn a lot of money right away.
It is not a casino.
Start with 100 shares, which constitute the minimum size of position. Reduce your daily losses to e.g. 50$, or maybe to 30$.
Reduce the risk – do not trade on expensive companies, with high volatility, high spread.
In this case, the terms of cooperation can be standard on the start. In relation to the fact that you don’t have trading history, the company isn’t able to determine to determine the risk to which you expose them and your potential.
How much time is it worthwhile to devote when you don’t have experience?
Everything depends on how much loss you can afford and how much free time you have. Just as in the proptrading offices, I think that a period of 4-6 months is appropriate, maximum 8 months. If at that time you won’t start to generate profits, you should find yourself a different job or try on other market.
It happens that I beginning the cooperation with remote traders, who give up after a few sessions or 2 weeks. In my opinion, it is too short period to check and assess own potential.
As a Remote Trader must I pay some funds?
Yes, as remote trader you have your own financial security. The same as when you open the account at the broker. However, you don’t trade with these funds, they constitute so-called performance bond. This is security up to obtained Buying Power – i.e. real funds, which you can trade on the stock-market.
Is it only daytrading? Whether they are possible overnights?
In case of Remote Trading, there is possibility to use overnights. However, in this case a greater financial security is required. Such a possibility is usually offered to traders, who have already experience and trading history.
If you don’t have an additional agreement, which enables you to use overnights, in such a case when unhappily you won’t manage to close the position – you must be aware that payment for leaving position overnight will be charged (rather small) and the company takes over the entire profit, but the loss is on you.
If you have experience, try to negotiate 🙂
Personally, when I receive so-called track records (i.e. history of trader results) I see clearly – what are the trader’s slides of capital, risk and stability. In case of good track records, we negotiate even better deal for trader.
Remember that proptrading companies differ from brokers, that they are interested in traders. The aim is to take the last cent provided that you carry out turnover. The most valuable are traders who generate profits, best stable. Do you see the differences in relation to the broker?
In view of the fact that I lead the oldest and largest group that offers Remote Trading – I invite you to visit www.RemoteDayTraderGroup.com – where you will find information what Remote Trading Company has to offer.
And at the end – Pattern Day Trade Rule
Trading as a part of Proptrading Company, we avoid Pattern Day Trade Rule. Thus, trader is not forced to hold the capital of min. 25 k$. Of course, this doesn’t mean that such or larger security traders a part of proptrading company don’t have. However, at the beginning it is possible to start from 3 k$, which in relation to 25 k$ constitutes a big difference. More to this subject you can read in the article: Pattern Day Trader – what consists of and how to avoid it.
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.
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Do you have questions in relation to Remote Trading? Write in a comment below. In the next section I will share with calculators of profitability, in which you will be able to compare the profitability of trading at the broker, in the proptrading office and as a remote trader. Everything out clearly!
