From J Livermore to now, bucket shops live! Will people never learn...
Earn2Trade Founder Charged With Fraud
- Thread starter LCK2000
- Start date
It's not the size of the dog in the fight, it's the size of the fight in the dog.
How are these related? I don’t see how this is a black eye for the whole “we will fund you” industry.
It calls into question E2T's entire operation and without serious consideration and outside auditing I would personally be concerned that this guy's criminal enterprise extended into his other ventures as well.
They aren't for the first 1500 withdrawal limit. You run a demo even if you're funded (at least for a while). It's in the paperwork you sign.
The business model isn't bad. Very few people are actually going to come out of this shit ahead anyways. IMO this model has saved people a lot of their own money. Why are you so against it?
Did you read his post??
As I said before these "allegded' crimes are not about this business model and nobody is saying that.. as it happens one person seems ( alleged) to be involved in both operations at that time and in any case lets remember innocent until proven guilty
and even if found guilty if the activity had nothing to do with " Test fee prop " business then technically we can't mix the two together.
How ever as all can see this creates lot pf bad press and raises questions about this Unregulated or thinly regulated Prop model
Being unregulated with min capital requirements it has potential of attracting more scruples players.. yah yah we know MF Global was regulated and still ran away with millions)
Now coming back to you comment about "It is not bad..." yes for those who promote it, however there are serious questions
Why people question this model! specially after into of products like Micro futures ( but lets that keep aside)
1) These kind of Firms call themselves prop but very carefully separate the "test fee" arm and the " actual trading arm" WHY? and even then is the funding arm regulated? in some cases it is
if so so why not have one entity... real answer is to save back side ( theirs)
2) The focus seems to be on churning thousands with small test fees and funding very few.
REAL prop firms don;t do that people like Bone has mentioned many names what REAL props are
As an individual many would say oh I lost $150-200 on a test no big deal.. lets move on.... but count/ look from other side
SO it is the ethics of this model that is in question
Sure many of these firms say our motive is to really funds as many a possible but then think why the hamster wheel accusation is thrown at them ?
If the motive is pure then automate the testing and hunt talent at your own cost or at least be upfront and offer "first Loss " type funding! which would be much fair to all sides
3) The entire proposition is why risk your own money when you can try for funding by paying test fees.. SURE looks interesting but How much test fee/ how many times ? There must be a break even easy to calculate and specially with intro of Micro futures it is easier to test yourselves.
4) within this model there is a huge question mark about Trailing draw down / Fixed etc.. read other peopls detail explanation
5) Mischievous marketing " we will fund you for $150,000 AS IF it is real $150K why they dont clearly mention it is Notional 150K
6) All of the above with those companies who are atleast in major jurisdiction .. think about those who are base din Tinpot countries where you can get financial services licences under $10,000
I hope you do realize these points.
Thanks Trump for tight regulations??? he is the one for dismantling regulations free for all is he not? Dod Frank/ reduction of leverage etc was done during Obama administration was it not?
So who own
So Axon who owns the funder Helios? which I believe is a regulated CTA? and idea was there not cross ownership?
if you happen to be a skilled trader with literally no capital whatsoever (for whatever reason, like you're literally broke as shit and don't even have $1000 to your name), these funding companies do provide a service.
you're basically risking only $100-300 to receive $2000-$4500 worth of margin. then you can easily use this to run up a funded account to $5k-$10k, withdraw $5k-$10k to your personal account, then trade on your own.
if you had to start with only $100-300 trading the micros, it'd take forever to ramp that up to $5k-$10k with prudent risk management.
that being said, i've criticized E2T quite often in this forum b/c the way they trail the trailing max drawdown to be based on unrealized PnL is complete bullshit from a trader's perspective. anyone who trades for a living knows it's absolutely scummy at best, scammy at worst. reminds me of binary options trading...
even a company as shady as Topstep doesn't employ a trailing max dd based on unrealized PnL. and i really don't like Topstep holy fuck.
you're basically risking only $100-300 to receive $2000-$4500 worth of margin. then you can easily use this to run up a funded account to $5k-$10k, withdraw $5k-$10k to your personal account, then trade on your own.
if you had to start with only $100-300 trading the micros, it'd take forever to ramp that up to $5k-$10k with prudent risk management.
that being said, i've criticized E2T quite often in this forum b/c the way they trail the trailing max drawdown to be based on unrealized PnL is complete bullshit from a trader's perspective. anyone who trades for a living knows it's absolutely scummy at best, scammy at worst. reminds me of binary options trading...
even a company as shady as Topstep doesn't employ a trailing max dd based on unrealized PnL. and i really don't like Topstep holy fuck.