I think the thing most beginners don't understand is that services like this are not in the business of funding beginning traders, this is just their carrot. They are in the business of charging for paper trading account and, above all, they charge for hope. The hope of a beginning trader that they get funded. Statistics of how those services generate profits is impossible to come by and also the profitability of all subscribers in aggregate. I venture a guess that subscribers mostly pay a subscription fee for a pipe dream, also known as lottery ticket.
True in practice that rarely happens. I've noted the stats on how ridiculous these combine risk/rewards are on another thread i cant remember which one. It one can consistency pass these at the same risk parameters on a real account then you have a money printing machine.Exactly, you seem to have gotten it and are honest enough to admit it. It is a lottery ticket. Nothing more, nothing less. Lottery tickets are for virtually everyone a losing proposition.
Anyone who takes trading seriously enough will first learn the basics and theory, then advance to place virtual trades and assess performance, then advance to fund an account with a small amount and trade very small positions, and ultimately grow size once profitability supports that. Anything else is shortcuts that generally turn out to be losing propositions. Same with the gold rush, gold diggers hardly ever made a dime, its those who sell the shovels who got rich.
True in practice that rarely happens. I've noted the stats on how ridiculous these combine risk/rewards are on another thread i cant remember which one. It one can consistency pass these at the same risk parameters on a real account then you have a money printing machine.
Its a perfectly valid comparison. Getting funded and hence passing the requirements is pure and utter luck for beginning traders. Any beginner who is truly skilled would never ever use this service. They would learn by themselves and they would have worked hard enough to have put enough money aside to, later on, open a small live account. It comes down almost purely to luck. And that is exactly what happens with a lottery ticket.
If one can consistency pass these at the same risk parameters on a real account then you have a money printing machine.
The lotto aspect of this is you put in a small fee and expect a larger return for this to make sense for a business they have to have an edge. $100 for $1500 thats a 15x return for the trader for every 1 funded trader 15 have to fail to break even and more for them to stay in business. These combine companies put traders in a simulated account even after passing their "consistency rules" because they know more than likely they will lose. oneup has a restriction on how long you have to be in the funded account before you can make a withdrawal , I dont know about E2T withdrawal restrictions but i know you start in a sim account so no real money is at risk. Topstep is the only company that when you goto a funded account its real money at risk although now TST has added the option for traders to goto a live sim account with a max withdrawal of $5k(again trading in sim is actually a slight edge to the trader since your orders dont affect the market particularly in thin products)How does this compare to a lottery? The odds of winning a lottery are extremely low (almost non existent) and require 100% luck.
Completing an evaluation account and making money in the funded account requires skill. If you pass it on luck, you will fail later on.
I am not saying traders should go this way or should not go this way, but your comparison doesn't make any sense at all.
I can pass the evaluation with skill, i can not win the lottery with skill.
Again, not saying these services are good/useful or the way to go, in my opinion it just isn't a fair comparison to a lottery. A beginner trader also needs pure and utter luck to make it in a live account if he has no experience, if he can make it in a live account he can possible make it with one of these services.
Passing one of these evaluation accounts might require even more skill than surviving in a live account due to the strict requirements. Of course you can pass it with luck, but you will not be able to keep it long term with luck.
The lotto aspect of this is you put in a small fee and expect a larger return for this to make sense for a business they have to have an edge. $100 for $1500 thats a 15x return for the trader for every 1 funded trader 15 have to fail to break even and more for them to stay in business. These combine companies put traders in a simulated account even after passing their "consistency rules" because they know more than likely they will lose. oneup has a restriction on how long you have to be in the funded account before you can make a withdrawal , I dont know about E2T withdrawal restrictions but i know you start in a sim account so no real money is at risk. Topstep is the only company that when you goto a funded account its real money at risk although now TST has added the option for traders to goto a live sim account with a max withdrawal of $5k(again trading in sim is actually a slight edge to the trader since your orders dont affect the market particularly in thin products)
Why does it matter if it is sim or real money, as long as you get paid when you withdraw?
You are getting hung up on differing properties that are irrelevant. The point of the comparison was the probability of making the cut, admittedly they chances are higher than winning the lottery. But the point was on unrealistic expectations. Your point is similar to saying that the comparison is poorly chosen because for the lottery you need to purchase a ticket in person vs here you can do it online (assuming lottery tickets can only be purchased in person). This might be true but would be an irrelevant to my point property.
I think you still do not quite get my point. Exactly because of all those terms and conditions, the chances of making it are extremely slim. Why? Because not a single person with skill would pay for this charade. Hence, you end up with some bloody beginners who bring to the table hardly any skills in this arena. That spells probabilities of success that can fairly be compared to lottery tickets imho.