SFG Trading: The Full Scoop

W

WonderBoy81

In the interest of anyone who is looking for information about SFG trading, I have decided to start this thread to summarize my experience with them - and provide a thread title that would show up in online searches so that those researching can find this. I had started another thread - but I wanted to do this one in order to clearly summarize the issues with SFG trading for anyone thinking of signing up with them. If for some reason this is not allowed, I can transfer this post to my other thread.

So here is a quick rundown of the facts if you want to "trade" with them:
-they appear to accept anyone - i did a fake application of a candidate who said they did not like taking a stoploss, would take large positions, and thinks tesla and apple should be held for a long time(i don't know how bad I could make it) but got the same reply that the application had been "assessed by the risk management team" and had determined that you are a "qualified candidate"
-You are asked to sign a contract that has a noncompetition clause of trading with another company for 2 years
-You do not get level 2 data, but they say you can get it from a 3rd party provider
-You get a limited basket of stocks to trade, low beta, high volume type stuff
-You have no control of position sizes - 100 shares only whether trading $5 or $200 stocks
-You pay $150 bucks/month for level 1 data. The data provided for me at least was lousy - using Sterling trader, with no more than 4 charts open, data would lock up at the market open when trying to view the action of different stocks and flip through charts - this had never happened while I used Sterling with retail brokers - the data was always fine
-they close on all Canadian holidays - you can't trade when American markets are active on these days - many serious traders I know would still like to trade on these days
-They tell you you are trading with real $$$, though I lost more than the "data" fee I paid and was allowed to keep going - seems strange since they appear to take anyone
-Limit orders, 25 min trades/day. 5 min. holding time, are encouraged in the guide they give you - however this was never enforced with me
-Someone said on another thread that they would not meet at an office, but only at a local bar.

How does it add up?
Its a little hard to say exactly, but anyone letting you trade real money would want in my opinion to give you half decent data and tools to work with. Further to that, stock selection, proper position sizing are critical elements of success to the intraday trader. While this could be seen as their "risk management" it is also a setup for failure IMO to not be able to build a winning position or choose an appropriate stock with a good news catalyst. Seeing as they are well placed in search engine results when looking for remote prop trading, i would suspect they do get a high number of applicants who see it as an opportunity and say what the heck to paying $150 bucks to try it out. There is then an argument that can be made that they are trying to generate income from the data fees, and a high volume of applicants. Further to that, there are serious questions if you are trading real $$$ or just a simulator. (might explain why they won't provide first hand level 2 data where you could see their ECNs)

Anyhow, everyone can be their own judge, but this sums up my experience and I hope it can be of some help to anyone researching trading with them.
 
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Sounds like a total scam.


WonderBoy81 said:
In the interest of anyone who is looking for information about SFG trading, I have decided to start this thread to summarize my experience with them - and provide a thread title that would show up in online searches so that those researching can find this. I had started another thread - but I wanted to do this one in order to clearly summarize the issues with SFG trading for anyone thinking of signing up with them. If for some reason this is not allowed, I can transfer this post to my other thread.

So here is a quick rundown of the facts if you want to "trade" with them:
-they appear to accept anyone - i did a fake application of a candidate who said they did not like taking a stoploss, would take large positions, and thinks tesla and apple should be held for a long time(i don't know how bad I could make it) but got the same reply that the application had been "assessed by the risk management team" and had determined that you are a "qualified candidate"
-You are asked to sign a contract that has a noncompetition clause of trading with another company for 2 years
-You do not get level 2 data, but they say you can get it from a 3rd party provider
-You get a limited basket of stocks to trade, low beta, high volume type stuff
-You have no control of position sizes - 100 shares only whether trading $5 or $200 stocks
-You pay $150 bucks/month for level 1 data. The data provided for me at least was lousy - using Sterling trader, with no more than 4 charts open, data would lock up at the market open when trying to view the action of different stocks and flip through charts - this had never happened while I used Sterling with retail brokers - the data was always fine
-they close on all Canadian holidays - you can't trade when American markets are active on these days - many serious traders I know would still like to trade on these days
-They tell you you are trading with real $$$, though I lost more than the "data" fee I paid and was allowed to keep going - seems strange since they appear to take anyone
-Limit orders, 25 min trades/day. 5 min. holding time, are encouraged in the guide they give you - however this was never enforced with me
-Someone said on another thread that they would not meet at an office, but only at a local bar.

How does it add up?
Its a little hard to say exactly, but anyone letting you trade real money would want in my opinion to give you half decent data and tools to work with. Further to that, stock selection, proper position sizing are critical elements of success to the intraday trader. While this could be seen as their "risk management" it is also a setup for failure IMO to not be able to build a winning position or choose an appropriate stock with a good news catalyst. Seeing as they are well placed in search engine results when looking for remote prop trading, i would suspect they do get a high number of applicants who see it as an opportunity and say what the heck to paying $150 bucks to try it out. There is then an argument that can be made that they are trying to generate income from the data fees, and a high volume of applicants. Further to that, there are serious questions if you are trading real $$$ or just a simulator. (might explain why they won't provide first hand level 2 data where you could see their ECNs)

Anyhow, everyone can be their own judge, but this sums up my experience and I hope it can be of some help to anyone researching trading with them.
More...
 
Hey Wonderboy,

I'm sorry that you made that experience with those guys. I have been in contact with them as well when I was looking for a firm and I did not sign up with them since the deal as well as the contract looked really fishy.

When I said I would not work with them, they provided me with the info that they were about to release a new service which was totally right for me and gave me a link to a website that was dead by the time and still is.

The answer to how they are going to make money and why they would accept anyone with a deal you already explained is quite simple, but it took a while until I actually understood it.

They either are a HFT shop or cater to one in terms of payment for orderflow.
In the end, they want you to trade very often but very small so you don't lose much for them. the volume you and others are doing for them is probably necessary for them to reach the next best rebate tier from the exchanges. Because they are not doing enough turnover themselves, they look for guys like you who trade a lot with very little overhead (no lvl2 and data so crappy that you cannot really compete) and do the volume so they can get to 0.0030/share rebate from 0.0023/share rebate on lets say NSDQ. That also might be the reason why they won't give you a LvL2 so you cannot see that you are actually executed by their own algo.

The couple of hundret bucks you lose for them is more than compensated by the additional rebate they receive OR by the 2-4$ they receive per order from large shops like Knight or Citadell.

They don't make money off of Sterling since it costs 150$ everywhere else as well (including LvL1 data), so in my opinion the rebate stuff is the only business model, that makes sense in my book.

It's still ok though. If someone really want's to trade and has no money you can lose a couple of hundret bucks and learn and as soon as you got it, you just quit and open your own account. As soon as you don't want to join another firm, you're ok.

Just don't expect to make it big with them :)
 
WonderBoy81 said:
-They tell you you are trading with real $$$, though I lost more than the "data" fee I paid and was allowed to keep going - seems strange since they appear to take anyone
-Limit orders, 25 min trades/day. 5 min. holding time, are encouraged in the guide they give you - however this was never enforced with me
-Someone said on another thread that they would not meet at an office, but only at a local bar.

How does it add up?
Its a little hard to say exactly, but anyone letting you trade real money would want in my opinion to give you half decent data and tools to work with.
More...

Good post, and very detailed summary.

It seemed from the other thread they were looking to recruit traders and back them with real money. However, their FAQ's states that all trades are initially in SIMULATOR, so I'm not sure when they confirmed (if ever) that you were trading "with real $$$" once you signed up.

Since the guides regarding the limit only orders, 25 min trades/day and "5 minute rule" were never enforced, it seemed like they were being lenient. Also, if they're running a legit prop shop with paid staff/employees, then it's suspicious why they wouldn't have at least a small local office.

I think from your analysis, the firm isn't really interested in recruiting live traders, but rather they are simply collecting a database of traders to possibly use as a future marketing database for expensive education courses.
 
ScalperJoe said:
Good post, and very detailed summary.

It seemed from the other thread they were looking to recruit traders and back them with real money. However, their FAQ's states that all trades are initially in SIMULATOR, so I'm not sure when they confirmed (if ever) that you were trading "with real $$$" once you signed up.

Since the guides regarding the limit only orders, 25 min trades/day and "5 minute rule" were never enforced, it seemed like they were being lenient. Also, if they're running a legit prop shop with paid staff/employees, then it's suspicious why they wouldn't have at least a small local office.

I think from your analysis, the firm isn't really interested in recruiting live traders, but rather they are simply collecting a database of traders to possibly use as a future marketing database for expensive education courses.
More...

A follow up to that, I literally traded with the "simulator" for 2 days, and was told I could go live right away.
 
WonderBoy81 said:
A follow up to that, I literally traded with the "simulator" for 2 days, and was told I could go live right away.
More...

"I was told I could go live right away."

Did you actually go live? Their site has changed, but the FAQ's have remained the same. It still says you have to make 500 trades AND $1,000 during the evaluation phase. It's highly suspect when a firm states they will place you on a $25,000 LIVE account after just TWO days! The FAQ's still make the same contradiction as the former site.

SFG Trading no longer exists! They have changed their name (and web address) to the following:

http://trader2b.com

They have also made the following disclaimer:

"Residents of Québec are not eligible to participate as Trader2B traders."

It makes no reference as to why Quebec residents are excluded. Their platform is now Haywood Trader. There is no information on "Haywood Trader" on any search engine.

There are way too many red flags to consider this as a legitimate opportunity for trading a live account.
 
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MrMuppet said:
It's still ok though. If someone really want's to trade and has no money you can lose a couple of hundret bucks and learn and as soon as you got it, you just quit and open your own account. As soon as you don't want to join another firm, you're ok.

Just don't expect to make it big with them :)
More...

That's a valid point. Since the trader isn't putting up any risk deposit/capital, it's a way to gain experience trading small size with real time data on a simulated platform.

You're right, "don't expect to make it big with them" especially when their FAQ's aren't even clear regarding their live account rules. :)
 
I'm still amazed people still fall for these scams and shady firms and don't just trade with a real, SEC prop firm. But like the saying goes, "a fool and his money....."
 
I checked their web. The cost of per trade is 0.3/100shares. For beginner, it's almost impossible to make money. As an experiences trader, I am only comfortable with 0.1/100shares.
 
It seems "Haywood Trader" is in fact a trading platform:

http://haywoodtrader.com/

Regarding the trading opportunity, the FAQ's suggest the following:

1. The demo trader can lose only $20/day in the first week to start.
2. The demo trader must use 100 share lot sizes.
3. The demo trader must make $1,000 and execute 500 trades during the evaluation period.

The parameters are set for hyper scalping to make quick gains, especially during the first week. If you kill the losses at 5 cents a trade, or $5, it gives you four losses before you're maxed out on the stop. Since you have to make $1,000 AND 500 trades, the minimum gain per trade is $2, or .02 cents on 100 shares (plus account for the commission and ECN fees).

Indeed, a random shot with too many unknown variables and a super low draw allowance to start. Impossible feat? No, however there's limited information on actual LIVE traders and if anyone is to attempt this, you'd want to see if the firm honors its payout schedule. That's the true test, otherwise it's just a training exercise.
 
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