The main reason why doing business with these get-funded programs is a bad idea...

[Pekelo]

So basically you are just whining about a rule you have broke,

He was complaining about a rule that makes no sense. Would you get ride of a very profitable trader who makes you money because of one silly rule breaking? Also, even if you don't want overnight trading, why not just kick every trader out of position at the end of the day? IS automatization so hard for these firms?

The stupid rules are there so nobody stays on the "live" account for too long, because that is the firm's money, aka they are bucketshops.

Glad to inform you about real life.

 

[Pekelo]

I think we actually beat this horse to death about 10 years ago. So for fun and IQ check, let me ask you guys and firms this:

What is or could be the biggest profit opportunity from the Firm's POV? We have talked about this years ago, but lately nobody seems to bring it up. I will answer the question later today, if no correct answer is given.

 

[danielc1]

He was complaining about a rule that makes no sense. Would you get ride of a very profitable trader who makes you money because of one silly rule breaking? Also, even if you don't want overnight trading, why not just kick every trader out of position at the end of the day? IS automatization so hard for these firms?

The stupid rules are there so nobody stays on the "live" account for too long, because that is the firm's money, aka they are bucketshops.

Glad to inform you about real life.

I would get rid of any trader that breaks a rule. They are not really hard to understand. Why there are such rules is not up to me. I have no opinion about the rules. Are they stupid? Maybe. But I think it is very clear that anyone joining such a firm understands that if they break the rule, they are out. Stupid or not. Supportive or not. I personally do not find the rules that difficult to obtain. I have had an account for almost 3 years without ever breaking a rule with TST. And I'm pretty sure I had a live account with them. I also think that there are other firms that works like Laissez is suggesting but that is not my experience.

 

[ph1l]

What is or could be the biggest profit opportunity from the Firm's POV?

Is it "profitable unprofitable trader makes himself and the firm money by trading the firm's capital paying to use a demo account?"

 

[Laissez Faire]

...but it's also true that this company practices a 2 strikes and you're out policy with regards to breaking rules. As such, I took a calculated risk on holding an unrealized loss (but still well within daily loss limits) through the electronic close and overnight. Prior to that I sent them an email asking for permission, but admittedly received the answer too late. I figured I would survive with a warning.

16 hours after I broke this rule as my account and position was profitable and my account had hit $7K of profits my account was liquidated. They did this on their own discretion; not an auto-liquidate upon rule break.

Not that it matters at this point, but what may not have been clear in this post was that the answer I received from customer service was this:

"Feel free to trade the way you want."

I did get this answer a few hours AFTER the electronic close having already broken the rule, but with that answer and the position not liquidated I figured that everything was okay and kept monitoring the trade for the next 13 hours or so with a hard stop in the market.

It was only 16 hours later that my account peaked around 7K and my account was suddenly liquidated. Obviously not an auto-liquidate (which there should have been at the electronc close if they really cared about that), but a conscious decision to boot me as I was becoming a potential liability. LOL.

If I hit a daily loss limit or weekly loss limit it would not be anything worthwhile arguing about and probably this isn't either. I just think it shows that they're really not interested in a trader making money because if they were - they would have given me a warning.

They also admitted to mixing up my account with someone else through customer service. A guy who allegedly had 2 prior rule breaks and only got booted on the 3rd rule break. So...it's clear that they use some discretion here...

 

[Pekelo]

I would get rid of any trader that breaks a rule.

They could do it a more trader-friendly way, fine them. At least for the first offense. If I am a trader I would rather pay a fine, then being kicked out and start from scratch again. That takes time and time is money. Even if the fine equals the new Combine, at least I don't lose 2-3 weeks.

But again, in today's world not having automatized the everybody moves to cash at the end of the day rule is simply unforgiven. So they are either incredibly stupid or they have a more sinister reason for the rule.

Hell, they could do BOTH, automatize it AND fine the trader. Best of both world! If you are not in cash 5 minutes before close, your trade is closed for you, and you are fined for X amount. That makes extra money for the firm and teaches the trader a lesson.

Just curious, why did you leave them after 3 years?

 

[Laissez Faire]

Is it "profitable unprofitable trader makes himself and the firm money by trading the firm's capital paying to use a demo account?"
View attachment 265488

Just took a quick look at the social dashboard. Here's what they want:

 

[traderjo]

Well, the first thing that you have to keep in mind is that I have already received 50% of the entry fees bypassing these combines from these two different companies. So in that sense, I am halfway there right off the bat.

I have already broken even and beyond in four of the accounts, with one of them still relatively new. It should be noted that I am relatively conservative with my risk parameters, and I am not wasting my time with the two step process that some of these firms asked. (Anytime I see a two-step process, I recognize that it is to attract high leveraged gamblers.)

I recognize that some companies claim that the funded trader is trading a real account, and that some also say that you are trading a demo account that is attached to a real account, but those are both lies. You can do a trick with naming the server for MT4/5 to show as being live when it actually is not. There are videos about this on YouTube.

The question about whether or not it bothers me if and where the money comes from, let me ask you this: "When you trade at any broker, where does your money come from?" It comes from the losing traders. Essentially, these "firms" are acting as brokers if you think about it in that sense. If five of you join one of these firms and lose $500 this month, the firm will not be overly concerned about paying me $400. In that scenario, they come out ahead $2100. If we did the same thing at FXCM, I would still be taking my profit, and you would still be losing $2100. The unethical part about this business is that they advertise it to be something that it is not. Honestly, it is what used to be known as an arcade, which I think was mentioned somewhere in this thread. There is nothing wrong with an arcade, as long as the house plays honestly.

The question about whether or not it bothers me if and where the money comes from, let me ask you this: I read your reasoning but it is not apples to apples, in case of OTC FX or even Exchange traded Futures all those participate are aware of the fact that for every winner there is a looser a zero sum game
Where as in this business model the so called company is hiding the fact that they pay the winners from the fees collected + the main aim is to put people on hamster wheel for repeat tests. That is if what you are syaing is true
becasue to be fair there could be two types of companies one less ethical than others!
1) Make money by test fees + pay winners from test fees revenue and pretend that there isa real funded account
2) Make money by test fees + do offer a real account
3) No BS about test etc purely fund traders on track record and performance

By the way I thought definition of arcade is simply leveraged funding + connectivity/ technology based on pure first loss so again a different model no pretend of funding for talent and masses etc

Any way just becasue you are good at trading and got through does not make the above model 1 and 2 ethical

 

[traderjo]

Wow. Are you 100% sure about this?

I think LeeLoo is upfront about the initial account being simulator only and I think OneUp / MES, too. But I think MES says you'll be trading a live account eventually.

TopStep on the other hand seems to be clear about how you're actually trading a live account once funded.



I had the exact same reasoning initially and figured it didn't matter as long as I got paid, but when you realize that the company loses money from you winning and potentially a big loss if you do well - I realize it matters a lot.

In fact, it's probably the main reason MES liquidated my account. I'm 99 % certain that if I were in drawdown they would have given me a warning, but as I was closing in on payday they had a chance to liquidate me.

I also saw your post about having multiple accounts using low leverage. Well, to me that kind of defeats the purpose of getting funded. Might as well trade micros then.

"..... but when you realize that the company loses money from you winning and potentially a big loss if you do well - I realize it matters a lot. 100% agree

 

[Pekelo]

What is or could be the biggest profit opportunity from the Firm's POV?

I am sure you guys thought very hard, but no winners.

The correct answer is: Piggyback with huge leverage.

First of all, you don't need 50-200 traders, you only need 4-5 who trade uncorrelated markets. Second, they can afford to pay his winnings from the firm's money because they are making 10, 20 or 50 times more.

Anyhow, I won't describe the whole scheme in details in case they actually haven't thought of this...