It's an opportunity for someone who doesn't want to put up the margin. As I explained previously, a cushion of $5,000 to trade 15 contracts is a lot less than putting up $15,000 in your own account.
The main reason why doing business with these get-funded programs is a bad idea...
- Thread starter Laissez Faire
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It's an opportunity for someone who doesn't want to put up the margin. As I explained previously, a cushion of $5,000 to trade 15 contracts is a lot less than putting up $15,000 in your own account.
You won't be able to trade 15 contracts with the cushion of $5000K.
Didn't you see the scaling plan I posted?
To trade 15 contracts with OneUp/MES - you need 12K in your funded account. And if your first 15 contract trade is a loss - you're back to 10 or 8 lots depending on how much you lost.
So, effectively, you need to generate 9 + 12 = 21K of profits in order to be allowed to trade 15 contracts.
Trading on max margin is for most people an invitation to failure, but if you really want to trade 15 contracts, you only need to put up $7500 at AMP or Ninja.
If someone is living in the third world and have no other means of saving up money for an account I can see the opportunity - but I fail to see how this is a great opportunity for anyone who'd be able to put up $5K to trade their own account.
I see your point. Well I guess it comes down to a personal preference. If you're able to accumulate the $12,000 to trade 15 lots, perhaps it's worth it.
Omg
What are you doing on a forum about trading?
The market is basically made to make a transaction between two parties. There is nothing unethical about it. And both parties could make money on their actions. A trader provides liquidity and carries the unknown short risks within to create a stable market.
OMG, will you shut that piehole? Your statement applies to ALL FOR-PROFIT BUSINESS EVERYWHERE, not just trading.
@ZTrader888 ...
"...If you're able to accumulate the $12,000 to trade 15 lots, perhaps it's worth it..."
Trading 15 lots of any futures instrument with 12K in the account is total financial suicide. Don't even think for a moment that it should be attempted. (Yes, that includes the micros).
Prop firms, are ya' hearing me?!? Stop offering your clients financial suicide, but rather financial success. I will NEVER understand why you want your clients to fail and invite them to do so in the most gruesome way possible, which is over-levering with an inadequate account to cover bond requirements with a "drawdown" that would never, EVER apply in the real world of trading futures.
I'm probably repeating myself or beating a dead horse at this point, but I just don't see it being worthwhile as a viable alternative for actual funding. If they actually gave you a $150K account to trade and you could trade 15 lots and still be within their daily risk parameters it would be great. But for most people taking on 15 lots within their risk parameters they're usually one or two bad trades from blowing up.
However, for a new trader it could save him a lot of money to try a few rounds with these programs/companies instead of risking their own $$$ in the market. It's something which would have saved myself a lot of $$$ as I've traded live pre-maturely many times in the past being impatient to get started. Then again, with the new e-micros, it may be just as good to stick with them as a training vehicle instead.
I'm not sure if there exist any serious options for getting funded or accessing more capital for a retail trader, but I briefly talked with another company I was recommended to check out and they do offer something, but also require you to put up your own capital. So not sure it's worthwhile in the end.
I understand your rationale and I agree with you for the most part. But if a trader made it to $12,000 with their strategy using the scaling plan, what's to say they couldn't continue? It may be improbable, but not impossible. It is about proportionality. If you can trade 5 lots with their $4,000 cushion successfully, why not any multiple of that (disregarding fills, of course)?
I'm not defending or endorsing these companies. I just think that for some traders the plan might work. I wouldn't discount all these programs out of hand just because someone doesn't like their rules.
It comes down to a plan. I don't think a new, inexperienced trader should waste their money on one of these programs. However, if a trader has a trading plan that they have confidence in through their first-hand work and experience, then why not? And I know the retort of "why not trade your own account". But that's not the point. The point is if a trader has a plan, can live with the rules, and can control their risk management within the terms and conditions of the company, then working with one of these firms could be a benefit.
In other words, I don't think it's all bad and stacked against a trader. It is stacked against anyone who doesn't know how to trade.