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

after all, they are a for-profit company. and if one accepts the rules then there is no way one can complain..., sure one can criticize the rules or compare the rules between diff companies .
Issue here though is " are they really pure Prop trading firms? time and again it is shown by various people that the real motive is something else... and that mean perhaps unfair rules/ misleading marketing or something as simple as "repeated discount marketing"
 
Laissez Faire said:
...is that they're not really interested in funding and cultivating successful traders.

I'm convinced that having to deal with funding a trader is more of a nuisance to them than something they actually want. The proof is in the pudding.

When these programs were initially launched years back the parameters for completing an evaluation were rather unrealistic and it was very clear that they made money simply by selling subscription fees. Fast forward today I'd say the rules for many of these programs are realistic as long as you don't use too much leverage.

Still, by design, there are so many rules and restrictions which makes it very clear that they don't really want a trader to succeed long term or in their live accounts. Especially as some of these companies have one set of rules for the evaluation phase and another for the live account as you get funded.

One example is the new EOD drawdown rule which Earn2Trade is promoting these days which it turns out only applies for the evaluation phase and NOT the live account. How does this help someone who wants to trade a live account? You managed to pass the evaluation, but now there's a new set of more difficult rules as soon as you're 'funded'.

Then you have OneUp which also have much more restrictions as soon as you're trading a 'live' account.

Also, as soon as you withdraw profits - you're back to square one in terms of buying power and drawdown. You're always risking your own 'profits'. Never the firms. As far as I know you will never at any point be backed by the firm. It's always your own profits which are at risk.

Add to that all the smoke an mirrors in their advertisements. For one - you're certainly not trading a 150K account. You're trading a 5K account at best - as that's the drawdown limit and buying power you have.

At the end of the day - do these companies pay you profits?

Yes, I think so. And it would be unwise to not do so. However, I'm convinced that they don't really want to do that and far more prefer to collect risk-free subscription fees which ideally you give them on a monthly basis as you try again and again and again. I've read reports of guys that have spent thousands on these fees trying to get funded.

Can these firms serve a purpose?

Probably. For an intermediate trader it could be beneficial as it could be considered a more serious simulator training practicing risk management and with the possible upside of gaining a live account and pulling some money out of it to fund his own account. At worst - your risk or loss is capped at $200-300 per month. How many traders lost far more than that with their live accounts they opened prematurely?

It could also be something to consider if a trader is in a situation where he doesn't want to play with his own risk capital and still want to stay in the game somehow and practice his skill a bit more serious than in a mere simulator.

Make no mistake though. I have zero reason to believe the actually want to fund a successful trader long term.

If anyone thinks or knows otherwise. Please let me know.
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Great post also the business model is based around 92% failing and charging a premium to take the challenge. That is their main source of revenue it seems not the profitable traders
 
Yeah--if too many people become profitable they probably change rules, trading times, trading parameters - etc.

Also remember that once you have a funded account - their risk is only the max loss/trailing drawdown. For example if that number was $4500--once you have made $4500 in profits they delete the funding and now your only funding is your own profits and now--if you continue trading you are paying them 20% of your future profits of trading 100% your own money. They no longer provide funding (or at least that is my interpretation and opinion of the net outcome of their rule--I could be wrong but that is what it appears to be to me)

So in essence you are taking a challenge (or multiple challenges and possibly resets) to end up with what is essentially a one time funding of "X" and thats it

LuckyMac said:
Great post also the business model is based around 92% failing and charging a premium to take the challenge. That is their main source of revenue it seems not the profitable traders
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Laissez Faire said:
Sharing this relevant piece of information that was posted in another thread:

Is Funding Talent a SCAM ?!

https://www.forexpeacearmy.com/community/threads/funding-talent-prop-firm-scam.70762/

Obviously, these companies will do what they can to make you fail if they have to pay out your simulator profits.

That there are people on this thread which are still thinking this is a great opportunity beats me.
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I have a different take on this, as I am funded in several accounts. It is a decent opportunity, but only if you are realistic about it. See, I make about 350USD per account at the moment, gradually building up each month. When you do that in like 4 or 5 accounts, its a nice part time gig. Can I live on it? Of course not, but its another income doing what I want to do. (I would also be remiss if I didn't mention that I am an analyst for several firms/websites - so I am watching the markets all the time anyway, so my experience is different than most.)

That being said, I am going to eventually have something like ten accounts. This keeps me from being more than an irritant to these arcades, not a massive liability. I tend to look at it through the prism of longer-term work.

Looking out far into the future, I suspect a lot of these places will have regulators to deal with eventually, so I have no idea how long this game can last, but clearly none of them are trading real money at this point.

I suspect if I were to suddenly make 100k in a month, there would be issues. It's about knowing the game you are playing, and figuring out how to exploit said game.
 
clockwork71 said:
I have a different take on this, as I am funded in several accounts. It is a decent opportunity, but only if you are realistic about it. See, I make about 350USD per account at the moment, gradually building up each month. When you do that in like 4 or 5 accounts, its a nice part time gig. Can I live on it? Of course not, but its another income doing what I want to do. (I would also be remiss if I didn't mention that I am an analyst for several firms/websites - so I am watching the markets all the time anyway, so my experience is different than most.)

That being said, I am going to eventually have something like ten accounts. This keeps me from being more than an irritant to these arcades, not a massive liability. I tend to look at it through the prism of longer-term work.

Looking out far into the future, I suspect a lot of these places will have regulators to deal with eventually, so I have no idea how long this game can last, but clearly none of them are trading real money at this point.

I suspect if I were to suddenly make 100k in a month, there would be issues. It's about knowing the game you are playing, and figuring out how to exploit said game.
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Good for you that you area good trader,, and get funded at 4-5 places,, can I ask what was your break evan in terms of money paid for tests !
also when you say "but clearly none of them are trading real money at this point. If what you say is correct then where is the money coming from to pay successful traders like yours? sure as an individual you might say it does not bother you but do you think that is sustainable? by the way some companies claim that when funded the trader is trading real account, some say ( FTMO) that funded trader still trades sim and somehow they link that to their real a/c!
any how I agree that regulators will have to start looking at it sooner the better !
 
traderjo said:
Good for you that you area good trader,, and get funded at 4-5 places,, can I ask what was your break evan in terms of money paid for tests !
also when you say "but clearly none of them are trading real money at this point. If what you say is correct then where is the money coming from to pay successful traders like yours? sure as an individual you might say it does not bother you but do you think that is sustainable? by the way some companies claim that when funded the trader is trading real account, some say ( FTMO) that funded trader still trades sim and somehow they link that to their real a/c!
any how I agree that regulators will have to start looking at it sooner the better !
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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.
 
clockwork71 said:
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.
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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.

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.
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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. :)
 
Laissez Faire said:
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. :)
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I trade low leverage because this is a second job for me. It's going to last for years at this rate. Also, I have software that executes on multiple accounts at one time, so I will get to ten accounts, and reevaluate. 1% of "1 million dollars" is easier than 40% on a 25k account.

As far as OneUp, I was once funded with them. (I don't trade futures that much to be honest.) Try putting an order in somewhere away from current pricing on a 'live account.' It won't register in the DOM.

In the end, you are talking about the scammers in the futures world, I am talking about the nonsense in the FX world. Different businesses, same grime.
 
Laissez Faire said:
my account was liquidated on the grounds that I held a position overnight.
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I agree with OP and with you, the traders are most likely on sim even in "live" trading. When years ago similar thing happened at TST, I immediately called them out, if you are for the traders, why not implement a move to cash robot 5 minutes before the close? If your trader is making you and for himself money, why would you get ride of him, unless it is actually not real money, but the firms???

Nowadays, when there is Robinhood and micro futures widely available, there is absolutely no reason to use these talent firms.

They are modern day bucketshop, that is all.
 
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