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

[trade2020]

That's a huge difference, IMO.

Actually, it would be interesting to know how many of the subscribers at @Topstep and similar firms know up front that the only funding they ever get (at best) is $5K. I'm not sure many knows that.

Can still be a good deal if you know how to trade, but lack funds, though.

As you've shown, there seems to be better firms, though. Only problem from my POV with the firms you mentioned is that they offer CFDs for the indexes and I have no experience with that. So, for me, might not be suitable.

-------------------------------

Maybe.

But the fact that the FX firms mentioned by @trade2020 allows you to withdraw your full profit and still have the "initial funding" provided should be the same for both type of firms.

Also keep in mind that FTMO allows you to pass multiple challenges and either have multiple live accounts or they allow you to combine all the funded accounts into 1 large account (max at this time $400,000) which
would then have a max total drawdown of $40,000 - meaning if you withdrew all profits to zero every available pay period you would still have the same starting $40,000 in risk funding from FTMO

that’s quite a difference:
$5,000 one time funding VS $40,000 recurring funding

Imagine if 2 competing credit card companies offered for your business

one credit card company says for a fee of "x" if you qualify we'll give you a credit line of $5,000 and after you charge $5,000 and pay it back to $0 balance we will then take away your credit line

Versus

the other credit card company that says for a fee of "x" if you qualify we'll give you a credit line of $5,000 and after you charge $5,000 and pay it back to $0 you will still have your $5,000 line of credit to charge again and repeat the process as many times as you wish as long as you stay within our rules

So the "recurring funding" whether it is $5,000 or $40,000 as compared to "one time" funding is a big deal and big difference

 

[ZTrader888]

-------------------------------




Also keep in mind that FTMO allows you to pass multiple challenges and either have multiple live accounts or they allow you to combine all the funded accounts into 1 large account (max at this time $400,000) which
would then have a max total drawdown of $40,000 - meaning if you withdrew all profits to zero every available pay period you would still have the same starting $40,000 in risk funding from FTMO

that’s quite a difference:
$5,000 one time funding VS $40,000 recurring funding

Imagine if 2 competing credit card companies offered for your business

one credit card company says for a fee of "x" if you qualify we'll give you a credit line of $5,000 and after you charge $5,000 and pay it back to $0 balance we will then take away your credit line

Versus

the other credit card company that says for a fee of "x" if you qualify we'll give you a credit line of $5,000 and after you charge $5,000 and pay it back to $0 you will still have your $5,000 line of credit to charge again and repeat the process as many times as you wish as long as you stay within our rules

So the "recurring funding" whether it is $5,000 or $40,000 as compared to "one time" funding is a big deal and big difference

Does FTMO have an activation fee? Some of these firms have huge activation fees - APEX charges $300 for a $250K account. You can buy up to 20 accounts. That means you would have to pay $6,000 just to activate the funded account once you pass the evaluation. No one seems to want to address this "problem".

 

[trade2020]

FTMO--No activation fee to activate a funded account after passing challenge and verification to my knowledge https://ftmo.com/en/faq/are-the-fees-recurrent/

 

[Topstep]

Does FTMO have an activation fee? Some of these firms have huge activation fees - APEX charges $300 for a $250K account. You can buy up to 20 accounts. That means you would have to pay $6,000 just to activate the funded account once you pass the evaluation. No one seems to want to address this "problem".

I am not sure where they get these $ amounts for funded account activation. The monthly data fee for Rithmic is $116/mo per exchange.

 

[Laissez Faire]

As I found myself in a life situation where I didn't want to risk my own capital, but at the same time wanted to stay in the game and practice, I decided to actually try my luck with OneUp / MES Capital a few weeks ago.

So, my day job got really crazy at the end of this year and I decided to pull the plug on my own live account wise from earlier negative experiences juggling day trading and a demanding day-to-day work situation. As I wanted to stay in the game and practice I decided to take on a 150K program with E2T for a discount ($175) and give it my best shot with 1-2 hours per day.

It went reasonably well and I traded mostly 1-3 contracts on \ES. Hit the target on day 11, but just kept going. Unbelievably, I actually did a fat finger trade on my last trade/trading day which I didn't even need to take. Suddenly, I was holding 10 simulator ES contracts and the market spiked against me quickly by 6 points. I tried to flatten the trade, but I was too late.

The trade closed out for a profit and my "account" at a equity high, but technically I exceeded my daily loss limit ($3.3K) on that last trade on unrealized P&L. So, I failed the program by that last trade alone.

I don't think I'll be signing up again and will be focusing on trading my own money come 2023.

I recognize these programs for what they are. An opportunity to get $3.3/$4.5K in margin. That's all they're ever giving you and they would prefer not to as their business model really is geared towards collecting fees and resets, not funding traders with actual money (some of the firms won't even give you a real live account).

 

[Overnight]

...

The trade closed out for a profit and my "account" at a equity high, but technically I exceeded my daily loss limit ($3.3K) on that last trade on unrealized P&L. So, I failed the program by that last trade alone...

That is truly messed up man.

 

[BAT31]

...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.

If you posted this on Reddit or Twitter, the downvotes would exceptionally exceed the upvotes.

It's is my firm belief that these funded trader programs are one big money grab. And in the social-media era, their influence will only grow.

I won't hide my bias-- I hate these programs. However, I can't blame them. If scores of people want to through their money at them, because they want to trade for a living, and they want to do it NOW, then I say let the free market run its course.

With the amount that traders pay in subscription and challenge fees, it's puzzling that they won't simply save their money, practice for a few years, and trade their own money.

 

[trade2020]

I recognize these programs for what they are. An opportunity to get $3.3/$4.5K in margin.

For example a $200k challenge from someone like FTMO was around $1150. For that you are getting $10,000 daily loss limit and $20,000 total loss limit

If we just go by daily loss limit only $1150 into $10,000 works out to be approximately 1/8
(Of course that assumes you don’t fail before being funded and have to pay another challenge fee for the opportunity to pass and get the $10,000 daily loss limit and $20,000 total loss limit)

Then there is the uncertainty factor (even if you do pass and get “funded”) — will regulators pass new laws to effectively get rid of the firm and their ability to keep providing you with an account, also as we have seen recently there is also a risk that the funding firm may just stop doing business in certain countries as with the case with FTMO banning US. Additionally, there is the uncertainty factor that the firm will "change the rules to your detriment on the fly"--there is always the looming possibility that even if you get a funded account and are trading profitably that the "funding firm" will change their rules giving them more discretion (grey area--in their opinion type rules instead of hard black and white rules) to say that you violated a rule to fail your funded account, or make it harder to withdraw funds or do any other number of changes and tweaks to your detriment----whereas if you just open a regular trading account with your own money and a reputable real broker then typically at most they only changes will be margin requirement changes due to increased market volatility which would temporaily decrease (with futures) the #of contracts that you can trade with your account balance.

Additionally there is also the fact that payouts are “staggered” on purpose—- meaning you can’t withdraw your profits daily and in most cases can only withdraw twice a month (every 2 weeks).
The reason for this is simple— they know there is a good chance you will lose profits over 2 weeks due to overtrading , or you may fail and violate a rule or loss limit. Since the firms are paying you profits on “virtual trades” and those profits have to come from the pool of money from “losing accounts” it is better for them to stagger/delay your ability to withdraw as the odds are in their favor that you will screw up within that timeframe—-as opposed to allowing you to withdraw every day which would put them in a position where they may not be able to pay (again because even on “funded” accounts these are not real trades made with real money and real profits that they simply get a % off and are instead —-in most cases— virtual trades that the only money that they can pay you with is the pool of money from people who fail challenges).

So in the end what are these firms good for--if anything--?

Well, if profit withdrawls could be 100% of your profits daily (minus their % cut) and you were allowed to withdraw daily then I could see some benefit- as at least that aspect of it would mirror a regular trading account and you would be trading with their money as opposed to risking your own. However--that day (that they will allow you to withdraw all profits daily) will never come because of their core business model

How about from the aspect of using the challenges to improve your skills? This one is debatable. On the one hand if you put $20,000 of your own money in a brokerage account and proceed to lose that $20,000 over the next 30 days--well - you are out $20,000. If on the other hand you pay them $1150 to $1200 to take a $200K challenge that has a daily loss limit of $10K and total loss limit of $20K) and fail in 30 days because you lost either $10,000 in 1 session or lost $20,000 total (for example you lost $1,000 a day for 20 days and violated $20k total loss limit but never violated $10K daily loss limit) then you are out only the $1150-$1200. So you could argue that if you cant pass one of these things paying $1200 then you shouldnt open an account with $20,000 of your own money as you willl likely lose it all and instead of you losing $20,000 to find out you cant trade --it only cost you $1200.

So, my day job got really crazy at the end of this year and I decided to pull the plug on my own live account wise from earlier negative experiences juggling day trading and a demanding day-to-day work situation. As I wanted to stay in the game and practice I decided to take on a 150K program with E2T for a discount ($175) and give it my best shot with 1-2 hours per day.

It went reasonably well and I traded mostly 1-3 contracts on \ES. Hit the target on day 11, but just kept going. Unbelievably, I actually did a fat finger trade on my last trade/trading day which I didn't even need to take. Suddenly, I was holding 10 simulator ES contracts and the market spiked against me quickly by 6 points. I tried to flatten the trade, but I was too late.

The trade closed out for a profit and my "account" at a equity high, but technically I exceeded my daily loss limit ($3.3K) on that last trade on unrealized P&L. So, I failed the program by that last trade alone.

I don't think I'll be signing up again and will be focusing on trading my own money come 2023.

I recognize these programs for what they are. An opportunity to get $3.3/$4.5K in margin. That's all they're ever giving you and they would prefer not to as their business model really is geared towards collecting fees and resets, not funding traders with actual money (some of the firms won't even give you a real live account).

View attachment 302312

 

[murray t turtle]

I recognize these programs for what they are. An opportunity to get $3.3/$4.5K in margin.



For example a $200k challenge from someone like FTMO was around $1150. For that you are getting $10,000 daily loss limit and $20,000 total loss limit

if we just go by daily loss limit only $1150 into $10,000 works out to be approximately 1/8
(Of course that assumes you don’t fail before being funded and have to pay another challenge fee for the opportunity to pass and get the $10,000 daily loss limit and $20,000 total loss limit

Then there is the uncertainty factor (even if you do pass and get “funded”— will regulators pass new laws to effectively get rid of the firm and their ability to keep providing you with an account, also as we have seen recently there is also a risk that the funding firm may just stop doing business in certain countries as with the case with FTMO banning US.

Additionally there is also the fact that payouts are “staggered” on purpose—- meaning you can’t with draw your profits daily and in most cases can only withdraw twice a month (every 2 weeks)
The reason for this is simple— they know there is a good chance you will lose profits over 2 weeks due to overtrading , or you may fail and violate a rule or loss limit. Since the forms are paying you profits on “virtual trades” and those profits have to come from the pool of money from “losing accounts” it is better for them to stagger/delay your ability to withdraw as the odds are in their favor that you will screw up within that timeframe—-as opposed to allowing you to withdraw every day which would put them in a position where they may not be able to pay (again because even on “funded” accounts these are not real trades made with real money and real profits that they simply get a % off and are instead —-in most cases— virtual trades that the only money that they can pay you with is the pool of money from people who fail challenges

I recognize these programs for what they are. An opportunity to get $3.3/$4.5K in margin.

%%
Good points;
regulatory risk, you may be right on, but not likely in an election year LOL
CAN learn some stuff from them; even if dont trade with them; Bright Daytrading Co pays 2 times per month.
HOLD Bros has some good stuff on thier website;
not that i would have inspected thier office before they actually moved in World Trade Tower movs was real late \SEPT 17,2001.so thy were blessed with delays. SEPT 11kept thm out of the wrong location.
[Edit almost no pays daily except some day labors co, metals dealer + copper is a 5 day hold ,even though they may not hold you to that if they know you]