A proper prop firm will not have a "live trailing drawdown" that is calculated from an intraday equity high.
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Trading system returns versus starting a lawn mowing company
- Thread starter wxytrader
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A proper prop firm will not have a "live trailing drawdown" that is calculated from an intraday equity high.
You are right, kicking you out with just a 5% drawdown is like having only that 5% to work with, you are better trading on your own with that 5%.
In one of your threads, you mentioned you were in a prop firm trading their money. Out of curiosity, I looked into them. Using back of the envelop it seemed to me they mostly make their money recruiting new traders, charged them subscriptions, run a test...
I don't think there are enough successful traders to give them enough profit sharing to make it a good business model without subscriptions? Also, if I were that successful, I quit and trade on my own and they constantly lose the very best.
Prop firms have been around forever. Most of this crop of online sim props are set up to generate repeated failures and the need to resub or whatever. A big reason they succeed is because consumers see the "$50K account" and focus on that rather than the real number which is the drawdown.
Find a prop firm with an end of day drawdown and then trade the drawdown, understanding that it is really just a "kill switch."
Trade that $2K drawdown like it is $2K.
I see these idiots on youtube telling people to risk no more than 1% per trade, and then calculate that on the $50K "balance" and disregard the $2k drawdown.
Trade the drawdown, not the balance. On ES, use a 4 point stop (10 trades) or $250 stop (8 trades). If you lose 8 or 10 trades in a row, you shouldn't be trading anyway.
If I were an brokeass failed trader, I'd start a prop firm. Easy money.
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why bet on success when you can make 10 times as much betting on losers......?
Lambo in limbo, wxy?
You're not even in the same universe as my point or conversation. What does proper even matter? You have the rules and the reputable ones do pay out. What does the money they pay out spend differently than a "proper" one? My point is just about ignorance. People claim to win most days, claim they are great traders, than say how hard live trailing draw down is.
Do you comprehend that is LITERALLY a mathematically incorrect statement? You can say you don't like the online prop firms, you don't need, you don't want to use them. But there is no way you win most days and are a good trader and cannot pass them (of course unless you need account size, time or natural bullish bias of major equities to turn a profit) than OF COURSE you wont pass it. Because you don't actually have trading skills that allow you to trade in all market environments.
You can have 1250 points of risk capital for an MNQ contract. Live trailing or not is irrelevant, particularly for ones that claim they win almost every single day. So what you're going to be up 50-100 points every day, let it come back against you and not take profits? for 12 to 24 days in a row? After claiming you win almost everyday? It makes no logical sense at all. It's just so dumb people repeating things they hear, what's the point?
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How can you guys STILL BE DISCUSSING THE ONLINE PROP FIRMS HAHAHAHAHAHA
EVERYONE (apparently not) knows that they make the lions share of their income via people failing the test. It's like me saying the sky is blue, than starting a conversation about it. Holy smokes, it's truly unbelievable sometimes.
EVERYONE (apparently not) knows that they make the lions share of their income via people failing the test. It's like me saying the sky is blue, than starting a conversation about it. Holy smokes, it's truly unbelievable sometimes.
A proper prop firm is one in which the interests of the firm and the interests of the trader are aligned.
An intraday trailing drawdown is in the interests only of the firm.
No one trades his own account on the basis of an intraday trailing drawdown. It's a gimmick that in fact encourages poor trading habits and is designed to generate new subscription fees.
FWIW, I traded in a stock prop firm for years before turning to futures and self-funding. As I said above "the current crop of online prop firms are really just sim account subscription fee mills" or something like that.
But a proper prop firm, that is one in which the trader's parameters are set such that the interests of the firm and the trader are ... wait for it ... properly aligned (of which there is probably only one in the online space) would be a gift for any underfunded newb (or any elitetrader who's been struggling for a decade or more) and has with dollar signs in his eyes and Lucy in the sky with diamonds.
The real question is WTF triggered you?
The macro of people being intellectually dishonest or at best not genuine on this forum is what has me triggered. It's not a single event I gave the most charitable leeway one can reasonably expect another to give. The more I progress in trading and the better I do, the more I realize how many people on here are either lying, have no clue what they are talking about or worst being intentionally misleading.
A "proper firm" is inline because both parties can make money and profit from the venture. AKA it's a mutually beneficial relationship with as close to equal value for both parties as possible.
Just because most people fail the prop firms, doesn't mean someone who can trade doesn't align with them? Certainly you understand this right?
Let me explain it even more clearly. If so many traders didn't fail and pay the fee's than the few traders that can actually trade wouldn't have the opportunity to make money because the firm wouldn't have the funds to pay them.
Do you see? So sure for some people you're correct, but for others you're not because you just made a broad sweeping statement based upon your viewpoint. There's billions of people on this earth and for some people the online prop firm absolutely 100% aligns with them. Again because they know the rules and they why they are getting paid, both from understanding how the markets work, but also understanding the tool they are using (the online prop firms) work.