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

Discussion in 'Prop Firms' started by Laissez Faire, Jul 20, 2021.

  1. trade2020

    trade2020

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    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
     
    Last edited: Dec 13, 2022
    #211     Dec 13, 2022
    ZTrader888 and Laissez Faire like this.
  2. ZTrader888

    ZTrader888


    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".
     
    #212     Dec 18, 2022
  3. trade2020

    trade2020

    #213     Dec 18, 2022
  4. Topstep

    Topstep

    I am not sure where they get these $ amounts for funded account activation. The monthly data fee for Rithmic is $116/mo per exchange.
     
    #214     Dec 19, 2022
    legionx likes this.
  5. 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).

    upload_2022-12-23_18-5-29.png
     
    #215     Dec 23, 2022
    murray t turtle and 6wives like this.
  6. Overnight

    Overnight

    That is truly messed up man.
     
    #216     Dec 23, 2022
    Laissez Faire and legionx like this.
  7. BAT31

    BAT31

    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.
     
    #217     Jan 23, 2024
  8. trade2020

    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.







     
    Last edited: Jan 26, 2024
    #218     Jan 26, 2024
    murray t turtle and zdreg like this.
  9. %%
    Good points;
    regulatory risk, you may be right on, but not likely in an election year LOL:D:D
    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:caution:]
     
    #219     Jan 26, 2024