Forex Prop Firms Disappearing

Trading Discussion Prop Firms
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It’s no secret that a lot of forex prop firms are still (August 2024) going under, fairly regularly.

Note that this is just forex prop firms, not the futures ones, which have a very different and far safer, more reliable and more honest business model.

FunderPro claims that more than 50 forex prop firms have disappeared so far in 2024 alone (and of course many went under in late 2023).

The CEO of FunderPro, Alex Zanutto, is far from alone in believing that the traditional forex prop-firm trading model is fundamentally flawed and unsustainable. Most of these firms work on a “virtual” (i.e. fake) trading system in which their funded traders’ so-called “trades” never actually reach any real market and therefore generate no actual profits. They have that in common with most spot/CFD “brokers”, of course - especially the unregulated and offshore-regulated ones.

These firms (especially the ones using MetaTrader) can also potentially manipulate markets to make traders fail challenges (e.g. by using the MT Dealer Plug-in).

Payouts come solely from challenge purchase fees, not from real trading profits.

Again, note that these are forex prop-firm/funding company firms, not the futures ones, which are very different indeed, and generally incentivized for their customers to win, not to lose (it’s basically the same thing as the difference between spot-forex “brokers” and futures brokers).

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One by one walks out from business. It’s expected. Just be careful to join them … :slight_smile:

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I’m very curious about prop firms :thinking: but at the same time, I’ve always been very wary of them. :open_mouth: I know it’s been a great experience for some so I’m curious to know what they think about this. :open_mouth:

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I think that’s right.

But they may be the ones “making the noise” (i.e. being publicized, being promoted, making videos, doing stuff on Youtube, and so on)? And the majority of people who were less successful might be something of a “silent majority”?

Hard to know, isn’t it?

But in that sense, I guess you could say that trading’s no different from anything else, in that the great majority of “new businesses” of all kinds fail anyway? And it’s not as if people trading their own accounts (rather than a “funded” one) have much of a success-record anyway?

So it all depends how you look at it, really, and what you’re comparing it with?

I certainly don’t think anyone should criticize you for “being wary of them”, though! :slight_smile:

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That’s also true. :thinking: I think I’ve seen a lot of success stories on Tiktok and other platforms, but it’s hard to know if it’s legit or just a marketing scheme. :open_mouth: But thanks for this interesting article Hetero! I had no idea that this has been going on., :open_mouth:

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better to stay away from them. when the conditions looks too good than better to leave it to other people