Hey everyone, not wanting to spam or suggest anything, I wanted to ask if any of you has taken the so-called Funded Account Challenge some brokers offer?
Is it a scam or it’s actually a good deal?
Thanks!
Yes, I took the CTI funded account challenge last year and blew my evaluation account over several months. The issue is that I had to gain $300 before I lost $200 - but given a year to complete it with a minimum of 30 days trading .There are also max daily drawdown levels and max daily risk outlay.
Sounds easy, but the reality is not. An annual return of 50% profit would see pro traders breaking your arm off to learn how you achieved it. An APR of 25% is considered outstanding.
So you have to take a greater risk and gamble, possibly with a martingale approach - which I don’t recommend, as you would eventually blow your account. Many people could achieve the target, though there is a question mark whether they can be consistently profitable in the long term.
However, for the £200 sterling outlay for a $5k account, it seems attractive if you could afford to lose the dosh. The reality is from day one, you’re trading a $200 account, not $5k. On the plus side, this funded challenge was on a live account, albeit the spreads were average at best and the broker also charged commission per trade.
Finally, IMO, it is not a scam because you could succeed, but nor is it a very good deal.
I saw this article and figured it could be a good way to try a new strategy?
If i understand correctly, once you deposit and pass the challenge, you get your money back and trade with the broker’s money so there’s absolutely no risk. Anything i’m missing?
They are not a scam but are deliberately harder than they need to be considering the rules you must trade under once you pass. Some like FTMO will give you a free retry if you fail on profit % gain but stick to risk parameters but often people get the profit at the expense of the risk so no freebie for them! It’s a short to medium term game if you can pass to fill your boots in a personal account and then trade with your own rules and keep it all.
I recently opened an FTMO challenge! (haven’t traded it yet)
I don’t think these funded accounts are scams, but the rules constrict your actions.
As per steve369, you are not trading, for example a 100K account.
If the stipulations are that you cannot lose more than 10K, then to all intents and purposes, you are trading a 10K account, not 100K.
The restrictions that FTMO, for example, on holding over the weekend encourages short term trading, and thus possibly over trading.
The plus side is that you are not liable for any losses. So, if you blew the account, or a black swan event blew your account, only the funder would be liable. I think thats a positive thing.
Makes you wonder if they truly are funding you, or are just relying on people paying the fee, and hoping they fail.
Looking at FTMO, you can do a free trail as a taster.
More research needs to be done on how many traders are still trading after 6 months / 12 months, etc.
Also, once you pass the challenge and verification, there are no profit targets, although the drawdown limits remain.
Anyone else doing a funded account?
They are great prop firms. I suggest choosing between FTMO and The5ers. All the rest just copies their model.
This is the absolute crux of the matter and why people fail - they trade for example 2% risk on 100K when in reality they should be trading 2% of 10K.
There was a BBC documentary where they did the maths on the general number of accounts that brokers announce lose money and calculated that FTMO etc would be profitable just from the sign up fees because so few people pass. Add to that the other rules that make it even harder, they would be able to make a lot of money without ever putting a real trade.
The same documentary even asked them why the trader is trading a demo account, and they said they copy trade it onto a real account. They also asked about the above and I think FTMO stopped talking to them.
Hey, can you please add a link for the BBC documentary, thanks