Funded Accounts

Trading Discussion Prop Firms
22

I am not sure I follow why you would think that promises of lottery winnings, cars, houses or vitamin pills have anything to do with personally trading a prop firm using their funds.

Naturally, everyone is aware of the various scam schemes that pop up from time to time and it has already been established that traders need to do their homework on these firms in the same way as any other.

But there are already a number of these firms who have become established as market leaders, that are funding many trader accounts, and publish regular interviews with funded traders, who also publish their own Youtube channels. They also have good reviews on various impartial sites.

But there are also reasons for caution. One thing that I am wary of is that some of these firms offer instant funded accounts without any knowledge of the trader’s ability or track record. Naturally, the account terms are structured so that the maximum drawdown is at least mainly covered by the initial fee and commissions but it still leaves open (in my opinion) a serious question:

Nowadays, banks are obliged to carry out KYC (Know Your Customer) surveys. But, as far as I know, this is not done by prop firms except to the extent of a demo evaluation account. To a degree, this is not so serious in that the client risk is limited to a fee that has already been paid. But, in principle, it goes against general good practices in financial business and regulatory principles.

23

I should make a website similar to ftmo and charge people money for an impossible challenge trading session.

The following rules would guarantee that you would be disqualified:

  1. you have to close all your trades during major news events, which happened several times a week.

  2. don’t draw down too much.

For a $200 fee, you will be promised a $20,000 trading account (which you will never in a million years ever actually get)

For a $600 fee, you will be promised a $50,000 trading account (which again you will never ever receive)

And for the grand finale, for a $1,500 fee you will be awarded a $5 million account.

It’s all nonsense. Nobody ever wins these funded trader accounts.

The testimonials online are completely fabricated lies.

24

Major news events do not occur “several times a week” at all. Maybe 2/3 per month. And not all prop firms even impose this restriction.

The maximum drawdown is usually both a max daily loss and a max total loss of the original capital or current equity value. It is normally in the order of 4-5%, which is designed to protect the account and to avoid cowboy traders. That is, in my opinion, a very sensible amount for both the trader and the fund - no problem here!

A typical objective may be 5-8% over 6 months. That is 1-2% per month - that is not “never in a million years”- it is quite normal in fact. I expect to earn a minimum of 4-5% per month. But I agree it is not for everyone. This is not a Newbie environment at all. It is for experienced competent traders that lack significant capital of their own.

That is purely your opinion. I have three personal aquaintances who have elected to trade on funded accounts with regular payouts as part of their income. But that is not relevant here as I would not ask them to post here!!! :smiley: (although one of them was indeed a poster here some time back in his early days).

I would certainly agree that the average inexperienced newbie will never win. Most of them fail anyway, whatever they do! But even then, to lose a USD200 fee after 6 months of trying to pass an evaluation is probably less than they would have lost on their own accounts over that same time period!

It is also worth considering that when talking about large capital accounts, there is a big benefit in using a prop firm fund rather than one’s own capital which can then be used for other more stable investment purposes such as, e.g. rental properties. There is no sensible financial reason for keeping a large capital sum lying dormant in a trading account when it can be utilised elsewhere…

fair enough, But this is again just your opinion.

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25

One other factor that you would not be aware of:
These funds provide internal communication and discussion channels such as Discord channels where funded and evaluation traders chat daily about programs, progress, trading and markets. Often traders are reporting on reaching targets and/or stepping up their funding levels, etc. These are many and internal - hardly faked!!!

In addition, traders often buy multiple accounts with the same prop firm and copy trade across them or use different EAs on different accounts. These are not fakes, nor do they “always” fail.

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26

How many participants in this babypips forum are trading live funded trading accounts?

I find it interesting that I do not ever see any, but I would think that there would be several.

27

Hi @silverf466

This is a very good and relevant question. :slight_smile:

Whilst no one can know for sure, I think it is a reasonable assumption that very few, if any, active BP participants are trading with a prop firm. The lack of threads concerning this topic and lack of related postings support this view.

But I don’t feel that we can conclude from this assumption that the reason for this is because all BP members know better than everyone else that they are some form of scam.

BP is basically a site primarily aimed at beginners and mainly attracts new “wannabes” and newish traders who are on their learning journey. People come here mainly to learn the basics, develop their strategies, develop their skills, gain experience and reach a level of consistency in their profitability. BP is also characterised by what is called the “revolving door” mode - that many people come here, sign up, and then disappear after a few posts.

What we do not see here on BP is a lot of long term experienced traders. There are some. But since their number is small and only a small proportion of experienced traders want or need a prop firm, it would be strange if there were a lot of prop firm traders here!

It is worth remembering that prop firms are NOT suitable for learners or beginners still in their development stage. The evaluation is strict and the rules are tight. One needs a good strategy, self-confidence based on a proven track record, and sound risk/money management to get through. Let’s face it, the prop firms are hunting for talented traders that are going to earn them a lot of money using their funds. They are totally different to the “bucket shop” offshore brokers that are happy just to skim off the capital from näive, reckless Newbies.

By comparison, I did post above a link to a thread dedicated to prop firms elsewhere. It is over 700 pages long and started 2 years ago almost to the day. I haven’t read it all and I doubt anyone would, but it does show there is a lot of interest in this field.

I am sure there are good and bad issues raised there, but here is an except from one post there:

"I just wanted to update my experience with xxxxx. As I posted previously I reached my 6% target on day 14 so I just opened and closed a trade for 6 more days to satisfy the 20-day minimum requirement. So yesterday during their off-hours I finished the 20th day. I received a congratulatory email within minutes which contained my login credentials and the request for ID verification, bank info, etc. Within a few hours of their office opening up, I received an email stating that all my info was processed and that my account was now activated.
However, the account was for Meta5 which was recently added as a new option for their traders. I prefer Meta4 as my one main indicator and simple trendline selling EA is for Meta 4. So I go on their website, initiate a live chat, and within minutes my account is switched to Meta4 with new login credentials.
So regardless of the pros and cons of their fees, trading parameters, etc etc. The bottom line for me is they are extremely professional and on point when it comes to their customer service. They have a spotless payout track record and their scaling plan is very attractive. Anyways, just thought I’d share more of my experience with xxxxx. I’ll also be sharing my new 40K funded account journey…"

As has been said before, prop trading is not for everyone. And I am sure that a lot of experienced traders are not attracted by the idea that they have to share their earnings with the firm when they can keep all the earnings just trading on their own.

In most cases, I am sure that the attraction is simply that you get to trade with a much larger capital than one has, or can hope to build up in a short time. Afterall, 50% of USD5000 earnings is better than 100% of USD2000 earnings on one’s own account…AND you can use your own capital for other things!!!

Another reason why members here do not seem to trade prop firms, is perhaps because they inevitably end up migrating to the Discord, facebook, Youtube and other interactive sources operated by the prop firms for and by their fellow members. I know of one in this category.

This is, of course, just my view, as always :slight_smile:

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28

I am glad that you said that and not me… I’m not the new kid on the block and I am experienced around scams and I am experienced around similar things and if it is some kind of a scam then it is simply a scam.

The only thing I see online about these ftmo and my4X funds and Maverick FX etc is a bunch of obviously fabricated testimonials where people come in and say fluffy things about how they just passed their challenge trade and all of a sudden they’re making $50,000 or $100,000 and I’m like geez that is really nonsense.

Yes people want to find a prop firm that will plop money into their account but it is my firm belief that there is no evidence that these companies actually award any live trading accounts which makes them purely a scam.

Regards

29

@Alg626 is one, for example. I think there were a few others in his price action thread.

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30

As I said, BP is not the place to look for such evidence! Try fishing in the Dead Sea and you will catch nothing - but does that mean that fish do not exist?

I have offered you a thread on another site that does talk about prop firms. and talks a lot - including the “good” well as the “bad” and the “ugly”.

Search through the public sources of some of these prop firms and you will find active funded members talking to each other.

Also, the prop firm industry is already large and a significant part of the trading industry. IF they are “all scams” - where are the regulators? why are they not shutting them down? They are operating right under the regulators noses in major cities, not offshore in some bahamas island. Does that not strike you as rather strange if they are, as you claim, one big scam?

If you don’t look you won’t find. But the fact you don’t happen to have met anyone yet does not conclude that that they do not exist. In my experience, and community, traders do not go around shouting “hey, look how much money I’ve made.” Why would they?

Prop firms are not for everyone. Most wannabe traders fail, maybe even 90%. No prop firm even wants these headaches. To get in, you have got to be good. To stay in, you have got to be good consistently. That is not a trademark of the majority of BP members!

If people want to assume they are all scams, well fine. Much better not to take the risk and just trade your own account - no problem there!

Like I said, they are not for everyone. And if someone does want to find out if they are a scam then, well, for a max risk of USD100-200 try it, pass it, see if you get funded, see if you get paid.

And that’s it really. TBH, if someone has to come to BP to ask if they should trade a prop firm then I would suggest they definitely should not! Not because they are a scam of some kind, but because they are nowhere near ready enough to succeed.

But keeping ones eyes shut in the face of contrary evidence, albeit circumstantial, means seeing only wnat you want to see.

But I think we have said enough about this. It is great that readers are made aware of all sides and aspects of such a venture before proceeding. But from here on, they really need to do their own homework, as with all matters financial, and otherwise come to that! :smiley:

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31

The comments on the below YouTube video If you go to YouTube and read those comments they point out in the comments that the rules that are just simply ridiculous are the ones that say no weekend trades can be open stuff like that that’s what makes it a scam… they make you closed trades during news events etc. The typical funded prop trading firm rules are designed to force you to close your trades at a loss and that is what makes it a scam it is intended to collect a fee from the trader and give him nothing in return.

The bottom line is that the trading rules for these funded prop firms are designed very carefully to make it absolutely impossible that you will ever finish your challenge and be awarded a live account.

In the below video from Maverick FX they talk about how it costs you $3,000 plus $200 per month to get into Maverick FX… Oh my Gawd… they are making some serious income…

I rest.

Example comment from video:

Good review. I’ve been trading 19 years but most companies don’t like how i trade even tho I’m very consistent and profitable. Stupid rules like not holding on weekends or doing swing trades is a real deal breaker for me. Crazy most if these firms want day traders, which is REALLY risky.

32

Hi @silverf466
Thank you for posting that MaverickFX video - it is a good representation of what prop firms are all about - and disproves just about every claim you have so far made that prop firms are all scams.

But there is one big exception in this video. If one does their homework, they will find there is no need to pay a huge entry fee (only USD 90 -300 maybe), this is a one-time fee and there is no additional monthly charge, all internal training material and portfolio counselling is free, and there is absolutely no need to use any of your own capital whatsoever.

Contrary to what you have been claiming, Ryan Brown in your posted video confirms that traders do get to post live funds when they succeed, that he thinks MaverickFX is a good firm (not a scam) and that they do pay out profits, and that the independent reviews are mostly genuine with maybe possibly a few fakes.

He confirms that he himself is a live prop firm trader, now with a different firm and, as he writes in his introduction to this video (only 1 month old):

“In this video, I go over my experience at My Forex Funds. I’m a My Forex Funds Trader. I’ve made over $20k profits so far. Is prop trading worth it? Here, I talk about my prop trading forex strategy of (attempting) to make big profits from these firms. I’ve been trading as a prop trading forex trader. I also do a lot of prop trading live using ALWAYS public trading stats.”

I do not understand this comment at all:

Having rules does not make anything a scam. They are just rules! In fact, it is generally a very good idea not to carry open speculative positions over a weekend with closed markets! I would even expect that the majority of retail traders do not do that anyway!!! Ryan Brown states that he makes maybe 7-10 trades a week and so there is every likelihood that he can manage his profitability without the need for open weekend trades.

It is not a scam that a company applies risk management rules to protect their own funds and certainly not a scam when the trader knows the rules upfront anyway. In fact, there are some funds that do allow weekend trades on certain of their products.

It has already been stated that prop firm trading is not easy (why should it be), it is low risk on own capital, that is requires a successful, consistent strategy - and now your Ryan Brown video shows that it can be done (and a lot cheaper nowadays than what he describes here).

It is not for everyone, it is different, but, in the main, it is NOT a scam - but it is NOT a regulated industry (yet) and that needs keeping in mind.

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33

Those rules make it impossible to successfully pass one of the trading challenges.

The “pay to play” prop companies are fake.

Where are all of their successful traders from ftmo and my4xfunds and maverickfx?

Oh, excuse me, they are in a discord chat where I can only chat them if I pay a fee.

Maverickfx has been in business for at least a decade, but I have never encountered not even one maverickfx trader.

34

There is no point in continuing this with you. You believe they are a scam and yet post your evidence that they are not. That is your prerogative.

Those rules do NOT make anything impossible, as these few posted videos prove. You even posted one yourself of a MaverickFX live trader - what more do you want???

They certainlty do not make it easy, that is for sure. But for many traders, the task of making 6% in 6 months (for example) is not difficult at all, in fact rather easy.

What these prop firms do NOT make easy is for some smart-ass Noobs to come in and play with their money, lose the lot, and then walk away from it.

It is serious business for serious talented traders, that’s all. And I doubt there are many suitable candidates here.

But I see nothing new and concrete to continue talking about here and I dislike repetition.

So, ok, they are all scams and should be shot at dawn… :cowboy_hat_face:

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35

Sure. Its serious business for serious traders.

I suppose that is why these serious traders dont show their faces in here or the other forums with pics of them living the baller lifestyle or any lifestyle.

I only read promos for the prop companies.

Which now makes me curious if @alg626 can produce track record documents to backup his trades.

I am sure that he can.

36

my son-in-law (recently) and a friend of his (6 months ago) are two of them

they’re also all over the web: on Youtube, in forums, on websites, etc.

here’s an example, and there are hundreds more like this, where this one came from and elswhere

there are thousands of them, but of course you can say that they’re all liars, all paid actors, or whatever else you want to allege but can’t prove

but that sounds a bit like a conspiracy theorist, doesn’t it?

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37

When I am conducting due diligence, it is not my burden to prove anything, but instead it is my job to ask questions.

38

At last we are getting somewhere! :slight_smile:

Why should they appear here??? To talk to the negs like you who don’t and won’t consider anything other than their own opinions? That, unfortunately, is the norm here on BP and why many experienced traders do not stay here.

You yourself posted Ryan Brown’s videos concerning his prop live trading - why not go and ask him why he doesn’t post on BP and report what he is doing to you. Maybe even show you his bank accounts, too? There are many others on Youtube that I could post here who daily go through their prop trading - failures as well as winners.

Of course they don’t post here! If anyone is truly interested and has an open mind then they will go to them on their channels!! There is absolutely no reason or purpose why such a trader would come here! In fact, they would be doing a grave injustice to the typical BP novice if they did entice them to a prop firm!

Bit like wondering why the president doesn’t shop in your local market - must be cos he doesn’t exist, then!

If you are really interested then go find them, don’t expect them to come looking for you…

Of course they advertise!!! :roll_eyes:

I’ve no idea about that, but I suspect even if he has and is willing to share you wouldn’t believe it anyway. You have already had more than enough evidence that prop trading is genuine (some you posted yourself!), even if there might be some bad eggs in there somewhere (remember: unregulated).

Again why should they!!! That would only be ego-tripping which is another unfortunately frequent attribute amongst some of the näive people here on BP.

In the real world, it is not a case that all traders are looking to make millions and drive green lambos. That is also a näive concept. Every serious trader is running their own business. They basically fall into two broad groups:

  1. Generating an income that they live on (plus savings)
  2. Creating wealth which is regularly channelled into other things.

Some traders, of course, are doing both.

But every trader recognises their own comfort levels regarding risk exposure and capital management. These are two of the pillars of success. Every trader also recognises and defines their objectives in life. These vary a lot and do not always include just piling millions into the bank or lazing on some sunny beach somewhere - anyone who thinks like that is seriously blinkered about reality.

And most traders also recognise that purely trading at that level is not a life-long sustainable business and that they need to use the earnings to enter other, more stable, fields.

But, again, I see no reason why they should come here just to tell you all about it…

Go find them, talk to them (they are just ordinary people, like Ryan Brown), understand the business, try it if you want to get on the inside. I could give you some links to such people but, for obvious reasons, I will not do that. One thing they often have in common is a plague of jealous trolls, just like they would inevitably attract on a forum…

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39

This is what typical scams say in response to someone that is asking too many questions.

They make arguments that make you dizzy trying to respond to it.

Its similar to circular logic.

They always have twenty circular excuses why we never encounter ANY of these thousands of successful “funded prop” traders in forums etc, but we only see them in flashy promo videos.

Yes, I would call this a conspiracy… a conspiracy to commit fraud.

40

not when you’re conducting due diligence, no

but it’s VERY MUCH your burden to prove things when you make opinionated, prejudiced, ill-informed and factually incorrect statements like the three quoted just below these words

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41

i agree, of course

SovoS, i just want to thank you for all your attempts, here, to refute some of the prejudiced misinformation posted above

you won’t ever manage to convince silverf466 that he’s mistaken, but your posts are still a service to other readers who might otherwise make the mistake of imagining that he actually knows what he’s talking about

it’s not easy debating intelligently with sheer, blind prejudice and misinformation

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