To be fair, this does not exactly admit to any wrong-doing (e.g. Ponzi scheme). She claims that most payouts are given from the company’s pocket (not all), which is not surprising, considering the low success rates.
I will explain why, using a similar response that I gave regarding FTMO and the claim that they, and all others, might be following a similar model (this response was in reference to a BBC documentary that was shared on Facebook):
The video addresses the issue regarding FTMO’s FAQ and client agreement that states that FTMO traders will be given a demo account in order to trade virtual funds. Eventually, the revelation that demo accounts are connected to a live trading account, where real money is made, is briefly discussed.
A potentially important point that has not been considered is the seemingly-intentional legal language that is used. Such language could indicate that the go-between structure is by design as an effort to mitigate legal loopholes that prohibit trading for traders that operate from a restrictive jurisdiction, that would otherwise not allow the broker-trader relationship.
By acting as a go-between, this limitation can be avoided, along with all of the red tape and complications that are typically involved in money management and finance-related services. Instead, FTMO can establish contracts with traders using simple, independent contractor agreements without the need for special licensing and regulatory compliance, since FTMO traders are not actually trading real money and FTMO is not acting as a broker (very important discernment), but are simply contracting services that act more like signal providers, where FTMO can then decide if they want to take the trade or not.
That being said, it would not be unreasonable for FTMO to structure their trading in such a way that only trades from consistently-profitable traders are being pushed through to a live account, not just for the sake of the aforementioned, but also as a risk-mitigation effort. It would also not seem unreasonable if fund allocation on the live-account leaned more heavily towards these higher-success-rate ‘signals’, where signals from smaller traders with less-desirable success rates are completely ignored; which could also explain why they prohibit similar strategies across single-trader accounts, public EA’s and/or through multi-trader copiers etc…
FTMO has figured out a way to bring signal providers to them and has set up a system to weed out the losers while only keeping the absolute best. Not only that, but they have figured out a way for the signal providers to PAY them, instead of the other way around, all while minimizing their losses significantly (if not, entirely).
The important point to note, regardless of what you believe to be true, is that the skills that you develop as a trader are yours, and no government, broker or prop firm can take that away from you. If you are a consistently-profitable trader, then you do not need FTMO or any other group to find success over the long-term.
Also, as long as these prop firms continue to pay out, then it is all good in the neighborhood. If people start making claims about payout rejections, then it is simple…you prepare to readjust (since you should already have backup plans, no matter who you are trading with).
