The value to the trader is leveraging their capital, allowing you to make equal or better profits, but with less risk. Even though the absolute, total risk is the same, in order to realize the same profits on the smaller account as you could on the larger account, you would need to take on more risk, either in the way of time and exposure to the market, or, by using more leverage.
Leveraging prop firm capital affords you more buying power, without the use of more leverage, thereby minimizes your risk exposure while allowing you to see equal or better profits over the long-term. This benefit becomes greater with scaling models that will double account size once 10/20% profit targets are satisfied.
Similarly, in order to double your account size on your own, personal account, you would need to profit 100%, whereas, in order to double the account size on a prop firm account, you would only need to profit 10% or 20%.
Likewise, in order to make 1K profit on a 5K personal account, you would need to profit 20% on that account. To see the same profit on a 50K prop firm account, where you put up 5K of your own money to serve as draw-down, you would only need to make 2% on that account in order to see the same profit. You wouldn’t have to use as much leverage to do that, or spend as much time trading, and you could also minimize your exposure to the market, either in the form of time, or in the amount of trades that you would have to take (i.e. you would not have to use as much risk to achieve the same result).
Making 20% on a personal account could easily take you 2 months or more if you are a careful trader. Making 2% on a ‘funded’ account could take you a day or two. The result is the same, except you spent much less time and exposure to risk on the larger account, even though the money at risk was your own in both cases.
Even the argument that the draw-down is the same is technically incorrect in most cases, because if you are trading on a 5K personal account, in order to realize the same profits as you could on a 50K, under the same time-frame, you would need to use leverage. Using leverage increases your risk. If you were margin called/stopped, you wouldn’t even be able to use up all of that 5K in order to stay in the market long enough for a reversal, because your positions would be closed.
However, on a ‘funded’ account, you could use up every bit of that 5K in order to allow yourself more room and to even wait it out for a reversal that could pull you out of draw-down, whereas, that would not be possible on the 5K account that is having to use more leverage in order to achieve similar buying power, and is much more at risk of margin call/close and liquidation.
So, I respectfully disagree that programs that are structured like MFF accelerated offer no value, especially when considering a trader’s needs/preferences and circumstances etc…
Regarding your comment about initial fees being larger than allowable draw-down, I am personally not aware of any program that is structured that way.
Regarding evaluation programs, I do not see any problem with them. Even though, as you claim, the draw-down allowance is better in terms of costs etc., the value of the accelerated programs and programs like Blue Edge, is that the draw-down is total draw-down, not daily draw-down, so a trader can essentially accumulate profits and significantly increase their draw-down protection by padding the account.
