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Most Funding Firms are a Scam


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Most Funding Firms are a Scam

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  #31 (permalink)
 matthew28 
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canoekoh View Post
despite outcry from funded traders for such a long time and the fact that the abundance of these companies technically *should have resulted in more competition and thus better evaluation rules, the trailing DD based on unrealized PnL is the one thing these companies ABSOLUTELY CANNOT COMPROMISE ON.

once you come to the realization that the trailing DD based on unrealized PnL is literally the LIFEBLOOD of the profit structure of these companies, do you still want to waste your time and money on a game that's rigged against you?

Totally agree that a trailing drawdown based on unrealized profit isn't good (for example an account has a $1000 drawdown limit for the day the trader has a good trade on for $2000 in profit and they are holding as they think there is more potential for the rest of the day, but the trade retraces $1000 and they get taken out at +$1000 on the day yet still lose the account).
So traders shouldn't choose companies with that rule.

I understand the rules for Topstep as that is the only funding company I have tried. They don't have a trailing drawdown based on unrealised profits during the day, they never have. The maximum drawdown is fixed throughout the day, so that is at least one company that doesn't have that rule. (They were also the first funding company that appeared for retail traders and have been going over ten years so it was the companies that came after them that have gone with an unrealised profits max drawdown).

I look at the Topstep Community Facebook page quite frequently and there are always people complaining that Topstep has two steps for funding, one step to show you can make profit and the second step, with a scaling plan to show that you can manage risk and produce smaller consistent profits (and not just have got lucky in step 1: failed, reset; failed, reset; passed). Some other companies have one step so people sign up but fail to read the rules and see they can't withdraw profit for 30 trading days, or three months once funded, or there is a consistency rule in the Funded Account, or whatever. Topstep require at least five profitable days of a notional $100 between withdrawals which isn't too onerous surely if somebody is profitable (or they can close the account and withdrawal).
People should actually read all these company's rules properly instead of just signing up to whichever one has a special offer on that week or says they can be funded in the least amount of time possible.

The same with the other complaints. I understand a lot of these companies use Rithmic and Ninja, if people are seeing that others have had problems with those platforms when the orders are being routed through a funding company risk management system, then don't use those platforms.
The company I previously mentioned has a Tradovate based platform using CQG data for instance as one of their recommended platforms. That platform worked fine when I used it.

And the same with trading on a sim account rather than a real funded account. The above company again brought that in as an option because presumably, being a business, it made financial sense to not frequently lose the maximum account draw down to people who earn a funded account and then blow it. And despite occasionally needing to credit the maximum sim account balance of $5000 to those that are actually consistent traders and then move in to a proper Funded Account, it must make business sense to do that.
With that company the trader is offered the choice of going to a proper Funded Account or choosing the sim account after Step 2, they just need to read the FAQs page going through the pros and cons of each and make their decision (especially consider the point about the Funded Account/Premium Funded Account starting balance).
Clearly if a trader thinks sim accounts are a scam, don't choose the sim account option and choose the Funded Account instead.

There are a lot of funding companies, people simply need to read the rules properly and understand the implications and then compare them all and make the appropriate decision about whether to use them or not. I would suggest that the length of time the company has been in business should also be given some weight, when balanced against a more recent company with a limited history.

None of this is pointed at Canoekoh, I simply quoted him initially to start off.
I have read a lot of threads recently with personal opinions stated as if they are self evident facts. Clearly "most funding firms are a scam" can't be true as the financial regulator would be deluged with complaints about this or that firm and they would either be investigating it, or have shut them down already.

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  #32 (permalink)
 bobwest 
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TraderCornel View Post
Yea, my point exactly, they give you the run around; only if you did this and only if you did that. But FYI, I did all that and more and could not close it only after a while. I contacted NinjaTrader and their Log showed the rouge order without a tracible route and my attempts to close the order without sucess. When I contacted Rithmic they blamed NinjaTrader saying it was possibly a 3rd party plugin, but I was not using a plugin at the time. Also, that does not explain why the order showed up in the first place and why I could not close it from their software. This is present in all the firms that are using Rithmic. This is why I concluded most Firms.

OK, I think that at this point we have enough information to understand the situation brought up by @TraderCornel, the original poster in this thread. If anyone thinks this is not a good summary, let me know, but I think it is:

1. He had a bad experience with Apex, where an order that he did not make appeared in his account. He has shown a video where someone else reports the same thing.

2. He ran into problems getting Apex, Ninja and Rithmic to respond, and no one took responsibility. He also found Apex customer service to be unsatisfactory on other points.

3. He believes that Apex deliberately put the rogue order in his account to scam him, because it would affect his profit/loss.

4. He also believes that Rithmic is part of the scam. Further, based on Rithmic being used by other fundng firms, he thinks they are all guilty of scamming. He says that "This is present in all the firms that are using Rithmic. This is why I concluded most Firms" are scams. So, Rithmic is a scammer, therefore most of these firms are scammers too, because they use Rithmic.

5. He presents a number of other general issues why using these firms is a bad idea, and others have chimed in on these points as well.

I think this covers everything the OP has presented. If I missed anything important in terms of the facts offered, I hope he will correct me on it.

So, if this is the scenario, what to make of it?

I think it is reasonable to believe that he had a bad experience with Apex regarding an order, and that they handled it badly. It is possible that in some way Rithmic had an issue that caused it, since Rithmic is providing both the trade data and is operating the simulation. (In these cases, the Rithmic simulation server is providing simulated trades rather than routing the orders to the exchange servers for actual matching in the live market.)

The OP is convinced that Apex deliberately put a bad order into his account to make him fail. He thinks it does this to others as well, as evidenced by the video he posted. I do not know if Apex is a good or a bad company to do this kind of trading with, but I think it is not even close to plausible that they deliberately put in random "rogue" orders in order to destroy someone's chances to succeed. Why? Well, a lot of people have used Apex, for one thing, and this is the first of these complaints we have seen here. If they did this, it would be shouted from the rooftops by a great many traders. I know he has a video about it, and I don't doubt that it has happened. Is anyone doing this on purpose to make him or anyone else fail? I truly doubt it.

As to Rithmic being in on the scam, Rithmic is used by a large number of brokerages for sending their customers' live trades to the exchange. There are traders who are reading this right now, and a lot of them, whose live trades are routed to the exchange by Rithmic. The role of Rithmic in processing trades in the futures industry is enormous. It is not plausible that Rithmic is deliberately generating fake "rogue" orders in order to make a few simulation customers fail their funded trading accounts, a very small part of Rithmic's business. Also, if they did, then all the users of any other funding firm that uses Rithmic would be shouting about this. Any firm that uses NinjaTrader for their evaluation accounts is going to be using Rithmic, as are others. That would be hundreds -- probably thousands -- of traders.

So it simply comes down to whether it is believable that Apex and Rithmic -- and most other of these firms as well, since many use Rithmic -- are intentionally making their customers fail by inserting fake orders to mess their accounts up. You can either believe this or not, I suppose.

Or, you can believe the OP had a bad situation and is unhappy with it.

There are, of course, many reasons why it may not be a good idea to use these companies, and that discussion goes on all the time. Others have weighed in here, pro and con, based on that larger discussion. As I see it, those issues have nothing to do with this particular claim about an incorrect order being deliberately use to scam someone.

As to whether what occurred in this situation means that the OP was scammed, I think he had a genuine problem with an order, but I do not think he was scammed, which means, deliberately cheated. Nor do I think that Rithmic was part of a plot to deliberately cheat him. Nor do I think that the association of other firms with Rithmic means that they are all scammers too. Readers will judge the situation based on their own assessments of the probabilities, but this how I see it.

Bob.

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  #33 (permalink)
 Tymbeline 
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Many thanks for your summary and observations, Bob. I see it exactly the same way as you (and for the same reasons).

I'd like to add that on the "broader subject", I think Matthew's post, just above yours, is surely one of the best-informed, most well reasoned and potentially helpful forum posts I've read, and that many people may be assisted by it, if they read it slowly and carefully.

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 tr8er 
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Great job Bob and Matthew

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  #35 (permalink)
 chipwitch 
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bobwest View Post
The OP is convinced that Apex deliberately put a bad order into his account to make him fail. He thinks it does this to others as well, as evidenced by the video he posted. I do not know if Apex is a good or a bad company to do this kind of trading with, but I think it is not even close to plausible that they deliberately put in random "rogue" orders in order to destroy someone's chances to succeed. Why? Well, a lot of people have used Apex, for one thing, and this is the first of these complaints we have seen here. If they did this, it would be shouted from the rooftops by a great many traders. I know he has a video about it, and I don't doubt that it has happened. Is anyone doing this on purpose to make him or anyone else fail? I truly doubt it.

I don't think anyone is doubting the experience, but the cause. The cause my be something else entirely not considered or even imagined.

My understanding is that this is on NT platform and I am currently experiencing something similar with the platform with NT as my broker and CQG as my data provider. Of course, I do not blame any of those parties being at fault. I haven't found the culprit yet, but I've ruled out a couple things.

Specifically, I have done some trades in sim account that would not go away. I couldn't flatten or offset them. If I had an open long position, I could take on a new short position, both would stay open. This was very disconcerting. It would appear on my positions tab, but not on the accounts tab. The account balance wasn't changing. It was saying I was flat, but the positions tab showed 7 or 8 open positions. I'm not saying that this is exactly the same thing the OP experienced.

However, the problem came about after loading a sample addon that NT has made available and making some changes to it. I didn't do anything directly pertaining to orders, but I must have inadvertently deleted something important. Their online support has suggested that this could be a threading issue and the docs seem to agree. But the email support has told me the opposite. I'm still in the process of figuring it out. I have never worked with multi threads before.

My point is that NT uses multithreading and that can be tricky to work with. It sounds like Apex uses an addon. While the OP problem isn't exactly the same, I can see the possibility of a bug in the addon. Perhaps even corrupted data or a conflict within the OPs system. It's all above my pay grade. But like you said, "scam" is probably not the intent.

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  #36 (permalink)
 bobwest 
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chipwitch View Post
My point is that NT uses multithreading and that can be tricky to work with. It sounds like Apex uses an addon. While the OP problem isn't exactly the same, I can see the possibility of a bug in the addon. Perhaps even corrupted data or a conflict within the OPs system. It's all above my pay grade. But like you said, "scam" is probably not the intent.

Based on what I know of other firms that use the NT/Rithmic pairing to do their sim trading, I think it's much simpler than that.

As I recall, in NT you just enter the Rithmic server for say, Topstep, as your data source (I don't remember the lingo any more for NT, but it's something like that -- it's where you normally put your broker.) You also need to have your license key set by NT for that server. Then you make sure you have NT set for live trading, not sim, because as far as the NT platform is concerned, it's just sending the trades off to Rithmic -- which it is, but they end up in the Rithmic sim server and not on the exchange. This is completely different from the normal simulated trading in NT, which stays inside your PC and never gets out to anything at all.

That's it. No NT addons needed. NT thinks you're live, and treats everything as if you were. This gives the funding company access to your trades that it wouldn't otherwise have, so it can monitor your trading. But it's all via Rithmic. The funding company doesn't install anything of its own.

When Topstep first wanted to use NT as a platform, years ago, it did a deal with Rithmic and all (or possibly most) of the development work was done by Rithmic (and little, if any, by NT), and that's the only place where anything is different between having a Combine-like account and a regular live account with NT. Nothing is added to NT by the funding firm, and there's no addon.

It's certainly possible that there is something going on at Rithmic's side, since the path is not exactly the same as in a regular live account. But if so, it's rare.

Bob.

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bobwest View Post
OK, I think that at this point we have enough information to understand the situation brought up by @TraderCornel, the original poster in this thread. If anyone thinks this is not a good summary, let me know, but I think it is:

1. He had a bad experience with Apex, where an order that he did not make appeared in his account. He has shown a video where someone else reports the same thing.

2. He ran into problems getting Apex, Ninja and Rithmic to respond, and no one took responsibility. He also found Apex customer service to be unsatisfactory on other points.

3. He believes that Apex deliberately put the rogue order in his account to scam him, because it would affect his profit/loss.

4. He also believes that Rithmic is part of the scam. Further, based on Rithmic being used by other fundng firms, he thinks they are all guilty of scamming. He says that "This is present in all the firms that are using Rithmic. This is why I concluded most Firms" are scams. So, Rithmic is a scammer, therefore most of these firms are scammers too, because they use Rithmic.

5. He presents a number of other general issues why using these firms is a bad idea, and others have chimed in on these points as well.

I think this covers everything the OP has presented. If I missed anything important in terms of the facts offered, I hope he will correct me on it.

So, if this is the scenario, what to make of it?

I think it is reasonable to believe that he had a bad experience with Apex regarding an order, and that they handled it badly. It is possible that in some way Rithmic had an issue that caused it, since Rithmic is providing both the trade data and is operating the simulation. (In these cases, the Rithmic simulation server is providing simulated trades rather than routing the orders to the exchange servers for actual matching in the live market.)

The OP is convinced that Apex deliberately put a bad order into his account to make him fail. He thinks it does this to others as well, as evidenced by the video he posted. I do not know if Apex is a good or a bad company to do this kind of trading with, but I think it is not even close to plausible that they deliberately put in random "rogue" orders in order to destroy someone's chances to succeed. Why? Well, a lot of people have used Apex, for one thing, and this is the first of these complaints we have seen here. If they did this, it would be shouted from the rooftops by a great many traders. I know he has a video about it, and I don't doubt that it has happened. Is anyone doing this on purpose to make him or anyone else fail? I truly doubt it.

As to Rithmic being in on the scam, Rithmic is used by a large number of brokerages for sending their customers' live trades to the exchange. There are traders who are reading this right now, and a lot of them, whose live trades are routed to the exchange by Rithmic. The role of Rithmic in processing trades in the futures industry is enormous. It is not plausible that Rithmic is deliberately generating fake "rogue" orders in order to make a few simulation customers fail their funded trading accounts, a very small part of Rithmic's business. Also, if they did, then all the users of any other funding firm that uses Rithmic would be shouting about this. Any firm that uses NinjaTrader for their evaluation accounts is going to be using Rithmic, as are others. That would be hundreds -- probably thousands -- of traders.

So it simply comes down to whether it is believable that Apex and Rithmic -- and most other of these firms as well, since many use Rithmic -- are intentionally making their customers fail by inserting fake orders to mess their accounts up. You can either believe this or not, I suppose.

Or, you can believe the OP had a bad situation and is unhappy with it.

There are, of course, many reasons why it may not be a good idea to use these companies, and that discussion goes on all the time. Others have weighed in here, pro and con, based on that larger discussion. As I see it, those issues have nothing to do with this particular claim about an incorrect order being deliberately use to scam someone.

As to whether what occurred in this situation means that the OP was scammed, I think he had a genuine problem with an order, but I do not think he was scammed, which means, deliberately cheated. Nor do I think that Rithmic was part of a plot to deliberately cheat him. Nor do I think that the association of other firms with Rithmic means that they are all scammers too. Readers will judge the situation based on their own assessments of the probabilities, but this how I see it.

Bob.

I hope you are right. But unfortunately, it is happening everywhere to a lot of traders. The reason traders do not report it is because they are told it is their fault, computer, internet, etc..., Also it is such a hassle, and let’s not even mention all the critics. That is why I did not want to mention names, but some of you insisted. All I wanted is for people to be aware of the signs and for the industry to see we are paying attention and stop whatever hell they are doing to people' accounts, because they are stealing millions from people.

Further, Rithmic was aware of this problem because they have admitted as much in an email. And guess what? They did nothing to fix it. I do not believe in coincidence. The funding firms have back-office access to people's accounts and can easily mess with them. This problem did not start yesterday; it has been going on for a while; and how can it be fixed when every time, if by some miracle, you can contact one of these firms; it's always you, you are doing something wrong, your internet is shit, your computer is too slow, you did not click this and that, and pushed this and that, cause only if you would have done this, and checked this, and rested that. BUUULLLLLLSHIT!!! I was born at night, but not last night.

And by the why, rouge and un-cancelable orders did not just happen once, it happened over and over and over (just like the trader in the video) until I finally decided to find and trace these orders without resetting NinjaTrader, because that is what they tell you to do in their videos, and if you do, poof, all the evidence is gone.

But, I understand, everyone is entitled to their own opinion. At least now, if people decide to try one of these firms, they'll know what to look for if things like this begin happening to them.

I personally really hope that these firms get their act together, but somehow, I really doubt it.

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  #39 (permalink)
TraderCornel
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matthew28 View Post
Clearly "most funding firms are a scam" can't be true as the financial regulator would be deluged with complaints about this or that firm and they would either be investigating it, or have shut them down already.

Really, when is the last time you saw these regulators do anything right for the retail? Remember 2000 and how they fixed it? They introduced the pattern day trading rule that pretty much screwed every trader that did not have 25k. You call that fixing?

How about the home loans fraud in 2008? Did any banker go to jail for what they did? Did not think so. I could go on and on.

The reason I did not contact the regulators yet, is because I know it will hurt the retail traders even more. Because once the fraud is found they will fix it by restricting retail trading in futures just like they have in Stocks. I figured it was better to try and put some pressure on these companies to clean up this mess. And guess what, I'm already seeing a report that the problem just vanished, overnight, at least at APEX. Well, isn't that interesting. We'll see how long it lasts. Now you can expect another big sale from him.

So, I rather have a class action lawsuit in civil courts, which I'm currently considering, because I'm tired of people denying what is in front of their faces. But if you insist, I'm "this" close to contacting the regulators.

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 chipwitch 
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TraderCornel View Post
So, I rather have a class action lawsuit in civil courts, which I'm currently considering, because I'm tired of people denying what is in front of their faces. But if you insist, I'm "this" close to contacting the regulators.

Well, if you're seeking monetary remediation, I should think presenting your case to those entities might be more fruitful than posting in a forum about it.

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