This is very interesting Argument you have there.

How about an example of an individual who is has not money to trade his own account because of the Mortgage, Family - Kids with 5 Activities a week. Single working parent.

All that newbee can afford is 30 dol per months to pay Apex for the data and Prop shops rules that enforcing him to do the right thing.

If he/she blows an account it is highly likely because he reached max DD. 99% failure is because of that. Even account is blown, he still have data to look at the market and trade his SIM account until the next month reset.

Don't get me wrong, I totally respect the people who has enough money to trade their own account.

I understand where you coming from I know a successful trader who couldn't work the Prop shop company because he couldn't adjust his style of trading. So he just left and putted full stop to it.

But we are talking about newbees here right. It is like a puppy, whom you can train to follow the rules right from the begging. Isn't it hard to teach an old dog new tricks ?
This is may be an ideal way to go for the newbee they stick to this rules and polish them until they succeed and perhaps may be later on they will have enough money to go to trade their own account.

Wouldn't it be good stepping Stone ?

The point I am trying to make if it is not for you then you don't need to be involved with prop shop.

@josh made good points in his posts.

With all do respect I don't see any constructive points in the response.

All I see below is "There is no other way but my way".

I wish Chris Gardner read the post below. I wonder what would be his response.

If you don't know who is Chris Gardner the here is the link for you to read https://en.wikipedia.org/wiki/The_Pursuit_of_Happyness

Who are these new traders letting their accounts appreciate 20%, let alone in a funded program? Or the 60% you mentioned earlier and then getting destroyed? These aren't traders, these are gamblers. You can do the same thing with a real account. These new traders don't have any money, so they shouldn't be trading. They'll get the same experience with a real account without the restrictions.

I think we're probably on the same page but talking past each other. Plus, I think less of these programs than you do from what I can ascertain.

all the other problems documented on this site with which traders' blowup their accounts... which I have never done I'm thankful to say.

Maybe this is a good opportunity to discuss that rule, which most people despise.

Let's look at Apex's trailing drawdown rule. Basically, it is calculated this way: the high water mark of your account, determined using open P/L (not closed P/L), less the max drawdown for the account size.

For the following example, I'll refer to the $50K account as a $2500 account, because that's what it is. You can only lose $2500, so that is your account size. The use of "$50K" is arbitrary and means nothing at all.

So for a $2500 account, your max drawdown is simply the account size: $2500. So the value at which your account will be disabled is $0 (which means that you have lost $2500).
You buy 1 MES contract and it goes 20 points in your favor. You have $100 in open profit and your open, realtime account value is $2600. You put a stop at breakeven and it comes back to stop you out.
Because your account high water mark was $2600, subtracting $2500 from that, we arrive at a trailing drawdown threshold of $100, whereas before it was $0. So, if your account value reaches $100 (you lose $2400 from here), then your account will be disabled.

Now, you do the same thing again. You buy 1 MES, it goes 20 points up for a $100 open profit, and comes all the way back again and stops you out. Nothing has changed, because your account value was $2500, reached an open realtime value of $2600, and now is still $2500. You can repeat this as often as you want, and it doesn't change.

What this rule highlights is the importance of profit taking. One case which people complain about is when they have this $2500 account, take on a lot of risk, it goes their favor, and then comes back on them for a breakeven or small winner. For example, they buy 3 ES contracts, it goes 10 points higher and they have an open profit of $1500, and it comes back and stops them out. Now their trailing drawdown stop-out amount is $1500 (high water mark of $4000 open value - $2500). So, they now have an account value of $2500 and a tailing stop-out value of $1500, and if they lose $1000 from here, their account is liquidated.

Personally, I don't see the problem. They were up 60% (!!) on their account. The only possible way to do this on a single trade is overleveraging. What if they had only been long 3 MES? Well, they'd only have a trailing drawdown stop-out value of $150. Leverage cuts both ways. When they were up 60%, the other side of leverage came to bite them. When your value goes from $2500 to $4000, open profit or not, it's *yours*. Not taking any profit there is the same thing as choosing to buy at that level and put in a 10 point stop.

The argument seems to be that "it's not money lost, it's money I've earned." Well, it wouldn't be a problem at all if proper leverage were used, would it? Leverage is the problem, not the rule. If you increase your account value that much on such a small account and don't take any profit, well, that's just poor risk management. Of course, there are times to be willing to let a trade run and come all the way back. But if the amount it runs is a huge percentage of your account value, you have taken on too much risk!. It's only a problem when the size is too large for the account.

That's my view anyway, love to hear your thoughts. Sorry for the long post.

Maybe this is a good opportunity to discuss that rule, which most people despise.

Let's look at Apex's trailing drawdown rule. Basically, it is calculated this way: the high water mark of your account, determined using open P/L (not closed P/L), less the max drawdown for the account size.

For the following example, I'll refer to the $50K account as a $2500 account, because that's what it is. You can only lose $2500, so that is your account size. The use of "$50K" is arbitrary and means nothing at all.

So for a $2500 account, your max drawdown is simply the account size: $2500. So the value at which your account will be disabled is $0 (which means that you have lost $2500).
You buy 1 MES contract and it goes 20 points in your favor. You have $100 in open profit and your open, realtime account value is $2600. You put a stop at breakeven and it comes back to stop you out.
Because your account high water mark was $2600, subtracting $2500 from that, we arrive at a trailing drawdown threshold of $100, whereas before it was $0. So, if your account value reaches $100 (you lose $2400 from here), then your account will be disabled.

Now, you do the same thing again. You buy 1 MES, it goes 20 points up for a $100 open profit, and comes all the way back again and stops you out. Nothing has changed, because your account value was $2500, reached an open realtime value of $2600, and now is still $2500. You can repeat this as often as you want, and it doesn't change.

What this rule highlights is the importance of profit taking. One case which people complain about is when they have this $2500 account, take on a lot of risk, it goes their favor, and then comes back on them for a breakeven or small winner. For example, they buy 3 ES contracts, it goes 10 points higher and they have an open profit of $1500, and it comes back and stops them out. Now their trailing drawdown stop-out amount is $1500 (high water mark of $4000 open value - $2500). So, they now have an account value of $2500 and a tailing stop-out value of $1500, and if they lose $1000 from here, their account is liquidated.

Personally, I don't see the problem. They were up 60% (!!) on their account. The only possible way to do this on a single trade is overleveraging. What if they had only been long 3 MES? Well, they'd only have a trailing drawdown stop-out value of $150. Leverage cuts both ways. When they were up 60%, the other side of leverage came to bite them. When your value goes from $2500 to $4000, open profit or not, it's *yours*. Not taking any profit there is the same thing as choosing to buy at that level and put in a 10 point stop.

The argument seems to be that "it's not money lost, it's money I've earned." Well, it wouldn't be a problem at all if proper leverage were used, would it? Leverage is the problem, not the rule. If you increase your account value that much on such a small account and don't take any profit, well, that's just poor risk management. Of course, there are times to be willing to let a trade run and come all the way back. But if the amount it runs is a huge percentage of your account value, you have taken on too much risk!. It's only a problem when the size is too large for the account.

That's my view anyway, love to hear your thoughts. Sorry for the long post.

I was originally responding to a post similar to yours and was trying to make the point that there are other futures prop firms that do not trail on equity (the high water mark you were talking about) but trail on balance (closed P/L). You have interesting views, if you have time I would like to know what you think about a situation where the profit target is $1500, there is no monthly fee, the drawdown is $5000 trailing on balance (closed P/L) but they take a bigger share (30%) of the profit. why would this not be beneficial to any trader (new or experienced)? Isn't this trading with free money?

I've stated before, that if you can average $100 a day, you can turn this into roughly $40K withdrawal a month for a $3,500 initial investment to get 20 accounts. If you trade 1 contract per account, you basically take on the risk of 1 contract with reward calculated based on 20 contracts.

I've stated before, that if you can average $100 a day, you can turn this into roughly $40K withdrawal a month for a $3,500 initial investment to get 20 accounts. If you trade 1 contract per account, you basically take on the risk of 1 contract with reward calculated based on 20 contracts. You will need a substantial account size to trade 20 contracts in your own account.

When you trade 1 and copy to 19 other accounts, you take on the risk of 20 Surely you understand that. When you lose $100 in one, you have lost $2000 total, much like you have gained $2000 total when you gain $100 in one. Psychologically it can definitely be advantageous, but risk is perfectly symmetric here.

Don't forget that it will cost $660 per month for such an evaluation, and after that either $1700 per month or a one time $2800 for the PA fees (numbers based on using Apex 50k size, at an 80% discount which is readily available). You can definitely think about it like an investment, one that certainly most will lose but for those who are successful, it can be a very nice return.

Ah, yes of course I understand that if you lose $100, that you lose $2000. What I meant is that if you lose $100, then this is what you are down per account and you have $100 against your trailing drawdown of $2,500 and not $2000 against your $2,500 trailing drawdown, but when you are up $100, then this is $2000 that you can withdraw (after meeting the minimum threshold of course). I should have been clearer about that; thank you for pointing that out.

Yes, you are correct with the fees, which is why I mentioned for about $3,500 investment. My assumption is that you pass the evaluation in 30 days and pay the lifetime once off PA fees. Even if it takes 3 months to pass the evaluation, then you are looking at about $5000 which is still a good deal in my mind. IF you can consistently squeeze out small daily gains. If $5000 is too much, you can start with 1 - 5 accounts and add new ones when you make withdrawals. This will just take a little longer, but your investment is also much smaller and after the first withdrawal, you are playing with house money.