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Any long term success stories from funded traders in these get-funded programs?
I'm practicing a few hours on my simulated account now. Busy days and re-locating. I could trade small size (MES) in my real account, but knowing myself I might be tempted to trade bigger. So, waiting until I'm settled in my new apartment with any serious trading.
Oh. And I decided not to take up the E2T offer. Pretty much considered these companies ain't worthwhile at this point. They're more like a casino where a proficient trader can be able to pass the combine, take out profits (yes, these companies pay out even if they may not want to), but at the end of the day I don't think they really want to FUND a trader.
There’s a guy on YouTube (yes yes I know about as reliable as an astray on a motorbike) who live streamed at least a couple of successful TopStep combines. It also shows him blowing the breakers on an account he’d used live for 5 months. Pretty sure it’s all for real you couldn’t fake that reaction. Shell-shock whilst remaining positive for the stream. Extraordinarily slippage was the final nail in the coffin. I’ve found some of it fascinating though only dip in and watch them finger on fast forward as they are morning live sessions.
He points out that if you can pass it’s a really cheap way to get access to margin. I think having just blown one he’s doing a topstep 150 right now.
Also recently found another channel that I’ve not really watched where the guy makes videos of him going through the process different programs different accounts sometimes trading micros. He appears to shelve them and start again once complete though presumably he takes advantage of any completion bonus. Very risk conscious (which these programs are all about) with a how to pass slant.
Whilst YouTube can be a cesspool there are odd things that I find interesting these where an example.
I have very little interest in the details of these programs, but I was interested by this post from another thread:
So, you're telling me that you get "funded" and then are paid based on how you trade on a simulator? The first thought that came to my head was, sounds like payment for order flow to me, except that they're not really paying. I noticed that someone else earlier in this thread (now banned) had a similar thought.
It's an insanely good business model -- and no, I have no horse in this race, but this is how I would do it, if I wanted to scam people run this kind of business:
1) charge undercapitalized retail traders $200 (or whatever it is) per "combine" or month or...
2) get an instant look at where hundreds of traders, most of whom are generally buying highs and selling lows, are executing (and where their orders are)
3) use the money earned from them to fade them, all day long
So, I get people who I know are statistically wrong as a group to not only telegraph in real time to me what they're doing, but pay me for it.
The best part, if the quoted post above is accurate and the norm, is that when they do "fund" you, all they're doing is a simple cash outlay when you happen to be right. There's no margin requirement for them to fulfill, because there is no trading on an exchange. If you're generally profitable, they have your orders they can piggyback (or front-run) in the actual market. If you've been funded and are not doing well, you're either ignored or faded.
I'd love to hear from companies -- is this how you actually run things?
@josh, I don't know that they all do this.... and I do get the reference to payment for order flow. ( )
Would I accept these terms myself, as stated by LeeLoo? No. I want to be making real trades, thank you.
In the thread you quoted from, the recent one on TopStep, someone who had a funded TopStep account did an experiment where he entered limit orders in the funded account, then checked from his personal account to see if they actually hit the exchange:
I have no skin in this game, and after the cascade of posts in that other thread over the past few days, would be happy to never hear the name of any of "these companies" again.
But in fairness, they are not necessarily all "these companies" -- there is a certain amount of diversity between them and they may not always be the same.
Bob.
When one door closes, another opens.
-- Cervantes, Don Quixote
Some of these firms say they'll eventually put you on a real account. OneUp/MES basically says they're entitled to switch you between live or simulated accounts (on your live account) at their own discretion. TopstepTrader may be one of the few which actually have you on a live account, although they also offer a simulated 'funded' account it seems.
Here's a guy who made a windfall profit who's not getting paid with one of these firms. Both I and some other guy raised this concern earlier on about what these firms would do if even by luck some trader makes a huge profit. As can be seen with this firm (assuming it's true) - they're not paying.
The following applies to a "live sim" or "we'll pay you your gains even though you're trading on a simulator" type system.
This is a very real possibility, regardless of whether this particular claim is true (I have no reason to either doubt or believe it). The fundamental advantage of trading futures on an exchange is that the exchange clearing house becomes the counterparty for risk purposes. That is, it doesn't matter who's on the other side of the trade. That person's clearing firm has margin requirements for that counterparty, and the exchange clearing house has capital (and many other) requirements for clearing members. So, the exchange buffers you from the risk that the other party won't pay, is insufficiently capitalized, etc. This eliminates the counterparty risk associated with bucket shop type operations like retail forex and CFD brokers (yes, that 40 pip stop run really was a stop run, because it didn't actually happen on any other brokers!).
But when you're trading a "live sim" account, the risk is even greater--there's literally no one holding anyone accountable for anything, because you're not actually trading. It's more like you're playing a video game, and you're relying on the company hosting the game to pay out to the winners, when there can be multiple winners, of arbitrary amounts!
I don't think anyone would do this if they really understood the risk of not getting paid. The funding company has every incentive to not pay you, and they do NOT have the capital in the event of a tail event to actually pay out. THEY are the counterparty!
In an actual market, the winners are paid from the pocket of the losers. At the end of the day, all participants' accounts are marked to market -- so, regardless of the longevity of the trade, etc., your net buys and sells are calculated, and you must meet the margin, and any losses are debited, and any gains are credited. It's zero-sum--that's what clearing is about. So, if MANY traders happened to buy the low of that day, and MANY sellers sold to them and stubbornly held on, and everyone got flat at the end of the day, those big gains made by the longs came from the pockets of the shorts.
Now, imagine that 100 traders in a "funded trader" program go all-in long, low of the day, in a "live sim" system. Who did they buy from? No one! There is no one to cover the other side. It's like being a bookmaker, where everyone bets on Team A. If no one takes Team B, and you're the bookmaker, well, how do you pay out those who bet Team A? You can't! You might have some reserve funds to handle imbalances, but that's what a funded trader company who pays out actual cash on a simulator is doing. What's worse, is that they can't even front-run, or join you, and still make enough to cover their payout. If 100 traders buy and make $5K each, you think they're going to pay out $500K? Heck no.
In the exact situation you described, the trader is in the same situation as a customer of a bucket shop, or a non-exchange FX broker or a CFD dealer: they've traded with their "broker," or in this case their "funding" company, not with other traders they met and actually made a trade with on an exchange. So they should hope that their actual counterparty (the funding company) has the money to pay up. If not, since they did no actual trade with anyone, they will be flapping in the wind.
I object to lumping all these companies together, because the deal is not always the same. But I can't see any other way to look at an "it's sim but we'll pay you anyway" situation. If it's sim, the counterparty is the one furnishing the simulation. Which is why, in my recent reply to you, I said I would not accept the terms that were being offered there.
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Since it is getting late here and I feel a little like venting (sorry, not your fault ), I'll also say that I am impatient with the level of analysis and attention to detail that is found in many discussions of "these companies." (Not referring to you @josh or to @Howard Roark here.)
I think that many traders who have tried these firms and not succeeded basically just can't trade even in pure sim, and it surprises them when they don't pass the sim initial screening test (called a "combine" or whatever, depending on the firm.) They then blame the firm, not thinking they may have had a role in their own lack of success. I am not being as critical as this may sound, because, a few years ago now, I tried to pass many TST Combines and failed, sometimes miserably. But it did teach me that I didn't know how to trade when there was even the slight amount of pressure on me that the supervised simulation of the Combine provided, which ultimately was good to know. (It also took me a long time to get this, and longer to make any use of it. I am slow sometimes. )
But at the same time, the trading industry is full of fakers who only want your money. Which is another reason to examine carefully anything that is offered in the way of funding. I have no reason to suspect any of these firms are out to get you, but they might be, and this is a good reason to analyze them stringently and carefully.
Probably as a rule, trading the micros with a small contract size is a better deal, until a trader actually knows what real trading is like. But that's another discussion.
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Sorry for the interlude. I think your analysis of the perils of "sim with payment" is exactly correct, and while I don't know much in detail about many of these companies, the simple possibility of the firm going bust in a sim with payment situation would keep me away.
Thanks for reading my night thoughts.
Bob.
When one door closes, another opens.
-- Cervantes, Don Quixote
I agree with this, BUT, fundamentally, the business model is all the same and I do not see anything which suggests they actually want to fund and back a trader. It seems like TST have the best reputation and possibly for a good reason. They may also be one of the firms which actually lets you trade a real account. But, I don't see anything to suggest they want you to succeed, nor have I seen any reports of TST backing any serious talent.
Exactly.
You may want to re-read this thread and my own particular experience with OneUp. In short, they liquidated my account on the grounds that I broke a rule (true). At that point my account had $7K of profits in my funded account and I was never in negative territory, nor did I exceed any maximum size parameters or hit any drawdown rules.
The way I see it is that if they really wanted to fund me and have me succeed, they would have given me a warning as they are known to have a 2-strikes-and-you're-out policy, but seeing how they're not and would actually have to pay me out of their own pocket it was a good opportunity for them to get rid of me.
Some will interpret this as me being a bad loser and not taking responsibility. Most certainly not! I've lost plenty of money in the market and never blamed anyone but myself as that's the only way you can ultimately succeed in this game.
If I recognized these programs as a genuine opportunity to get some capital to trade for I would have done it again, but I now see it for what it is.
Also, you'll find that virtually ALL of these firms have one set of rules for the try-out and another as soon as you're funded. You think it's easier as soon as you're funded? Hell no. Much more restrictions and rules. OneUp even have this silly rule where they can literally get rid of you if your volume transacted is below a certain % of your evaluation volume. Even if you're profitable. And Topstep recently added a rule about how you can NOT withdraw all your profits at once. It's all ridiculous.
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