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Any long term success stories from funded traders in these get-funded programs?
Basically, you have to deposit your own 'first loss capital'.
The example given to me was that with $25K deposited (which seems to be their preferrable minimum amount, although it's probably negotiable) - they'd let you trade 10 contracts with a $2500 daily loss limit.
I don't think $2500 is a realistic daily loss limit trading 10 contracts, so I would be probably trading a maximum of 5 contracts within that daily loss limit. And with intraday margin - I could easily do that in my own private account instead.
So, at this point, I'm not seeing the benefit of joining such a firm, unless we're thinking long-term and maybe getting the opportunity to actually trade firm capital.
I agree with you that under these conditions, at the beginning, it makes no difference whether the own or the company account with your deposit.
From my point of view, it would only make sense if the daily loss limit were scaled up, which would of course also increase the leverage.
Obviously depending on the risk profile, e.g. 20% increase every 2-4 weeks.
That would make sense to me, and I could imagine going this way.
MR79
"My only task as a trader is to protect my capital (risk management), the market will take care of the profits."
What I think is immensely important is that you are already reasonably profitable before you join the programme.
Otherwise you are just throwing money away.
But with today's micros, there is almost no reason to participate in such programmes anymore.
MR79
"My only task as a trader is to protect my capital (risk management), the market will take care of the profits."
Trading: CME Futures & US Treasury Bonds Futures (week) and Bitcoin (week-end)
Posts: 88 since Feb 2021
Thanks Given: 95
Thanks Received: 65
Prop firm isn't anything I would consider for long term unless it's advantageous tax-wise for you.
The end goal is to funnel the profits from the prop firm split to your own broker account as capital.
I'm considering 2 possible prop paths that are both 'first loss' and that require you to make a deposit in the $10,000 to $25,000 range because I want the SIZE for trading spreads/stat arb, and I want the opportunity to venture out into the equities space as well which will take obtaining SIE and Series 57.
The retail prop space with its tryouts are ONLY good if you have a winning strategy where you can apply your edge(s) successfully in a myriad of market states, while abiding by their risk perimeters. It seems like they instead market themselves to losing traders and tell them that it is better to lose reset fees with them than lose money on their own while trading live, while limiting the styles of trading they can use. It is best for undercapitalized winning traders who could use a small influx of cash.
IMO the product value offered by the prop firms is optimal for traders who already have an edge and are at least potentially winning traders, who may just lack capital and/or discipline.
The opportunity can be compelling, it just isnt exactly the same as the marketing spin the firms put on it. When they offer a "$150k account!!!" in all caps, for $400/month, with a daily max loss of $3k, most traders dont realize that in reality they are purchasing a $3k SIM account, and will almost certainly need to pay 2 or even 3 months worth of subscription fees before they pass, unless they use insane leverage, which also plays into the funding firms hands because then they make money on the reset fees anyway and its all in SIM (during the evals), so there is no risk.
So, BEST CASE, traders pay in probably $1200 to receive after passing a $3k (effectively) cash account. Thats still a good deal as its significantly cash flow positive, but then remember that after a "grace" amount you have to split profits with the firm, too, and have to pay for a NT8 license and CME data once funded..
Im just pointing out what everyone should know already - Futures Prop Funding firms can be a good opportunity, but they arent the holy grail of success, they are just a tool that is optimal and a super great option only for a very small subset of traders with a very narrow set of circumstances. If you know you are long term profitable, it makes little financial sense to give away 20% of your profits, and if you ARENT long term profitable, you will never get to a point of cash flow breakeven unless you find your trading niche right quick.
I speak as someone who has passed both steps of the TST 150k combine. I would recommend the experience to traders who lack discipline mainly, but also if cash flow challenged too, but are willing to adjust their own sense of sizing and risk to match the TST program immediately.
