Thank you for your reply.
However, by increasing the number of accounts, does not increase the drawdown amount. Increasing the account size does, but this brings with it a higher profit goal and monthly fee. If you did as you mentioned, your monthly cost on 10 $150,000 accounts would be $2,970.
Another interesting think I noticed was, if you look closely the drawdowns do not increase proportionately.
For instance the drawdown for a $50,000 account is $2,500 and the drawdown for a $100,000 account is only $3,000.

However, by increasing the number of accounts, does not increase the drawdown amount. Increasing the account size does, but this brings with it a higher profit goal and monthly fee.
Another interesting think I noticed was, if you look closely the drawdowns do not increase proportionately.
For instance the drawdown for a $50,000 account is $2,500 and the drawdown for a $100,000 account is only $3,000.

I think that, without getting too far into the details of a particular company's offering, the point with all these funding companies is that the "$50,000" or "$150,000" accounts are just sim accounts with pretend "balances." To compare them to trading with a real account, they do not give you $50,000, for example, of margin. They give you the "margin" that you can lose before you have blown up the account, which differs between them, but which is going to be just a few thousand sim dollars, nothing like the advertised face value.

This is a marketing decision, and it should be understood as such, and the "50k" or "150k" number should be dismissed by the trader taking the trial. Just look to see what is the amount you can lose, and be guided accordingly. They also all have some kinds of rules like the trailing drawdown rules, which are loss-control rules. A trader in a live account should have something of the sort as well if they trade on their own. Not having something to limit loss and tell the trader to shut it down is probably one reason that very few traders actually are profitable in real trading.

And to address @alberteinstein7's point that "This means that if you used the standard 1-2 percent risk management loss/trade, this would only be 2-4 ticks on the emini S&P...." Well, there are many different recommendations about how much of your total capital to risk, so 1-2 % may not be exactly a "standard," but if all you have is $2,500 in a real account, then yes, 2% is $50, which is 4 ES ticks (1 point) per contract.

I would say that a trader attempting this test will need to be very clear about the amount of loss they can take, given the size of their "capital", and it likely will need to be well over 2%. Let's say you think that you can withstand a loss of 4 or 5 points for a stop loss, that's $250/contract, a small amount for a stop, actually, but it's 10% of the $2,500.

A person is going to have to think carefully about this risk equation.

This is not meant as a comment one way or another on Apex or its rules. I don't even quite know what they are, actually. But I felt I should add something when the nominal face values of "50,000" and "150,000" are tossed around as if they are real numbers. Look at what you actually have at risk and consider, based on your familiarity with your own trading, whether you think you can succeed with the actual numbers you will be trading with.

Bob.

I want to be totally clear that my questions are not directed at Apex but the model used by them and other companies offering this service.
However, you need to ask yourself if you think that is best for the trader or the company?

it's best for both
a trailing drawdown is a type of consistency rule

so it's keeps the trader aware to respect reasonable loss limits
if profit target is 3k, and trailing drawdown is 2.5k

that looks very reasonable to me, not tight at all
it allows for an equity swing that's whopping 80% of the profit target.
That should never need to happen in the first place.

if you have 15 days for your evaluation, that's an average 200 profit per day.
Say that's also your loss limit. Then you need a losing streak of 13 days to reach your drawdown
You need to properly size your trades, it probably can be done with 2-4 micro's.

Know your risk parameters and chose the appropriate evaluation, or take none.
there's not much more to it.

You're aware that it's a trailing drawdown on unrealized profits, right?

What this means is that you can fail a Combine with your account being positive and even with a 100 % win rate.

Let's say you're up 2.5K on your Combine and you take on a trade that goes 1.25K in your favour, but quickly drops back to breakeven. You know only have 1.25 K of unrealized drawdown left even though you didn't lose any actual "money" on the trade.

Your account is still at 2.5K. Let's say you repeat the same mistake on your next trade. 1.25K of unrealized profit and then it drops back to breakeven.

You just failed the Combine even though your profit is at 2.5K and your win rate is 100%.

The way I manage my "intraday swing trading" I will often stop out trades for a small profit/loss aiming to capture bigger moves. This means drawdown on unrealized profits. It would not work well with a Combine like this.

For my scalping approach where I usually/ideally take profits on a high P&L with limit exit orders put in advance I could work with this rule.

Note: I'm not saying it's unrealistic to pass these evaluations. If you''re smart and good as a trader you can do it, but I maintain that it's a stupid rule when you can effectively lose a positive account that's making money.

Yes, I'm aware
I finished the eval and am now in the funded account.

The rule is simple.

Let's take your own example. You find it acceptable that
- you make 50% of your total profit-target only on one daytrade
- for an evaluation that lasts 10 days.
- you allow a trade that is +1250 to retrace to breakeven, therefore giving back 50% of your total profit target in 1 trade.

I don't think such a risk-savvy approach has longevity. Your exposure in trading has to be properly aligned with the size of the combine and allow for a string of losers or loss days.

I totally agree you have to be smart and well aware in trading and a lot of people will fail.
Question is what to blame: this rule or the traders' inability to properly manage risk.

As I stated in an earlier post, this rule allows for a whopping 80% drawdown of your profit target,
which in my opinion shouldn't at all happen in the first place.

Congratulations.



My example was a bit extreme, but not too far off from reality assuming a string of trades where you give back unrealized profits.
There's no loss on the account; just loss of unrealized profits. That's the key thing here.