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There are prop companies where you pay for the fees and there are prop companies where you don't. This is not APEX specific. E2T f.e. has a different model where you would have to pay professional fees.
Since most prop firms only let you trade a live sim, it looks legit but those fees are likely sort of fake, because in reality you likely don't pay the exchange fees and other stuff, except the few who are really trading live. Includes also bank transaction fees and similar, so it is not black and white, though.
I think there is little doubt that most prop firms make 95%+ of their money via fees and not via profit split. So their real interest is to make you fail f.e. by nudging you into overleveraging. To me, all those prop firms are money grabs and they are not really interested in traders, only fees.
BUT the thing is that in some situations using a prop firm like APEX can make sense. Everybody needs to crunch the numbers himself and study the rules and limitations to figure out, if it makes sense in his situation.
One potential benefit is capital preservation as long as you are still learning. Evaluation and funded accounts are offering a real challenge and are closer to trading a live account from the psychological perspective. You can lose a lot of money in the markets as a new trader - but you can also do a lot of resets burning the same amount of money with a prop firm. If you are disciplined enough, a prop firm can be a good next step after the initial sim learning phase, though.
And even for aspiring traders it can make sense to buy f.e. a bunch of accounts in a sale, pay f.e. like 100 bucks for access to 2500 USD each in the case of a 50k (or 170ish if lifetime). It makes sense to crunch the numbers to figure out which account gives you the most bang for the buck, but keep in mind that trailing ratio gets worse the bigger the account. Because a 50k has only 2500 to trailing (and only "buy power" like 50k). The 150k has 2x the trailing but 3x the goal and the 300k has over 6x the goal and only 3x the trailing.
So especially if an aspiring trader uses copy trading, he can quickly boost his available trading capital.
And last but not least, trading in live markets can be stressful to some traders. IMHO just having the option to "refill" your live account with money from withdrawals can take away some of the psychological pressure.
Most prop firm setups (E2T is an exception) are based on being a contractor, which might have some tax implications. And while some initial payouts are without split, later the split does play a role. So consistent traders will likely aim for a payout to fund a live account in the end anyways.
The rule only makes sense in this instance because they allow multiple accounts. If they banned that, and instead focused on a scaling account, then this wouldn't be an issue.
Any firm that doesn't allow scaling(higher max contracts as your balance grows) is clearly against the trader. It would be in their benefit to let profitable traders scale up, so questions are raised when they have a range of fixed account sizes.
A competitor Tradeday only has 2 account sizes, I don't remember the prices or sizes but the idea is that you can scale the account up as your balance increases. They also allow you to trade real money once you are funded. Earn2Trade also allow you to scale with the trader career path. So with these companies there is zero reason to have multiple accounts.
Compare this with companies that put you on sim and allow multiple logins, then have an elaborate set of traps to trip you up once you are funded. This tells me everything I need to know, they have rigged the game against me as it is not in their interest for me to succeed.
Some of the traps I've seen are:
Scaling plans once funded - by this I mean that they make you start small, even if your max contracts for the account is high. One accidental click on the wrong button, go over your contracts and you lose the account.
Live trailing drawdown - it even trails unrealised PnL. You lose drawdown even with profitable trades. I.e you open a trade, get to $1000 in profit, it pulls and you exit at $500 profit, but because you didn't close at the peak you have lost $500 of drawdown. Very hard to keep track of this in a live market.
XXX amount of days before you can take some of your profit, and you lose your entire profit if you break a rule in that time.
XXX amount of profit you can withdraw.
Trades they won't pay out on(Apex has rules on this, if they don't fit in your plan they won't pay).
Rules against trading news events, not allowed 5 minutes before and after etc.
There's probably more but you get the picture. For me, I wouldn't consider going with one that doesn't allow you to trade real money for the reasons above. A good firm will want you to succeed so that it benefits both of you.
Look, those prop companies are just a tool that you can use if it benefits you.
Most of them only focus on fees and not the traders, so they will put rules in place that benefit them.
They would never say it openly, but if you crunch the numbers it is quite visible that most of the money is from fees.
As I get it the predecessor of ONE UP/MES was trying something "real" and it did not work. Lets be realistic, most traders are undisciplined and would use any prop company a ton of money, if they would not protect themselves.
So IMHO they simply took the easy way of paying out the few successful traders with the fees they make on all the unsuccessful ones. But that way their interest also is mainly that traders fail.
Markets are zero sum either, so the Big Boys make their money by screwing up retail traders trading live. So in the end there is not much difference. Retail traders lose money in the markets directly or to a prop firm.
As I wrote I have several friends that trade with APEX and other prop companies and got paid and/or still get paid. Some because they are still not consistent enough, some because they calculated the ROI and use it to boost their live account. If you are a good trader you can make money with a prop firm and directly in the markets. But especially for people with little money to spare, a prop firm can be their only way to make it in the markets.
I haven't traded with prop firms using futures for a while but I recently posted an experiment that I did some months ago while being funded with Earn2trade (see below), basically I proved that the trades actually went to the real market.... so the fees that these companies require are legit to me. They ask you to pay the datafeed which is quite expensive if you are considered a professional investor. This datafeed goes to your personal name.
Hello everyone,
I recently found a video that I made some months ago when I was funded by Earn2trade, I made it with the idea to post it but for some reason the audio was not right and it needed some editing. Today I settled it and I decided to post …
There is the option to trade live sim in one step of the E2T career path. You do not pay fees in that case, what is cool. But otherwise they let you trade for real. That is why they have strict rules.
Other companies make it easier to get the target but then only let you trade live sim.
This guy says he's taken out over $800,000 in the last 30 days. Has taken out over $1M over the last year, including multiple resets. Do you believe him?
What I can say is that it looks like generally the vast majority of APEX PA accounts does not make it to payouts. I guess the same is the case for most prop firms.
Most experienced traders I know eventually lose some of their PAs and requalify others, but have also withdrawals so are now net positive. But I guess the vast majority is not.
Not sure about 800k in one month, but one of my friends withdrew 38k a month and just yesterday she made over 10k in her PA accounts and aims for close to 80k withdrawals in February.
Trading: CME Futures & US Treasury Bonds Futures (week) and Bitcoin (week-end)
Posts: 88 since Feb 2021
Thanks Given: 95
Thanks Received: 65
Whilst funding firms are fighting among themselves blusky.pro is miles ahead quality wise, others just have the marketing right, but Blusky popularity will catch up because they are offering what other firms don't.
- EUREX market
- Live funds (your orders appear in the books) with no Daily/Weekly Loss Limits past Trailing Drawdown
- No minimum days for any withdrawals
- No consistency rules when funded, you trade however you like, no minimum trades holding time either
- Free Level2 data for both EUREX and CME
Trading: CME Futures & US Treasury Bonds Futures (week) and Bitcoin (week-end)
Posts: 88 since Feb 2021
Thanks Given: 95
Thanks Received: 65
I mostly agree with VirtualMark, even thought I would not mention or promote Canadian Futures Affiliate website
Topstep is expensive, not scalper friendly, also "micros products are considered full-sized lots in the Topstep® program. For example, 1 lot in ES is considered the same as 1 lot in MES in regards to the Scaling Plan."
