I have two funded accounts for now with one of the livesim firms, although I have not made a withdrawal yet because of their minimum active trading days rules, once I'll make a withdrawal I will report back.

Now from what I've gathered so far there are two business models:

Real live account: Firm makes money on profit splitts so they will encourage withdrawals, the bigger the better for them.
Livesim accout: Firm makes money on subscription fees, reset fees and activation fees, they will generally delay or discourage big withdrawals with some antics.

Most livesim funded accounts are never replicated to a real live account, it's not an automatic process nor guaranteed, it's up to the firm discretion to replicate trades live, so I highly doubt even 10% of livesim funded accounts are replicated to a real live account, so the company doesn't make any profit from the profit splitt on probably more than 90% of livesim funded accounts.


Livesim do have a few pros however:

- You can have 20 accounts in copy trading and not affect the real market with your size
- You don't have to be considered as a professional trader (when funded on Topstep for instance you must), in some countries to trade other people funds you have to get licensed otherwise you'll get fined and shut down.

That's about it lol

Now livesim is fine if the funding firm is net positive on subscription fees, reset fees and activation fees compared to payouts.
But you manage those firms as if it's risk (of going under, changing rules, etc...) and diversify, get accounts in at least one real live account firm and accounts in at least 3 livesim firms, and of course your own brokerage account that you fund with the profits that you can hopefully withdraw in a timely manner from your funded accounts.





Livesim firms usually have a 30% consistency rule for payouts, your biggest day PnL can't amount to more than 30% of your total PnL to be eligible for a withdrawal...




Found out about BluSky this week-end, check them out.
They put you in a live account once you pass the evaluation, funds are segregated, and you can call a contact in the introducing broker (Sweet Futures) once you're live to manage daily stop losses and such.
Daily loss limit is kind of tight for my taste at first but once you're funded and past the trailing drawdown it's possible to modify it.

@VirtualMark forgot to update on withdrawal like I said, I have been paid out around $20k with EliteTraderFunding (livesim).

That's good to know, thanks for the update. I have read some horror stories on Trustpilot for various livesim firms, such as ghost orders being created while they were logged out, that blew their account once they have built up a large balance. But I have no way to believe if that's true or not, could be that those people left orders on their charts. I did it when I started out.

Mind if I ask, have you built up a fairly large balance yet? And are you able to draw out 100% of your funds if you choose?

Thanks.

So this is a 2-part discussion I think. First is the legitimacy of livesim firms and second is livesim vs live.

1. I feel like going with any of the top livesim firms is a pretty safe choice for now. Regulation is going to kick in soon, because this market is in a bubble right now, but that should be fine for the top firms. This is a hugely profitable business model - basically a new form of gambling and so many gamblers have moved fom online casinos to prop trading. People spend $1000's a month on resets. They have no idea what they are doing, but the dream that these prop firms are selling is so well put together that I can see how it might be hard to resist throwing another $100 at a reset just to get "a fresh start" and "this time it's definitely going to work". Most gamblers are simply chasing that one lucky trade while burning through $$$ on resets like there is no tomorrow.

I only wish that these people (gamblers, what-have-you) were trading live so they would be directing all of this new found liquidity to the markets as opposed to sending it to a select few individuals running these firms. And prop firms are huge business - some of the top ones are probably doing $300-500M+ in revenue a year with huge profit margins. So it's a bit of a shame that all of that liquidity is going to waste.

2. Livesim vs live. Pros and cons.

Pros of live accounts: I chose a firm that only has live funded accounts because their rules are simple. No withdrawal restrictions (it's real money and it's readily available so it makes no sense to restrict anything), no bullshit rules designed to "help you" blow up your livesim account before you can withdraw any of those paper profits.

Cons of live accounts: most of the time you have to pay professional data fees so about $120/month if you trade ES and NQ, etc. Not an issue for me as that's peanuts, but it could be an issue for some people. Another con of a live funded account is you can't have many/copy trade. Again I don't care about any of that so not an issue for me. The allure of copy-trading can be a double edged sword and for most people it simply leads to larger overall losses due to account scaling. Some will disagree and that's fine - whatever works for them!

Pros (debatable/depends on your needs) of livesim "funded": can use copy trader/trade many accounts, no data fees, quicker account setup (usually instant since it's just a sim instance vs 3-4 days for live funded accounts).

Cons of livesim: ridiculous withdrawal rules/limitations that are there only to protect the bottom line of these prop firms. Literally no other reason. Also you don't gain any live trading experience as there are still subtle differences no matter how good your sim settings are. Potential trust issues: everything from fills to slippage, etc is just a setting that livesim firms can tweak as they see fit. Won't be a problem for 99.99% of traders as they are never going to make large sums in livesim anyways.

Another consideration: prop firms don't care if you blow 1000 "funded" livesim accounts - you can always start over. It's what they want you to do anyways. Now firms that actually put you in a live trading account do care - when you blow up, they lose real $ and often times you can't just resubscribe and start from scratch. They will want to review your trades and make a decision to let you try again or perhaps ask you to take a break, practice and come back in 3-6 months (if ever).

Live account firms are the way to go obviously but another con they have that isn't often talked about is that in some countries you have to be licensed and registered by your national financial regulatory body to manage other people's live funds.

That's interesting. Do you have any specific examples that you know of?

That's interesting. Do you have any specific examples that you know of?

So to trade as a contractor through a prop firm (firm owns master account, you own a sub-account as a contractor) specifically? Or some other definition of "trading other people's money". Because that could mean many different things.