kenshin replies to: Prop firms offering retail traders trading accounts -Risk free


Upfront monthly fee = scam. Period. JMHO.

Technically not a scam, but they do obfuscate their business model:

They would like you to believe that they make their money by:

1) finding great traders who don’t have capital
2) giving them capital to trade
3) taking a share of the profit.

The reality is that they want the trader to lose and their rules are designed to facilitate losing. They will make their money by:

1) Collecting monthly fees regardless of whether the trader wins or loses.

If you think about it:

1) They advertise as looking for great traders. Why would a great trader not have capital to trade? I’m expected to believe that all the great traders are broke, wtf!!! It’s exactly the same wtf I have as the one where Commercial Member is selling their 100% perfect ea because they’re broke too. Everyone Commercial is a fantastic trader, and a master fucking ea programmer, but what the fuck, they’re all destitute as well. Come on man, it’s so lame it’s not even funny any more. No, prop firms are not looking for great traders, they’re looking for ANY traders, preferably losing traders. They won’t get great traders, because great traders won’t need the captital. Great traders already have capital, and they won’t be interested in trading any amount of prop capital with such a ridiculous profit share arrangement and monthly fee agreement.

2) Why are there rules such as no trades over the weekend and no trades between certain times. These are designed to make the trader lose. What, did forex magically stop being 24/5 now. As pf mentioned the rules are designed to make the trader break them, therefore breaking the contract and losing further money. As for weekend gap bullshit, great traders don’t leverage so high that a weekend gap is dangerous. Actually I have trades open over most weekends for the last ten years, no problem for me.

3) High minimum profit per month rule, combined with low maximum drawdown rule. Nobody can reliably make 5% per month every month with maximum 10% drawdown. You want to make minimum 5% per month for years, then expect to see 20% or higher drawdown somewhere within 3 years.

4) Why are you required to use their account platform? Perhaps it’s because there is no real money being traded? Maybe it’s because it allows further price manipulation to skew the trader further towards losing?

5) What are the specifications of a great trader. The ability to trade, right? Why isn’t the prop firm interested in the traders history then? Nope, they’re just interested in them monthly fees. Wonder why that is?

Prop firm, sounds so professional. Nope, just a legitimate way to make any trader (profitable or not) bleed out slowly with monthly fees.

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