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FTMO - For serious traders

  • #7,921
  • Sep 3, 2021 5:34pm Sep 3, 2021 5:34pm
Quoting Kevitsch
{quote}Although this draft contract initially only provides for an activity via a so-called demo account, “after successfully testing [your] skills” you would like to pursue a corresponding “commercial activity”. In general, in so-called “propietary trading”, it is common for a company to provide the so-called “propietary trader” with equity capital, with which the latter purchases or sells financial instruments on the basis and within the limits of a contractual agreement. I assume that after the end of the trial phase, as a trader, you will...
You don't. You will be managing a simulation. You are basically selling information to FTMO, its consulting service. Then they can do whatever they want with the info, its clearly written in the contract. Trades might or might no go to real market.

With FTMO we are fine I believe, I'd be concerned with other prop firms as they claim their accounts to be live.
  • #7,922
  • Sep 3, 2021 5:38pm Sep 3, 2021 5:38pm
Quoting lynnc
{quote} If you did, for example, if they put the live funded account there for you to trade (and withdraw from), then you would need to be registered for financial services, otherwise not.
This. Even if it was live (technically none of the account with these props is, not even if every trades go to real market), account is managed by the prop firm as its internal to its infrastructure. Its very much unlike a trading account with a bank or broker and you get the credentials to manage it by a third party.

Its more like you are hired as a collaborator and get appointed to a task, that is, trading execution.
  • #7,923
  • Sep 3, 2021 5:42pm Sep 3, 2021 5:42pm
Quoting HammerHeart
{quote} This. Even if it was live (technically none of the account with these props is, not even if every trades go to real market), account is managed by the prop firm as its internal to its infrastructure. Its very much unlike a trading account with a bank or broker and you get the credentials to manage it by a third party. Its more like you are hired as a collaborator and get appointed to a task, that is, trading execution.
I say all of us trading with prop firms move to a tax free country, hang out on the beach, trade and drink cervezas.
  • #7,924
  • Sep 3, 2021 6:05pm Sep 3, 2021 6:05pm
This is what CONSOB (Italian BaFin) has to say about copy trading, basing on ESMA mifid regulations:

https://translate.google.com/transla...e-d3195ac7caf7

Basically says if copy trading is fully automated the service if portfolio management and you need authorisation. If client (like FTMO does) has to approve whether trades are to be copied or not its generic financial advisory.

In italy, financial advisory is regulated whereas "generic" can be provided by anyone.

I think that pretty much sums it up.
  • #7,925
  • Edited 7:03pm Sep 3, 2021 6:08pm | Edited 7:03pm
Quoting pipmaster77
{quote} I say all of us trading with prop firms move to a tax free country, hang out on the beach, trade and drink cervezas.
I think we are good if the money sum is small. If it get serious it might draw attention and at that point is best to set up company ashore and pay yourself via dividends.

BTW the ESMA sounds confused herself about the topic. Portfolio management by definition implies the clients puts money into your hands, like you are depositing them into an account. Then about automated portfolio management says its portfolio management too.
  • #7,926
  • Sep 3, 2021 7:13pm Sep 3, 2021 7:13pm
Quoting HammerHeart
This is what CONSOB (Italian BaFin) has to say about copy trading, basing on ESMA mifid regulations: https://translate.google.com/transla...e-d3195ac7caf7 Basically says if copy trading is fully automated the service if portfolio management and you need authorisation. If client (like FTMO does) has to approve whether trades are to be copied or not its generic financial advisory. In italy, financial advisory is regulated whereas "generic" can...
I think this is actually only regarding the Broker not the Trader, who gives the signals.

But that's no problem for FF Trader because they only use their own equity and don't take foreign capital.

The above rather counts for broker like etoro that offer their clients to follow other traders, automatically tracks their trading and triggers orders in name of the client...
  • #7,927
  • Sep 3, 2021 11:24pm Sep 3, 2021 11:24pm
Quoting Kevitsch
{quote} I think this is actually only regarding the Broker not the Trader, who gives the signals. But that's no problem for FF Trader because they only use their own equity and don't take foreign capital. The above rather counts for broker like etoro that offer their clients to follow other traders, automatically tracks their trading and triggers orders in name of the client...
I've been looking into this further. Applies to any mirror or copy trading. ESMA considers any automated copy trading portfolio management.

There are three parties, the trader, the platform, and the client. If trader also provides the platform (using a trade copier) then hes performing portfolio management and thats regulated.

Unless client has control over execution. In that case its general recommendations.

https://www.signalmagician.com/copy-trading-regulation/


However as per 3.1.3 of ftmo account agreement, its not even that. Its just a simulation, you get paid for basically playing a computer game. It has been deliberately designed that way around regulations.
  • #7,928
  • Edited 1:40am Sep 4, 2021 1:16am | Edited 1:40am
Quoting HammerHeart
This is what CONSOB (Italian BaFin) has to say about copy trading, basing on ESMA mifid regulations: https://translate.google.com/transla...e-d3195ac7caf7 Basically says if copy trading is fully automated the service if portfolio management and you need authorisation. If client (like FTMO does) has to approve whether trades are to be copied or not its generic financial advisory. In italy, financial advisory is regulated whereas "generic" can...
The important part there is that it says if you are offering those services to the public and we are not. That is the difference. If you were to advertise yourself to the public to trade their account, or FTMO advertised on their site that they needed investors to fulfill their traders, then regulation comes in.

A friend of mine spent 10 years trading on behalf of 1 person with a lot of money for a commission. He made an awful lot of money himself and paid taxes in full. He never had to be regulated because the public were not involved or asked if they wanted to invest by either party. it was a private contract between the 2 of them until he retired last year.
  • #7,929
  • Sep 4, 2021 6:25am Sep 4, 2021 6:25am
Quoting lynnc
{quote} The important part there is that it says if you are offering those services to the public and we are not. That is the difference. If you were to advertise yourself to the public to trade their account, or FTMO advertised on their site that they needed investors to fulfill their traders, then regulation comes in. A friend of mine spent 10 years trading on behalf of 1 person with a lot of money for a commission. He made an awful lot of money himself and paid taxes in full. He never had to be regulated because the public were not involved or...
Yes, private contract. The contract changes things a lot. The problem is prop firms forces the trader to set up as a business providing a service, hence the regulation. If the trader was employed or the contract was the kind of a collaboration between the parties there would be no issues. Anyone can mandate anyone to do something on his behalf. But with prop firms you are doing it as a commercial service, thats different.
  • #7,930
  • Sep 4, 2021 6:39am Sep 4, 2021 6:39am
Quoting HammerHeart
{quote} Yes, private contract. The contract changes things a lot. The problem is prop firms forces the trader to set up as a business providing a service, hence the regulation. If the trader was employed or the contract was the kind of a collaboration between the parties there would be no issues. Anyone can mandate anyone to do something on his behalf. But with prop firms you are doing it as a commercial service, thats different.
FFS people are unnecessarily over analyzing this. The independent contractor model is literally used by thousands of businesses all over the world for decades. This isn’t anything new.

Nobody is “forcing the trader to set up as a business.” You can set up however you want to pay yourself via private contractor or via LLC, etc.

A lot of this hand wringing and navel gazing can be simply addressed by a local qualified tax professionals vs baseless conjecture on a web forum.

I see the same nonsense on some of the Prop Firm Facebook groups. Suffice it say a majority of people who are twisting themselves into knots over how to handle their taxes, have yet to close a profitable trade. And chances are never will.
Trade with confidence, trade without fear.
  • #7,931
  • Sep 4, 2021 7:41am Sep 4, 2021 7:41am
Quoting Cryptosurf
{quote} FFS people are unnecessarily over analyzing this. The independent contractor model is literally used by thousands of businesses all over the world for decades. This isn’t anything new. Nobody is “forcing the trader to set up as a business.” You can set up however you want to pay yourself via private contractor or via LLC, etc. A lot of this hand wringing and navel gazing can be simply addressed by a local qualified tax professionals vs baseless conjecture on a web forum. I see the same nonsense on some of the Prop Firm Facebook groups. Suffice...
but I want my prop firm to pay my social security, insurance, tax and more. I am lazy to do the work it takes to be financially independent.
  • #7,932
  • Sep 4, 2021 7:53am Sep 4, 2021 7:53am
Quoting Cryptosurf
{quote} FFS people are unnecessarily over analyzing this. The independent contractor model is literally used by thousands of businesses all over the world for decades. This isn’t anything new. Nobody is “forcing the trader to set up as a business.” You can set up however you want to pay yourself via private contractor or via LLC, etc. A lot of this hand wringing and navel gazing can be simply addressed by a local qualified tax professionals vs baseless conjecture on a web forum. I see the same nonsense on some of the Prop Firm Facebook groups. Suffice...
You are most likely right but I've already got in touch with local accountants and they were clueless. Ill need to look online.
  • #7,933
  • Sep 4, 2021 10:18am Sep 4, 2021 10:18am
Quoting HammerHeart
{quote} You are most likely right but I've already got in touch with local accountants and they were clueless. Ill need to look online.
Keep searching. All that people need to ask is the tax consequences paid via a private contractor. Full stop.

People don't need to have them rule on the business model or the minutia of the day to day operations of the firm. Nearly every major country has or had brick and mortar Prop Firms. People were paid out the same via private contractor. Virtual prop firms are no different.
Trade with confidence, trade without fear.
  • #7,934
  • Sep 4, 2021 12:25pm Sep 4, 2021 12:25pm
FTMO Team, why does the 'FTMO-Server' server keeping freezing up during major news events? Last week when U.S. Fed Chair Powell gave his speech, my FTMO MT4 platform froze up with no data refreshing, prices not changing, and every button being non-operational. I literally could not even close/restart the MT4 platform. This happened two days ago during the U.S. non-farm payroll announcement as well. My FTMO MT4 platform froze up and I could not do anything.

During these news events I had 14 Purple Trading MT4 platforms open, and they all worked properly...while my FTMO MT4 platform froze up and crashed. Please advise the FTMO IT team that 'FTMO-Server' server cannot handle the load and traffic during major news events.
  • #7,935
  • Sep 4, 2021 1:17pm Sep 4, 2021 1:17pm
Every country has self employment laws, they are very clear. If you are contracted independently the cause of the income is irrelevant in any first world country. So you just file as self employed income. If you have an existing job, the higher earning of the two becomes your main income and the other secondary and off you go.

Most people think too hard about this question thinking they are going to break some tax law which doesn't exist. You earn income, you put into your tax filing, you pay the difference of paid vs unpaid tax and voila.

Source: In the 8 countries i've lived in they have all been the same.
  • #7,936
  • Edited 11:00pm Sep 4, 2021 10:49pm | Edited 11:00pm
Hi all

Is it possible to start a challenge on a 100:1 account and then flip over to the 30:1 (swing) once verification is completed?

There doesn't seen to be any reason to take a challenge using the swing option as the objectives are identical.

Unless the weekend / news policy is now enforced on the challenge?

Apologies if this has been answered before.

Cheers
  • #7,937
  • Sep 5, 2021 12:55am Sep 5, 2021 12:55am
Quoting C-12
Hi all Is it possible to start a challenge on a 100:1 account and then flip over to the 30:1 (swing) once verification is completed? There doesn't seen to be any reason to take a challenge using the swing option as the objectives are identical. Unless the weekend / news policy is now enforced on the challenge? Apologies if this has been answered before. Cheers
Yes I am doing that. I asked support about changing to the swing because I really don't want to have to watch out for news and they said it doesn't matter during the challenge and verification and this was their answer:

Unfortunately, you cannot switch over while you trade your FTMO Challenge or Verification. Nevertheless, you do not need to worry as there are no disadvantages in the FTMO Challenge and Verification. News trading and holding overnight and over the weekend are allowed in the Evaluation Process so there is no need to switch to a Swing account type.

We can process the conversion once you sign the FTMO Account Agreement so that your new FTMO Account converts to the FTMO Account Swing. You will be able to request the change while signing your agreement.
If you have any other concerns, feel free to contact us again.
  • #7,938
  • Edited 10:24am Sep 5, 2021 8:52am | Edited 10:24am
Quoting lynnc
{quote}Yes I am doing that. I asked support about changing to the swing because I really don't want to have to watch out for news and they said it doesn't matter during the challenge and verification and this was their answer: Unfortunately, you cannot switch over while you trade your FTMO Challenge or Verification. Nevertheless, you do not need to worry as there are no disadvantages in the FTMO Challenge and Verification. News trading and holding overnight and over the weekend are allowed in the Evaluation Process so there is no need to switch...
Thanks for the reply.

To FTMO - How about increasing the 30 day challenge time limit as an incentive for people to choose the 30:1 swing option?

Perhaps make the swing account challenge up to 60 days to swing trades to set up and hit targets using lower leverage positions?

Just an idea.
  • #7,939
  • Sep 5, 2021 9:45am Sep 5, 2021 9:45am
Quoting C-12
{quote} Thanks for the reply. To FTMO - How about increasing the 30 day challenge time limit as an incentive for people to choose the 30:1 swing option? Perhaps make the swing account challenge up to 60 days to allow longer term trend trades to set up and hit targets using lower leverage positions? Just an idea.
Since the option to trade a Swing account with lower leverage I tend to agree with this idea as FTMO wants 90 days of trading combining the Challenge and Verification. How about just 45 and 45 instead of the 30 and 60 days? Good suggestion C-12.


Dave
K.I.S.S.
  • #7,940
  • Edited 10:21am Sep 5, 2021 10:06am | Edited 10:21am
Quoting fmsfx
{quote} Since the option to trade a Swing account with lower leverage I tend to agree with this idea as FTMO wants 90 days of trading combining the Challenge and Verification. How about just 45 and 45 instead of the 30 and 60 days? Good suggestion C-12. Dave
It makes sense doesn't it? A swing trading challenge with a 30 day time limit is a bit of a misnomer.

60 challenge / 60 verification sounds reasonable to me. If people complete it faster then that's a bonus.

I believe there are some new prop firms that don't have a time limit at all.
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