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  • #11,341
  • Oct 8, 2022 4:24am Oct 8, 2022 4:24am
Passing rate translated to profit margin means that if 1% achieved an (average) payout it is 90%, 2% means 80%, 3%=70% and 4%=still 60% profit margin. That means on a 1% hit rate for the prop firm, traders who got a payout of all starters on challenges, the price for the challenge could be discounted 90% too to be breakeven. So the profit margin tells us the potential discount rate on a breakeven point for the prop firm, where they are breakeven in profits. So I am not surprised that offers like Autoproptrader with score about 12 and GoatfundingFX with score of ca. 14 are possible. And even EternityGlobalFX score of 25 is explainable. Hmm...?
  • #11,342
  • Edited 4:40am Oct 8, 2022 4:25am | Edited 4:40am
Quoting Takisd
Why live account traders at prop firms fail more than phase 1. A lecture by Takisd. When a user has a set target to trade, they will stop at said target. When there is no target, they are more likely to over trade. Conclusion: Traders can luck their way to live accounts, but when they have to trade a month, they fail. Live is by far the hardest part of the challenges. Its when your limits aren't defined, to think otherwise is a fault.
These days I trade for a certain percentage/day for live accounts in order to control greed
One can have 10 day plan, 50 day plan and 100 day plan for live accounts. .
Intraday only.
  • #11,343
  • Oct 8, 2022 4:47am Oct 8, 2022 4:47am
I want t o reject the rumors that everything above score 1 where DD=fee for instant funding models are scams. We all know and it is publicly disclosed for everyone that the majority of traders on brokers fail to make profits. Between 66% to 85% do loose, so let's take an average number of 75% as example here. That means, explaining the EGFX instant funding offer where the score is 10, where DD=10*fee, that out 20 traders, which means on 50k instant offer here total fees of $10k as initial profit for EGFX, only 5 traders make to a payout, because 75% failure rate on 20 people means 5 just survived. Now let us assume they make an average of 2% or 3% (lifetime) on this account, which still 20% or 30% based on 10% max. Drawdown, that based on 3% they make on a 50k account $1.5k profit*5 traders=$7.5k. So the profit for EGFX is still $2500 with all the realistic or conservative assumptions. There is no way anyone can tell us that only score of 1 (DD=Fee) is sound on instant funding offers.
  • #11,344
  • Oct 8, 2022 5:00am Oct 8, 2022 5:00am
Quoting navk
These days I trade for a certain percentage/day for live accounts in order to control greed
-I have a daily profit target that is very reasonable, that is based on account draw-down allowance. If I miss a day of trading, I do not worry about it. If I was not a scalper, then I would likely approach things differently.

The people that lose their accounts before their first payout are likely either:

1. Gambling/greedy/impatient
2. Trying to prove something
3. Lack knowledge, understanding and/or experience
4. A combination of the above

Losing an account after your first payout can happen to anyone, especially if you still lack emotional control and proper risk-management skills. This is especially true because once you secure your initial investment and remove all subsequent risk, then it may become more difficult to resist the temptation to over-trade.
  • #11,345
  • Oct 8, 2022 5:05am Oct 8, 2022 5:05am
Quoting TrAndy1
I want t o reject the rumors that everything above score 1 where DD=fee for instant funding models are scams.
-I am not so sure that people see them as scams. I think that many people just realize that they are not very beneficial to traders, especially when you compare them to other models.

Quoting TrAndy1
There is no way anyone can tell us that only score of 1 (DD=Fee) is sound on instant funding offers.
-Not entirely sure what you mean by this, but a direct funding model that is structured in a way where draw-down allowance is equal to or only slightly better than the participation fee, is actually a good thing for the firm, not only in terms of profitability, but also sustainability and longevity. I just wouldn't be interested, personally, because I have worked out the numbers, and they are not usually favorable for the trader.
  • #11,346
  • Oct 8, 2022 5:24am Oct 8, 2022 5:24am
Another interesting angle to look at those stats. If we assume only 2% ever make it past both phases on average:
MFF says they got about 5,000 new live accounts per month, this is 2% of 250k accounts. If the average cost of those accounts is $400, that's 100mil in a month. It's an over simplification but if it's anywhere near accurate this model is really good business for the founders.
  • #11,347
  • Oct 8, 2022 5:35am Oct 8, 2022 5:35am
Quoting Nsak3y
{quote}-I have a daily profit target that is very reasonable, that is based on account draw-down allowance. If I miss a day of trading, I do not worry about it. If I was not a scalper, then I would likely approach things differently. The people that lose their accounts before their first payout are likely either: 1. Gambling/greedy/impatient 2. Trying to prove something 3. Lack knowledge, understanding and/or experience 4. A combination of the above Losing an account after your first payout can happen to anyone, especially if you still lack emotional...
Same way as mine.
I target 1 % minimum for 3 to 3.5 % DD.
I wait for set up to achieve this.
Asian session very limited DD to get 0
4 to 0.5 %
LO I try another 0.4 to 0.5 %
I trade only GU.
This is applicable to funded accounts.
Challenge accounts I take more risk.
I am doing like this after blowing some funded accounts.
Intraday only.
  • #11,348
  • Oct 8, 2022 6:59am Oct 8, 2022 6:59am
Quoting Inception12
Another interesting angle to look at those stats. If we assume only 2% ever make it past both phases on average: MFF says they got about 5,000 new live accounts per month, this is 2% of 250k accounts. If the average cost of those accounts is $400, that's 100mil in a month. It's an over simplification but if it's anywhere near accurate this model is really good business for the founders.
Playing with the numbers (change red color figure and have fun!)
Attached File(s)
File Type: xlsx PropFirm.xlsx   12 KB | 372 downloads
- X -
  • #11,349
  • Oct 8, 2022 7:19am Oct 8, 2022 7:19am
I don't understand why some people say that the Instant funding model is so much worse or more difficult then the normal challenge model.

With normal challenge model you can only lose 5% in a day and with MFF that is equity and balance.

With some Instant funding models you can lose up to 8% or even 10%. Yes that is max. drawdown figure too

But with instant model I think it is vital to start very slowly and build a buffer so that you can lose the buffer amount and still be OK. I see with Stocknet Institute that you can keep the buffer on the account when they scale you.
  • #11,350
  • Oct 8, 2022 9:48am Oct 8, 2022 9:48am
Quoting Bizziebee
I don't understand why some people say that the Instant funding model is so much worse or more difficult then the normal challenge model. With normal challenge model you can only lose 5% in a day and with MFF that is equity and balance. With some Instant funding models you can lose up to 8% or even 10%. Yes that is max. drawdown figure too But with instant model I think it is vital to start very slowly and build a buffer so that you can lose the buffer amount and still be OK. I see with Stocknet Institute that you can keep the buffer on the account...
It's not more difficult, it's an outright ripoff. It offers no value and in most cases negative value to the trader.

Because the instant funding model charges you a fee which is equal to or sometimes MORE than the DD allowed. You are better off compounding that "fee" in your own personal account. The account size you purchase is irrelevant IN ALL MODELS, DD allowed is the actual size of the account.

If I say to you "give me $800, here is a a $750 account", how does that benefit you? But, when you make 10%, which in reality is 100%, I'm going to scale you 50%....now you would have $1600 and I'm giving you $1125.

It's all a marketing trick, with the no time limit, double you when you hit x%, etc, etc. If I give you a 10K account with 10% max DD and charge you more than 1,000 for it....you don't need me.
  • #11,351
  • Oct 8, 2022 9:54am Oct 8, 2022 9:54am
Quoting Bizziebee
I don't understand why some people say that the Instant funding model is so much worse
-If you follow chess, the math speaks for itself:

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  • #11,352
  • Oct 8, 2022 10:27am Oct 8, 2022 10:27am
shady to the max.. especially when US regulations do not permit cfd trading
really something to be concern of here
PDX adjusts risk, not scales..
  • #11,353
  • Oct 8, 2022 10:41am Oct 8, 2022 10:41am
Quoting PDX
shady to the max.. especially when US regulations do not permit cfd trading really something to be concern of here
I got two words for US regulations....first one begins with F
  • #11,354
  • Oct 8, 2022 10:44am Oct 8, 2022 10:44am
Quoting Nsak3y
{quote}-If you follow chess, the math speaks for itself: {image}
Exactly. Love this graph. Phase 10, you literally have 100K more in a personal account. But hey, no time limit on this model. There is no time limit on your personal account either. Every instant funding model works this way, with some worse than others.
  • #11,355
  • Oct 8, 2022 11:31am Oct 8, 2022 11:31am
Quoting Xperience
{quote} Playing with the numbers (change red color figure and have fun!) {file}
Sometime this year we had a long discussion on whether these firms need to send some trades through to the live market in order to remain profitable. I guess these stats really put that issue to bed, whether they do or not, they remain profitable. I guess it also means there shouldn't be much worry about the long term survival of the firms as well if regulators don't mess it up for us.
  • #11,356
  • Edited Oct 9, 2022 6:05am Oct 8, 2022 11:40am | Edited Oct 9, 2022 6:05am
Quoting pipmaster77
{quote} Exactly. ...Phase 10, you literally have 100K more in a personal account. ...
edit: the following post contains false assumptions and therefore is invalid. the blind spots where dissolved in later posts. feel free to ignore

Not True. Compound 198$ (initial investment) 11 times a 20% you have 2697$ not 100k.

After Phase 9 you would have accumulated ~120k withdrawing profits. If you put that in a private trading account the risk is on your side (10% = 12k).
If you trade the Phase 10 Account and loose 10% (and the account) you loose ZERO $.

20% private account of 120k = 24k profit with risking your own money.
20% Phase 10 account 486k = 48,6k profit (50% split of 97,2k profit) with ZERO $ risk.

If you are a successful Trader Prop Firms make sense.
For a Prop Firm it doesnt matter if you are succesful or not, they will be profitable either way.
Muni loves you all!
  • #11,357
  • Oct 8, 2022 12:16pm Oct 8, 2022 12:16pm
Quoting MuniFX
{quote} Not True. Compound 198$ (initial investment) 11 times a 20% you have 2697$ not 100k. After Phase 9 you would have accumulated ~120k withdrawing profits. If you put that in a private trading account the risk is on your side (10% = 12k). If you trade the Phase 10 Account and loose 10% (and the account) you loose ZERO $. If you are a successful Trader Prop Firms make sense. For a Prop Firm it doesnt matter if you are succesful or not, they will be profitable either way.
You're not understanding the math. View the graph again. When you are making "20%" with the firm it is against equity not available loss, so it is not "20%" in a personal account, but much more. The figures in that graph are EXACTLY the way it plays out.
Yes, I know prop firms make sense, I am funded with 4 of them. I use the ones that give me value vs. trading on my own. The INSTANT FUNDING model, however, has a negative value to the trader. If that is the model one plans on using, you will do much better trading it on your own. Available loss is the ONLY figure that matters here, in a personal account it is 100%, in a prop firm it is 10%. So if you earn 10% in a firm with 10% loss it would be 100% in a personal account.
  • #11,358
  • Edited Oct 9, 2022 6:01am Oct 8, 2022 12:51pm | Edited Oct 9, 2022 6:01am
Quoting pipmaster77
{quote} Available loss is the ONLY figure that matters here, in a personal account it is 100%, in a prop firm it is 10%. So if you earn 10% in a firm with 10% loss it would be 100% in a personal account.
edit: this post contains wrong calculations, it was corrected in later post. so feel free to ignore

private account optimum
1. 200 invest risk 200 gain 200
2. 400 invest risk 400 gain 400
3. 800 invest risk 800 gain 800
4. 1600 invest risk 1600 gain 1600
5. 3200 invest risk 3200 gain 3200
6. 6400 invest risk 6400 gain 6400
7. 12800 invest risk 12800 gain 12800
8. 25600 invest risk 25600 gain 25600
9. 50k invest risk 50k gain 50k
10. 100k invest risk 100k gain ..(well maybe now you run out of luck)
11. ZERO $

prop
1. 2000 prop risk 200 gain 200 (200 in the bank)
2. 4000 prop risk still only the initial 200 gain 400 (600 in the bank)
3. 6000 prop risk 200 gain 600 (1200 in the bank)
4. 12k prop risk 200 gain 1200 (2400 in the bank)
5. 18k prop risk 200 gain 1800 (4200 in the bank)
6. 32k prop risk 200 gain 3200 (7400 in the bank)
7. 54k prop risk 200 gain 5400 (12800 in the bank)
8. 108k prop risk 200 gain 10800 (23600 in the bank)
9. 162k prop risk 200 gain 16,2k (39800 in the bank)
10. 324k prop risk 200 gain 32,4k (71k in the bank)
11. 486k prop risk 200 gain ..(well maybe now you run out of luck)
12. still have 72k in the bank

So what is your prefered risk tolerance?
As a Risk Manager I prefer the Risk on the Outside Capital (Prop)
Muni loves you all!
  • #11,359
  • Oct 8, 2022 1:14pm Oct 8, 2022 1:14pm
Quoting MuniFX
{quote} private account optimum 1. 200 invest risk 200 gain 200 2. 400 invest risk 400 gain 400 3. 800 invest risk 800 gain 800 4. 1600 invest risk 1600 gain 1600 5. 3200 invest risk 3200 gain 3200 6. 6400 invest risk 6400 gain 6400 7. 12800 invest risk 12800 gain 12800 8. 25600 invest risk 25600 gain 25600 9. 50k invest risk 50k gain 50k 10. 100k invest risk 100k gain ..(well maybe now you run out of luck) 11. ZERO $ prop 1. 2000 prop risk 200 gain 200 (200 in the bank) 2. 4000 prop risk still only the initial 200 gain 400 (600 in the bank) 3....

You hold my views on the instant funding.

They serve a purpose because of the fact that people will eventually lose their account. With most of the instant fundings you get to scale AND get paid. Not paying yourself is like a major reason retailers fail at fx.
  • #11,360
  • Oct 8, 2022 1:19pm Oct 8, 2022 1:19pm
Quoting MuniFX
{quote}As a Risk Manager I prefer the Risk on the Outside Capital (Prop)
As far as I understand it, you have a mistake in your prop assumptions/calculations. On the 2000 prop account where you risk 200 you need to gain 400 (instead of only 200) in order to double your balance. From that 400 you usually get 50%, i.e. 200. If you apply the same gains to the own account you need to change the numbers to: risk 200, gain 400, put 200 to the bank, and continue with 400 in the next step.

In this case, both scenarios grow with the same pace and lead to the exact same amount in the bank.
Money is made by sitting, not trading
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