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Self funded vs prop firm… truth behind it

  • #21
  • Dec 19, 2023 1:01pm Dec 19, 2023 1:01pm
Quoting OBsayMkMoney
Sheesh.. all this loss talk. Deflating my Quann
"Anger clouds the mind. Turned inward, it is an unconquerable enemy."
  • #22
  • Dec 19, 2023 1:05pm Dec 19, 2023 1:05pm
The average prop firm trader according to FE, the trader loses about 10 challenges before passing one. They share the stats and people still chase it thinking theyre the 10-20%
Why not be the 80-90% who keep funds themselves, have all allocation each day available and up your personal risk.
1% funded is like 20% self funded wen you look at max daily drawdown. Its all you have to play with.
Risk 10% a trade self funded aim for 1:3 even 1:2 and you will be amazed how quickly you can grow an account.

This week alone I have doubled my self funded account using this risk formula.
"Anger clouds the mind. Turned inward, it is an unconquerable enemy."
  • #23
  • Dec 21, 2023 11:29pm Dec 21, 2023 11:29pm
Quoting The-Flipper
{quote} I don't wanna go into the discussion of "unrealistic" or the "gambling" part. For a trader with edge it's definitely doable in a couple of months.
Older post I bring up here but noticed this flipping frenzy idea. Anyone who would reads posts like this and new at trading. Just completely ignore it. This is why people go into 500k debt etc. If you read listen to any veteran trade living off of trading there is 0% chance he would be gambler if hes a actually living off of trading.
  • #24
  • Dec 22, 2023 5:48am Dec 22, 2023 5:48am
Quoting RickM
Professionals mainly study their winning trades and try and improve their trading execution
A professional trader's prime objective is to preserve capital. I would therefore argue that your statement is not entirely correct. You learn most from your mistakes not from your successes. Therefore, you should rather look at your losses. The winnings take care of themselves. If people were more concerned with what you can actually control in trading (your risk) then the statistics of unsuccessful traders would certainly not be as disastrous as they are.

The problem is this get-rich-quick mentality and viewing trading as some kind of game and not as a serious business (which it is). Most of the people I see here (99.9%) seem to have absolutely no plan for anything. But big egos and lots of words without facts and evidence. Traders who focus their importance on how many trading monitors they have hanging on the wall, how many great indicators adorn their charts, traders who argue more for emotional satisfaction than for their financial interests.

These modern prop trading companies do nothing different than most brokers or casinos. They make money from the losers who act without a plan.

To stay on topic. I think trading is very individual. Everyone has different goals and willingness to take risks. There is no “better”. That's why some people see an advantage in using a prop trading company, while others don't. In the end it doesn't matter at all, as long as you achieve your goals with what you do - perfect.
  • #25
  • Edited 10:12pm Dec 22, 2023 9:54pm | Edited 10:12pm
Quoting lddd
{quote} A professional trader's prime objective is to preserve capital. I would therefore argue that your statement is not entirely correct. You learn most from your mistakes not from your successes. Therefore, you should rather look at your losses. The winnings take care of themselves. If people were more concerned with what you can actually control in trading (your risk) then the statistics of unsuccessful traders would certainly not be as disastrous as they are. The problem is this get-rich-quick mentality and viewing trading as some kind of...
Hi Iddd

Then you are learning to become a loser if you waste time with unprofitable trades, you are thinking like an amateur. You may be correct to think that way early on in your trading career but once you learn your craft, that thought process has to change if you want a winning mindset.

Yes their role is to protect their equity at all costs but honestly they aren’t wasting their time studying losing trades, the stop losses take care of those.

They are studying their winning trades to find a way to improve their trading execution. 80% of their time is spend on developing their edge, not becoming a better loser.

They are working on become an unconsciously competent winning trader who is emotionally exuberant human when they win a trade. They celebrate loudly when they win yet show little emotion when they lose.
Happy Emotions locks good trading habits into your subconscious which leads to a person developing their trading edge. Look for any good trader, they smile a lot and not those emotional zombies books paint them as.

If you are still learning from your mistakes, then you have no trading edge yet - patience hopefully will reward those traders.

Cheers
Trading thin liquidity at the boundary of the charts
  • #26
  • Dec 24, 2023 9:57am Dec 24, 2023 9:57am
Quoting RickM
If you are still learning from your mistakes, then you have no trading edge yet - patience hopefully will reward those traders. Cheers
Look at any professional in any field, eg. sports. It hasn’t to be trading. They will tell you they improved most by learning from their mistakes.

It doesn’t has to be looking at mistakes all day long, that’s not what I mean…

Who cares about winning trades and trade execution if you constantly will keep making the same mistakes?

But it you know any professional trader who thinks differently, feel free to refer me to such person and I will ask them myself.
  • #27
  • Dec 24, 2023 11:54am Dec 24, 2023 11:54am
Hi everyone, I’m not posting since long time and came in this thread looking for some ideas and views about the prop firm thing.
I see all the points discussed as of now and all of them are interesting.
The good thing about prop firms is they give you the possibility to trade with pretty heavy size trades without risking your account in one single trade,
Let’s say a challenge costs 500. If you trade consistently you can soon have them back together with your profits made from an 50 or 100k account so with enough trade size to withdraw some good 2-3k or even more x month, risking very little as 0,5% x trade.
If you send those 500 in an account and trade them safely, the difference is huge! The same 0,5% risk means you have to trade mini micro small lots and to withdraw some profits could take some 2/3 years.

I believe it’s a good opportunity for those who have not own capital, but still they are good traders.

Let’s put this way: with a small account you can learn trading, but trading requires you to withdraw money otherwise it’s just stress, pressure, frustration, hope and so on. If over this, you can withdraw a a 5k x month or more, things get different.
90% of traders use TA, indicators and prediction
  • #28
  • Dec 24, 2023 11:56am Dec 24, 2023 11:56am
Quoting lddd
{quote} Look at any professional in any field, eg. sports. It hasn’t to be trading. They will tell you they improved most by learning from their mistakes. It doesn’t has to be looking at mistakes all day long, that’s not what I mean… Who cares about winning trades and trade execution if you constantly will keep making the same mistakes? But it you know any professional trader who thinks differently, feel free to refer me to such person and I will ask them myself.
Hi Iddd

You have this all wrong.

Just because you know why you lost a trade and can see the mistakes you just made, that does not mean you have a solution to fix these issues.

So you would have me spending hours and hours of my time finding bad trades I have taken and hoping to find a way to make them profitable.
Thats thinking like a loser and I may have no fuckin idea why I lost those trades.

Professional traders, sports stars, famous people spend time improving their edge they already have in life.
Why would a musician who has just produce a grammy winning album go back to the rubbish they wrote years ago and look for an improvement to that horrible music. No, they take note for their recent successes and build from that music.

Avoiding mistakes is best learned by deciding to copy recent success rather than learning how to be a better loser.

If you want a name PM me.
Trading thin liquidity at the boundary of the charts
  • #29
  • Dec 24, 2023 12:16pm Dec 24, 2023 12:16pm
Trading a prop account may say about the trader that has trading skills but also the cruel truth that it is lacking big time business skills!
Trading own money = the fee for the funded account, instead of looking to get funded, it will make more money, way way more money that what would get from the funded account.
Make the calcul in a smart way and you'll notice how those traders are nothing else than some employees of those firms ... meaning that they get super less that what could have had, even if payout is 80-90% ... vs trading own money.
I only can guess that the reason is that all them get blinded by those 6 digits of the account that they can get, but in reality they only have a daily allowance available forever.
  • #30
  • Dec 24, 2023 12:37pm Dec 24, 2023 12:37pm
Quoting RickM
{quote} Hi Iddd You have this all wrong. Just because you know why you lost a trade and can see the mistakes you just made, that does not mean you have a solution to fix these issues. So you would have me spending hours and hours of my time finding bad trades I have taken and hoping to find a way to make them profitable. Thats thinking like a loser and I may have no fuckin idea why I lost those trades. Professional traders, sports stars, famous people spend time improving their edge they already have in life. Why would a musician who has just produce...
True.
But let me tell you a quick story.
There are some few rules one has to learn in order to be consistently profitable:
Trade what you see…
Don’t over trade…
Don't revenge trade the market…
and so on.
You can study them on a book, or here in some threads.

BUT

Everybody knows … you ll learn what they truly means only once the cost of them will be that huge for you that recovering from that will require a lot of time. That day and only that, one will realise the importance in understanding and learning from mistakes is.

I personally believe mistakes in trading is not about getting a SL then see market going your favour and reaching where your target was and while you are locked in front of the screen unable to even think about clicking again the button… the mistake is getting the stoploss, reversing the trade thinking market reversed. Getting another stoploss, feeling anger, reversing again just to see market bouncing opposite again and at this point the loss is that big you start increasing size and revenge, completely out of control and wiping huge money. THIS i think is THE mistake to learn from. Well, one of many possible btw.
90% of traders use TA, indicators and prediction
  • #31
  • Dec 24, 2023 1:39pm Dec 24, 2023 1:39pm
Quoting RickM
{quote} Hi Iddd You have this all wrong. Just because you know why you lost a trade and can see the mistakes you just made, that does not mean you have a solution to fix these issues. So you would have me spending hours and hours of my time finding bad trades I have taken and hoping to find a way to make them profitable. Thats thinking like a loser and I may have no fuckin idea why I lost those trades. Professional traders, sports stars, famous people spend time improving their edge they already have in life. Why would a musician who has just produce...
It feels like you misunderstood my words. Sure, having a winning mindset helps and is important too.

See all the winners here on the forums who mainly concentrate on discussing their cherry picked winning trades.

My point I tried to make is that if you do NOT have any kind of success in the first place there is nothing to worry about trying to improve it.

Merry Xmas to you / I will leave it at that

cheers.
  • #32
  • Dec 24, 2023 3:29pm Dec 24, 2023 3:29pm
Quoting HiddenGap
{quote} Not so sure about that. If you put $5,000 into an futures trading account (and you should be trading futures, not spot fx. Period), you lose it and you are out $5,000. If you buy a $150,000 "evaluation" for $250 (this is not what they cost - they're less, but this will work for the math's sake). You can purchase 20 tries : (250 X 20 = 5,000). Now we know the funded account is not the "headline number" it's actually only equal to the drawdown allowed. Let's say, $3,000. So 20 X 3000 = 60,000. Therefore, You can lose...
Sorry to go Off-Topic here, but did you cook up those statistics?

Where to I find a prop challenge of 150K for only $250 or less as claimed?

First, I can't even find a 150K challenge offer, and 2nd, prices are way higher, for example.

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It takes a lot for me to IGNORE you, but you can try.
  • #33
  • Dec 24, 2023 5:15pm Dec 24, 2023 5:15pm
Quoting ChilledT
All fair enough. However, you omit one very important difference between prop and self-funded, and that is the psychological issue of it being your own capital, or not. This is HUGE, and that is what prop firms are selling, the ability to trade free of the fear of losing one's own money (bar the challenge fee of course). It is pointless comparing identical equity curves from prop and self-funded accounts, because they will NEVER be the same, based purely on the psychological difficultly of trading one's own capital.
Unless you are trading without leverage, we are all trading with money that is not ours. For example, a person paying a fee of 100 to get 10000 capital and trading at 30:1 leverage is no different than a person with 100 own capital trading at 3000:1 leverage. If both fail, they will lose 100 each.
  • #34
  • Dec 24, 2023 8:25pm Dec 24, 2023 8:25pm
Quoting Erebus
{quote} Sorry to go Off-Topic here, but did you cook up those statistics? Where to I find a prop challenge of 150K for only $250 or less as claimed? First, I can't even find a 150K challenge offer, and 2nd, prices are way higher, for example. {image}
Erebus, it is the discount industry and many firms also known as whitelabel sell discounts to the many who lose.

Merry Christmas
  • #35
  • Dec 24, 2023 11:28pm Dec 24, 2023 11:28pm
Psychology is important. Some people feel the pressure when trading the paper trade.
Trading is gambling. So gamble responsibly.
  • #36
  • Dec 26, 2023 11:36am Dec 26, 2023 11:36am
Quoting Sovy
Psychology is important. Some people feel the pressure when trading the paper trade.
Psychology in trading is not at all important; mathematics is. 99.99% of people here can't calculate something as simple as 2+2. This is the problem. Even if you improve your understanding of 'psychology', the fact remains that you don't know mathematics. Once you realize your lack of basic mathematical skills and work on improving them, you'll forget all this nonsense about 'trading mood' and other irrelevant matters.
Observer effect
  • #37
  • Dec 27, 2023 6:14am Dec 27, 2023 6:14am
Quoting ryuryu
{quote} Psychology in trading is not at all important; mathematics is. 99.99% of people here can't calculate something as simple as 2+2. This is the problem. Even if you improve your understanding of 'psychology', the fact remains that you don't know mathematics. Once you realize your lack of basic mathematical skills and work on improving them, you'll forget all this nonsense about 'trading mood' and other irrelevant matters.
ok true, mathematics is important, can’t deny this.
I’m more about “you can calculate your risk, your entry your everything, but if you are unable to hold the trade till the target and unable to cut the damn losing one, your account will wipe out”
90% of traders use TA, indicators and prediction
  • #38
  • Dec 27, 2023 6:27am Dec 27, 2023 6:27am
Buy when cheap sell when dear, and if you have a metric to define when it is cheap or dear, you're in.

I like live because i can manage the drawdown. I can't do the same as well in a prop.
Trading is gambling. So gamble responsibly.
  • #39
  • Dec 27, 2023 9:55am Dec 27, 2023 9:55am
If you have no money to trade, do not trade. Earn money in real life first, cut some out you would spend for silly things. Take that money on the sideline and if that collected money are "big" enough for a account, do invest it without any emotional bias. Say yourself, that money was gone before, for all silly things, now that money can be a chance for trade back and more.

I never ever would spend money for that prop firms.
Perfection is the enemy of good enough!
  • #40
  • Dec 27, 2023 10:30am Dec 27, 2023 10:30am
The biggest advantage of Prop is the protection from Black Swan.
The fact is many make a lot of money with Broker accounts, and many do the same with prop.
The key is having an edge and specialization.
The fact is we should be all studying charts, and not wasting time writing here.
Happy Holidays.
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