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Self funded vs prop firm… truth behind it

  • #41
  • Dec 28, 2023 3:38am Dec 28, 2023 3:38am
Let me add my 2cents on this Prop firm/Self fund debate.

First of all, prop firm gives ordinary people who don't have $10k, $25k, $50k a chance to get into the trading game with very little risk.

Take FTMO for example. A $10k acct is $155, $20k acct is $250 and $50k acct is $345.
Now the rules are pretty straight forward, you lose your acct if your drawdown is 10%.
So if you are trading a funded acct challenge, you will lose your registeration fee.

But if you lose 10% your self-funded acct, you lose $1k in the $10k acct, $2k in a $20k acct and $5k in a $50k acct.
The risk is higher as a self funded trader.

People say 90% of prop firm traders fail. Well, isn't it the same for self-funded traders? What makes self funded traders special? NOTHING!
In fact, they tend to lose more because of revenge trading, over-trading to make back what they have lost.

Now let's say you are good and you profit from trading. Then every 4 months, you get to scale up your acct and draw your monthly profits from there. And even if you lose your funded acct, you don't lose 10% of what you had, but you lose only your registeration fees.

I believe a prop firm is a good starting point for those still trying to find their way around trading. It's like a demo but with a little risk.
  • #42
  • Dec 28, 2023 3:23pm Dec 28, 2023 3:23pm
Quoting MichaelSch
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.
Why?
  • #43
  • Dec 28, 2023 3:30pm Dec 28, 2023 3:30pm
Quoting cuchuflito
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.
How can prop firms protect against Black Swan?
  • #44
  • Dec 28, 2023 3:32pm Dec 28, 2023 3:32pm
I'm sorry, does anyone have actual experience collaborating with a prop firm?
If so, with which ones?
  • #45
  • Dec 29, 2023 12:01pm Dec 29, 2023 12:01pm
yeap the black swan means sudden movement of the price or market that like falling knife

in prop film , you just loss the 10% monthly or even daily loss 5 %

Well any losses of 5 % aday is huge in regular acct , 5 % on prop firm it pretty much $500
  • #46
  • Dec 29, 2023 12:06pm Dec 29, 2023 12:06pm
a good propfirn is the one dont log you in what they say of the max order size you have to obeyed .
yes overnight and week end , scalping , everaging , martingale , news trading leverage min 100;1 .
just make money every boddy happy , that or not less , they give you the horse , you do the jocky
  • #47
  • Dec 29, 2023 12:10pm Dec 29, 2023 12:10pm
before i go , you give them 500 theyy give you 100k , 100;1 leverge ,10 dd , 10 % gain . thats lotta lotta leverages on your side
  • #48
  • Dec 29, 2023 12:22pm Dec 29, 2023 12:22pm
Quoting Luciel1
before i go , you give them 500 theyy give you 100k , 100;1 leverge ,10 dd , 10 % gain . thats lotta lotta leverages on your side
read the first post.
stats are 17% traders pass and of that even less make it to payout.
You only have your daily drawdown limit as your account total. Because that is all you can lose in a day.
If you buy a prop firm challenge and pass it, youre now back at zero. You still have to trade to make a payout. Which many dont make it there.
So if you went self funded. Your $500 is what you have access too.
Trade higher risk if you want, but thats really what youre risking as a prop firm trader. Youre talking leverage, your account is what you have access to trade, rest is leverage. Sort of like those dangerous brokers people talk about that are 1:1000.
So self funded $500, this is your daily max you have access to, just like the 5% daily drawdown. So to pass you have to make youre daily limit 2 times to pass phase 1. Then phase 2 you have to another time
$500 self funded, 500-1000-2000 now past phase 1. 2000-4000 now passed phase 2.
You now have 4k to keep trading, which is almost the daily limit you have access to with you funded account.
Its all yours though, no one elses. You can withdrawl some and keep trading same risk or lower risk.
But prop firm youre not risking 1% a trade youre trading 10% overall access and 20% of daily limit. Youre actually trading really high risk with a firm but not know it. Its the mental game on how they keep attracting people and make you feel you can pass.
Save your money and trade 100$ self funded and run it up.
"Anger clouds the mind. Turned inward, it is an unconquerable enemy."
  • #49
  • Dec 29, 2023 12:53pm Dec 29, 2023 12:53pm
ok ok bottom line , cant pass the prop firm , sorry , those trader has problem with own acct too , so the 17 is real trader and the rest is xbox trader
  • #50
  • Dec 29, 2023 1:00pm Dec 29, 2023 1:00pm
let said $100 will give you 10k prop firm . you trade 1 % each trade , the prop give 10k with 100;1 leverage
so every time xecute an order 1% stop loss and 1% tp = 1;1 rr
unless they bought 30;1 leverages , then it is lossing momentum even at 50;1 leverages ... better to runn own acct
  • #51
  • Dec 29, 2023 2:39pm Dec 29, 2023 2:39pm
Quoting Luciel1
ok ok bottom line , cant pass the prop firm , sorry , those trader has problem with own acct too , so the 17 is real trader and the rest is xbox trader
That and the mental tricks behind it thinking youre only risking 1% of your capital.
Its in a sense also not helping traders get better.
I personally have been funded more then a few times and 5 figure payout before. I am just done on them and only do personal funds now. Once I realized the actual math behind it.
"Anger clouds the mind. Turned inward, it is an unconquerable enemy."
  • #52
  • Dec 29, 2023 2:40pm Dec 29, 2023 2:40pm
Quoting Luciel1
let said $100 will give you 10k prop firm . you trade 1 % each trade , the prop give 10k with 100;1 leverage so every time xecute an order 1% stop loss and 1% tp = 1;1 rr unless they bought 30;1 leverages , then it is lossing momentum even at 50;1 leverages ... better to runn own acct
Lower leverage is better lol. It means youre actually trading the proper risk.
1:30 leverage is the best really. Then you can only risk a smaller amount max at a time. AKA these proper traders lol. Leverage is another thing people fall for. Higher leverage is not a better thing.
"Anger clouds the mind. Turned inward, it is an unconquerable enemy."
  • #53
  • Dec 29, 2023 3:01pm Dec 29, 2023 3:01pm
I would say something about statistics.
do we know how much experienced are those failing to pass the challenge?
I mean… if I started trading 3 months ago, and try the challenge instead of funding a real account, I have few probabilities to reach the targets required.
So, in few words, statistics doesn’t really show you who are those who tried, why they failed, nor their background, nor anything else.
Just numbers and %.

my point is that prop firms can be good, depends on what you aim for.

Do you want to trade off a 50 or 100k or more account, caring about risk management and trade the markets with a good strategy to bring profits, but have not enough own money? Then prop firms is ok.

Do you want to trade off a 50 to 500$ account own money, with same risk management to see it growing to 2k or so in a year? Then prop firm is not for you.

do you believe you can build a 500$ account into a 50k in few months? Tell me how you did.
90% of traders use TA, indicators and prediction
  • #54
  • Dec 29, 2023 3:06pm Dec 29, 2023 3:06pm
Why having high leverage when trading off a 50k or more account?
even a 1:30 lev you can build a 13/15 lots position in forex and even more in CFDs.
thas

Thats 15k loss/profits x 100pips.
Lets say one is that good to be net +300 pips x month all full leverage 100% account. Would mean doubling a 50k account into a 100k.

i know that many thinks “hey I doubled and even tripled my account”
prop firms maybe don’t let you do that of course, that’s pure craziness.
90% of traders use TA, indicators and prediction
  • #55
  • Dec 29, 2023 3:10pm Dec 29, 2023 3:10pm
More about statistics

It would be good to share the source of data when speaking statistics.
I always find people using data, without any source.

That sounds like “a friend of a friend of my brother, said he has a friend who once spoke with someone whose friend told….”
90% of traders use TA, indicators and prediction
  • #56
  • Dec 29, 2023 3:21pm Dec 29, 2023 3:21pm
Hard to understand why most are looking at that account size like 50k 100k 200k … when in reality you only get a daily limit to trade… that’s all, always, that’ jail or slavery or you name it…, no matter the account size … if it is 100k and daily limit 5% it is the same if you have 10k with dl of 50% or 1m with dl of 0.5 … uou still have 5k in money dl.
If you trade smart that fee by the time you get funded that fee could grow bigger than the daily limit … and it is money in your account! Think about it, maybe this is what they really do! No one cares about 100 1000 fee if one don’t pass when the real money arrive from the ones that pass … and if profit split is only 10 or 20% for them … is like they really do charity for you? No… account grow exponentially on their side … and you get always a daily allowance …
do you really think that it is free money for you to trade … because just passed some challenges? … do they then say: yea, now this trader is a good one … what if you destroy the account just after reach the funded status? …

seriously now!
  • #57
  • Dec 29, 2023 3:30pm Dec 29, 2023 3:30pm
It sounds so nice … if I double 100k account in a year, nice payout … only maybe 10% a month .. with some holidays in between …
Sure! Maybe is not that hard but you have to do it in within a 5% daily, I mean daily = every day, limit … therefore is like you have 5k and have to reach 100k and never ever loose more that 5k in a day, that floating dd if you know what I mean!

have fun!

of course, in a 100k account of your you may reach 150k and then something happen and you have 20k drawdown and maybe you allow it … but here no! Not possible … if lost 5k in a day, out!
  • #58
  • Dec 29, 2023 5:10pm Dec 29, 2023 5:10pm
Quoting aa4fx
It sounds so nice … if I double 100k account in a year, nice payout … only maybe 10% a month .. with some holidays in between … Sure! Maybe is not that hard but you have to do it in within a 5% daily, I mean daily = every day, limit … therefore is like you have 5k and have to reach 100k and never ever loose more that 5k in a day, that floating dd if you know what I mean! have fun! of course, in a 100k account of your you may reach 150k and then something happen and you have 20k drawdown and maybe you allow it … but here no! Not possible … if lost...
forget 100k number.

Actually, the dd limit offered is real money.

Overall DD limit is 10k and daily DD is 5k . ( for 100k account )

Fee for this 100k is roughly 400 $.

Which is better to trade ?

400 $ or 5 k /10 k ?

Which allows/ offers better stop loss limit / trading lots ?
Intraday only.
  • #59
  • Dec 29, 2023 6:37pm Dec 29, 2023 6:37pm
Quoting aa4fx
It sounds so nice … if I double 100k account in a year, nice payout … only maybe 10% a month .. with some holidays in between … Sure! Maybe is not that hard but you have to do it in within a 5% daily, I mean daily = every day, limit … therefore is like you have 5k and have to reach 100k and never ever loose more that 5k in a day, that floating dd if you know what I mean! have fun! of course, in a 100k account of your you may reach 150k and then something happen and you have 20k drawdown and maybe you allow it … but here no! Not possible … if lost...
I don’t get the point in having more DD possible.
what makes you feeling better having more DD?

If you have 100k to fund an account, would you trade that account opening such a large trades or such a large non sense stoploss causing a 20k drawdown?! And what would you do at that point? I mean, you opened a 50lots trade and market goes against you: what would you blame first? The fact you opened such a large trade? Or the fact you allowed too large stop loss? Or would you blame yourself for misunderstanding of market in that move?
now, let’s assume you lose those 20k in just one trade, now what? Would you still be able to trade?

let’s do the same calculation with a 5k account real. You think you have best strategy ever made, and trading great in last months. But, suddenly you get a losing streak, market behavior looks strange, and suck you up 7 trades in a row.you are overleveraged and lose 400$ each. Lost 3,5k in no time, now what would you do? Will you be able to recover the now 2k account to the previous 5k?

There could be unlimited examples.

If you want to make money out of a trading account, you cannot ever consider having large drawdown. You have to think in %. And every seasoned trader will tell the same: risking more than 1% account on a trade is dangerous and could wipe you out. You are completely not considering all psychological matters involved in trading.
90% of traders use TA, indicators and prediction
  • #60
  • Dec 29, 2023 6:45pm Dec 29, 2023 6:45pm
Quoting navk
{quote} forget 100k number. Actually, the dd limit offered is real money. Overall DD limit is 10k and daily DD is 5k . ( for 100k account ) Fee for this 100k is roughly 400 $. Which is better to trade ? 400 $ or 5 k /10 k ? Which allows/ offers better stop loss limit / trading lots ?
Yes its 400
But in order to pass youre 400 becoes 800 becomes 1600 phase 1 done
1600 - 3200 phase 2 and funded. Also in this example, once your funded you almost have the amount you can play with for daily limit.

Now you have 3200, not just 400$ back and account back to break even.
Self funded will always trump prop firms. It took me a little to realize this, I even fought the idea in my head for so long.
Then I realized, well lets try self funded with higher risk. If I know I can pass challenges, I can handle higher risk lower funds.
In 1 month of trading I am already up 200%. Thats like passing phase 1...and onto phase 2.... but its all mine, no account reset. All funds mine at all times wighdrawl when you want.
If you trade self funded with account challenge fee, in 6 months you will be in a decent position.... but all funds yours and no need to rely on firms.
I have done this a few times before. 200 into 80k over 6 months. 200 into 8k over a month as well before. Then I got tricked into prop firms thinking that is what I was missing. NOPE, it just makes you trade longer with less cash overall.
Eventually you can taper back risk% but in the beginning while building 10% risk isnt bad until about 25k, then I dropped it to 5% risk.
"Anger clouds the mind. Turned inward, it is an unconquerable enemy."
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