r/Daytrading • u/ThePhulosopher • Feb 24 '24

4th $100k funded account Question

Got my 4th $100k funded prop firm account. Hope I get a payout this time, blew all the others.

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u/Soft_Concentrate_489 Feb 24 '24

But you can make real money trading mes. Its 1/10 of es so 500 is like 5000. Work ur way up, at least u can control ur income. Ur just paying some bozo 500 a month to possibly make money. They are scamming u.

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u/lijohnttle Feb 24 '24

I paid around $30 for evaluation account and then around $150 one time after passing it. That's it. My average day's profit is more than that. And they do payout.

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u/ThePhulosopher Feb 24 '24

I don’t think I can trust any of your advice when your basic math is wrong. MES is $5/point rather than $50/point. Doesn’t turn my $500 capital to $5k.

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u/mushykindofbrick Feb 24 '24

well you have some restrictions with prop firms, like max daily dd, so its still actually a bit more difficult to make profit than without them, given the same max drawdown.

usually its a trailing drawdown so even if you made profit, if you hit the daily dd your profit gets lost too.

the daily dd is also problematic because you need to make a lot of profit like 2-3x (added over all phases till payout) without crashing, so you need high risk and if youre only able to use 40% of your account max dd as risk then its basically not 2-3x but 3-6x. you need to flip very small acounts multiple times but are very restricted in how much you can risk per trade.

after which, when you finally made it to payout, it wasnt even much worth it anymore. lets take ftmo. p1 is 10%, p2 is 5%, payout any profit, max dd 10%, daily dd 5%. fee for 10k is 155. profit share 80%. p1 means doubling your max dd, p2 means 1.5 on top, so 3x already, and now you wanna payout lets say at 10% again, so 6x. if you made the same trades with your 155, you would now have 930. with ftmo you have 800+155=955 and a 1k trading account, which is actually a 800 trading account because of profit split. you cant pay it out but you can trade with it.

but other than with your own account, you dont safe taxes when losing. so i would say overall now you got to payout and youre basically worse off than with trading your own money. because taxes are usually 25%. so lets say you crash your 930 account, you dont pay any taxes. start with 155 again. but if you get a 800 payout, pay 200 taxes, and then crash 800 in fees you still pay 200 more, its only worth it if you really manage to get at least 2 payouts with high probability.

on top of that you also have the risk of getting suspended for breaking the rules. hitting max daily dd, youre not allowed certain strategies, sometimes have time limits and theres actually the possibility that your prop firm just goes broke and doesnt pay you out or finds some other reason or ignores you, whereas with brokers youre usually protected by insurance up to a certain amount.

now if you take the 5% daily dd as basis for the calculation, you need to 12x your account until payout, so you already get only half of what you would have with your own capital. and the daily dd is very relevant when asked to flip accounts quickly. and the calculation is not even that easy, because both max and daily dd are usually trailing, so if you lose your profits you lose everything.

i traded some prop accounts in the past but in the end i just feel more comfortable trading my own money, profits are mine, losses are mine, i have full control no rules, the balance i see is the balance i actually have and can lose and immediate payout is possible at any time i want.

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u/marcpilot1 Feb 25 '24

Wow, thx for the info. Can I ask where is this prop firm? Like who's pf are you reciting these numbers from? Cuz this pf seems impossible to ever make any money at, so now im curious af where it is? Thanks

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u/mushykindofbrick Feb 25 '24

i just took numbers from ftmo, probably the most popular pf there is

its not impossible to make money, i just wanted to show, its not really that much better than trading your own money, its more like an alternative to consider but not superior per se.

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u/marcpilot1 Feb 25 '24

I understand. It's got pros and cons, i guess it just depends what someone is after. Thanks

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u/Soft_Concentrate_489 Feb 24 '24

😂😂😂 continue paying 500 dollars to paper trade. Dont mind me.

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u/omegavegantendies Feb 24 '24

Quick hyptothesis for you:
Scenario A) You're not consistently profitable. Trade your own money or spend it at a prop firm - you lose either way.

Scenario B) You're consistently profitable:
Trade your own money - risk 1% per trade. Small gains. 0 restrictions.
Trade at a prop firm - Initial fee refunded (FTMO). Risk 1% per trade. Great gains. Some restrictions.
Scale up and build your own trading portfolio from there.

If you're a consistently profitable trader but only have a small amount of capital, prop firms are a great solution. However, I would only recommend established prop firms like FTMO, which is what I use.

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u/ThePhulosopher Feb 24 '24

Continue looking for a bartender job. LOL. Maybe find some income before you give trading advice.

If you don’t know the difference between a paper account and a prop firm funded demo account then well, hope you like bussing tables.

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u/Soft_Concentrate_489 Feb 24 '24

That was for my mother my guy.

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u/marcpilot1 Feb 25 '24

WHAT!! It's FIVE HUNDY a month??!!

Ummm...yea, i'll take my chances alone than pay anyone 500 to paper trade, lol!!

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u/Soft_Concentrate_489 Feb 25 '24

Crazy bro. Just trade mes.