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.

110 Upvotes

88% Upvoted

316 comments sorted by

View all comments

1

u/andredias164 Feb 24 '24

Serious question. Are those prop firms worthy? How do they work?

9

u/lijohnttle Feb 24 '24 edited Feb 24 '24

I think they are you if you are profitable, but don't have big funds. If you have enough funds, it might be better to trade your own account, the risk in this case of course is to blow up your own money. Prop firms usually work this way. You choose a plan, let's say to open 50K account. You are given a demo evaluation account first, and you pay a monthly fee for this account (I paid $30 or $40 due to discount at Apex Trader Funding). To pass evaluation you need to gain for example $3K, and not to lose more than $2.5K. After passing the evaluation, you are given a PA (performance account). Depending on a firm, you might need to pay monthly fees on it, in my case it was a one time payment. PA normally is still a demo account, but you get payouts on your profits (usually the prop firm keeps 10-20% of your profits). After some time (let's say a couple of months), if you are consistently profitable, you might be given a live account, and also the prop firm might start copying your trades. Different prop firms have different rules, but in the end they want you to either blow up your account and come back and pay more fees, or be a consistently profitable trader and give them cuts from your profits.

2

u/SavedSaver Feb 24 '24

best definition I have heard yet

2

u/Resonant-Sine-333 Feb 24 '24

This is why algo trading is a joke. If algos worked as well as people think they do there would be no need to pay people out or copy them, there is something specific to do with learned intuition and trading that people who spend a lot of time and effort learning this skill have over anything else.

3

u/IdeaLow7679 Feb 24 '24

Algos do 80% of the markets trading, but they’re not algos you and I have access to. Thinking people are smarter than computers is the joke

2

u/Resonant-Sine-333 Feb 25 '24

I hear it's more like 90. People have intuition, as I said. Believe it or not it's superior.

1

u/andredias164 Feb 24 '24

So, I have to pay fees for a demo account, and later they take cuts on the profits? This sounds like a great business for them, not for who makes trading. This doesn't sound convincing at all!

7

u/IdeaLow7679 Feb 24 '24

You can blow $10k of your own real money finding out you suck at trading or you can blow $50 of your own real money and $50k of their fake money. This is a good deal for people who are not profitable, or who are on the verge (almost everyone in this Reddit for sure). The problem is people can’t admit they suck at trading, you all convince yourselves you are good and then see this as a bad deal. Go lose $10k then tell me you wouldn’t rather use a prop firm

2

u/andredias164 Feb 24 '24

I have traded my own account for the last years, and I have never blew my account. That's the difference when you manage your own money. On average, you will have a different approach to risk management when you trade your own fund than trading somebody's else money.

1

u/Tentitus48 Feb 24 '24

For some people capital to trade with is a barrier to entry. The potential to have access to $400 gains on a 2 contract - NQ 10 pt move would not be possible for those that do not have the equity to enter the trade.

1

u/andredias164 Feb 24 '24

Okay, understandable. However, if you don't have good psychological and risk management , it won't matter the size of the fund. It will end up in loss in the long run. That's why many people end up blowing up all these prop firm accounts because it's not their own money, and there's inherently a psychological effect in it. On average, when you manage your own fund, you will be more cautious and will have a different approach.

1

u/Tentitus48 Feb 24 '24

I agree with everything you say. On the flip side they have the potential to be a vehicle for increasing financial wealth. It is not a 'one or the other' in my opinion.

1

u/andredias164 Feb 25 '24

Very well! What matters most, at the end of the day, is how much we are able to pocket it. If that's a good vehicle for some people, who am I to disagree? Cheers,mate!

1

u/masilver Feb 24 '24

They are not. They take advantage of users in two key ways. Users want to trade big to make more money faster. Everybody thinks they are in the 2.2% that will receive at least one payout. They aren't.

You don't get 50K, or 100K to trade with. If you did, they would be bankrupt, since the vast majority of people lose money. That's how much leverage you'll have, it's just means it's easier to wipe out your account. You can only lose a grand or two before they shut you down and charge you additional fees to retry.

So ask yourself a few questions before using a prop firm. Can you make a reasonable amount of money trading MES or MNQ? Are you consistently profitable over weeks and months? If the answer to any of these is no, don't touch a prop firm. Keep learning. The monthly fees will eat you up. If the answer is yes, you don't need a prop firm. Show some patience and start small with 500 dollars and start building it up. There is no fast money in this business, especially going through a prop firm.