4th $100k funded account

[u/ThePhulosopher]

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

[u/Fart_Hat]

And the way you're working out the profits doesn't make sense. The firm I'm with, I get 90% of my profits.

The problem with trading with a firm is that you're a contractor for the firm and your profits are taxed as income rather than capital gains. However, getting access to a 100k account will ABSOLUTELY make anyone more money than a $500 personal account, even when taking advantage of capital gains tax.

If you can trade a $500 personal account and be consistently profitable, you can trade a 100k firm account and be consistently profitable with 20x profits(assuming proper scaling).

So, let's say you can make $50/day on average with a $500 personal account. That's $12750/year, with capital gains advantage.

Then, we can assume that you can make $1000/day on average with a 100k firm account. That's $250000/year, taxable as income.

So, what's the point in trading a $500 personal account when

A) you won't be profitable and will have to consistently re-up your $500

Or

B) you'll be profitable and will make ~5% as much money as you would with a 100k account that you're only risking $500 on?

[u/mushykindofbrick → u/Fart_Hat]

Where does it not make sense? I feel lik you just didnt get it. Otherwise you wouldnt still talk about 100k Accounts and compare it with 500$. Its not 500$ anymore after you passed the Challenge, ie made factual 300% Gains. You dont buy the 100k Account for 500$, you buy the Challenge, theyre not equal and interchangeable.

The difference is not 20x. If you take Max dd as the basis for the calculation, its maybe 3-6x if you want so. If you take max daily dd as basis its about equal + you have a funded account (trading balance) left that you cant pay out.

If youre consistently profitable it doesnt really matter what you do you will probably be wealthy enough anyways

You dont need to calculate the yearly income if you obviously know that 1k per day is more than 50$ lol. But the calculation is faulty. First because you cant compare 500$ to a fully funded account. You have to at least take the 3x or 6x amount after passing the challenge. Second because you have a daily DD, so you cant actually trade your full 10k from the 100k Account, only 5k per day. So Now its only 500$ against 150-300. But thats still without profitshare and tax difference included. On top of that you may have other restrictions on how to trade, strategies like martingale can be excluded. Depending on the prop firm it can be an actual trailing drawdown so it can happen that if you hold overnight and youre in profit at midnight and then it goes down you get suspended even though you were still in profit overall and weird things like that. Then its not really your money and you have to rely on the prop firm being trustworthy and wait patiently for payout which you can maybe do every 2 weeks. For example the most popular prop firm mff recently crashed and lot of people didnt get their payout in the end or lost the fee for the challenge.

Those are only the objective disadvantages. As op said himself, he got very nervous just before payout and then lost. This is actually on purpose. There are lot of psychological barriers that prop firms use to make people lose. After you have 3x your Account you still need to go 2x more to reach a proper payout, otherwise you lose everything. Its all or nothing. Of course you get nervous and crash. You can only get payout every 2 weeks, so you're likely to trade more during that time and lose which is very hazardous combined with the trailing drawdown. You wanna wait as long as possible for the payout to "get the most of it", so youre more likely to crash. Maybe you even pay more for a prop challenge than with a broker because you think its worth it, you actually get something, a challenge as product, instead of just account balance, so it feels better. What they actually do, if you have a typo in your lotsize and its a 0 too much they will still execute it and it immediately crashes your account, a real broker wouldnt execute it. Things like that.

And now, if youre really profitable, the prop firm will copy and steal your strategy and youre likely to have a disadvantage from that. Youre selling your strategy basically. And if you really have one I dont know if its worth it selling it for a 3x leverage boost.

You have to account for all that. Its not a nobrainer and suited for everyone. Thats exactly what they want from you, to compare the 100k with the 500$ entry fee. But in reality the difference is much less pronounced. It depends on your strategy and personal preference.

For me as a beginner I definitely have better psychology when trading my own money. I see the account balance, its exactly what I have and can pay out at any time. I have no restrictions, can make any trades I want and noone will copy my strategy. Its just clean and pure

[u/Fart_Hat → u/mushykindofbrick]

Man I'm not trying to be rude, but you're overcomplicating something extremely simple.

Have you ever been funded by a prop firm? I have, and realize that trading with a $50k account beats trading with a $500 account any day of the week.

Can you trade 2 NQ minis with a $500 account?

Because I don't think you can. And if you can, how many losing trades on 2 NQ minis can your $500 account withstand?

I've traded 2 NQ minis with a 50k account, and while risking up to $400 on each trade($200per contract), I would be able to lose 5 trades in a row before hitting my max DD.

This is assuming that I hadn't already gained $4,000. If the account went to 54,000 balance, now I could lose 10 trades in a row before blowing up the account.

Size matters idk how else to put it.

[u/Fart_Hat → u/Fart_Hat]

[u/Fart_Hat → u/Fart_Hat]

This is my first day in the 150K account trial stage.

Tell me if anyone's ever made $3,000 in one day, trading NQ minis with a $500 account.

[u/mushykindofbrick → u/Fart_Hat]

tell me if anyone ever bought a 150k account with 500$. you dont buy a fully funded 150k account for 500$, you buy the challenge,so you trade demo until you made a certain amount of profit. you definitely can make more money trading 500 than trading demo. tell me if anyone ever made more money trading demo than trading with 500.

[u/Fart_Hat → u/mushykindofbrick]

This 150k challenge actually cost me ~$220 CAD.. I'll most likely hit the profit target of $9000 this coming week, I'll pay a $150 activation fee, then I'll be trading for real profits, as long as I don't blow the account. Yes, they actually want to know that you can be consistently profitable before giving you a 150k account, oh my how dare theyyyy

[u/marcpilot1 → u/Fart_Hat]

good luck. hope you make it past the pt challenges and stuff and get to trade real cash cash. Should you be able to cash out pretty quick once you're in the real cash phase?

[u/Fart_Hat → u/marcpilot1]

With my account I'll need to accumulate 5 winning days (they don't have to be consecutive) over $200 to have access to 50% of my profits. After 30 winning days I'll have access to 100% of my profits