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  • #5,581
  • Nov 18, 2021 10:25am Nov 18, 2021 10:25am
Quoting Koop
I see the reasoning behind it.
-Absolutely. If they are not pushing trades to a live market, then their reasoning is crystal clear.

Some people believe that all of these prop firms are operating like a ponzi, but I actually believe that MFF pushes trades to live market. Just my opinion.
  • #5,582
  • Nov 18, 2021 10:37am Nov 18, 2021 10:37am
Quoting Nsak3y
{quote}-Absolutely. If they are not pushing trades to a live market, then their reasoning is crystal clear. Some people believe that all of these prop firms are operating like a ponzi, but I actually believe that MFF pushes trades to live market. Just my opinion.
I agree on MFF
  • #5,583
  • Nov 18, 2021 10:54am Nov 18, 2021 10:54am
Quoting Takisd
{quote} Wow a whole 4 years experience, must be a real professional.
They probably made a couple of Bitcoin trades on Robinhood which of course makes them seasoned professionals
Pride always comes before destruction.... -Proverbs 16:18
  • #5,584
  • Nov 18, 2021 11:19am Nov 18, 2021 11:19am
Quoting pipmaster77
{quote} I would agree 100% with that statement. FTMO is great as far as credibility, longevity, trading conditions, etc. I also am 100% that they are executing in a live environment somewhere, somehow. However, they are definitely structured where the fees are a MUCH LARGER revenue component than MFF. I believe, once MFF is 100% automated and works some bugs out, they will be clear #1.
They're using their industry leader bully position to shake out more $ from a huge influx of hopefuls, and since it's such a huge influx, they know they'll still get a steady stream of best of the best (or at least temporarily best). To me this feels like they're trying to just achieve fast profit targets, like quarterly earnings, as opposed to building a long term sustainable enterprise, a sort of headlong dive into Darwinian speed-profiteering.
  • #5,585
  • Nov 18, 2021 11:24am Nov 18, 2021 11:24am
Quoting Fagin
{quote} Yep, I think so unless FTMO change tact. With this outbreak of suppliers of simulated MT4 accounts (I can't bring myself to call them Prop as they are not) they are creating a race to the bottom undercutting the sign-on fees and offering discounts, etc. So is this really a viable business in the foreseeable? Not sure but the demand certainly seems very high, I'm guessing they blow their money and use the gamblers fallacy to open another account and blow that one, then onto the next etc.. It's a bit like an expensive recurring lottery ticket!...
You know it's just incredible how easy it would be to wipe the floor with these guys just by running a firm that is 100% upfront, supportive and non-gimmicky/tryhard, and just honestly trying to combine capital with profitable traders instead of trying to run a Darwinian failure fee-collecting farm. Like any firm that actually shows itself to be different would attract so much positive marketing for free. But I guess in our society/economy ripping off idiots is the quickest way to capital gains.
  • #5,586
  • Nov 18, 2021 11:44am Nov 18, 2021 11:44am
Quoting Expo33
{quote} They probably made a couple of Bitcoin trades on Robinhood which of course makes them seasoned professionals

They graduated with a degree in altcoin philosophy.
  • #5,587
  • Nov 18, 2021 11:45am Nov 18, 2021 11:45am
Quoting Nsak3y
{quote}-Absolutely. If they are not pushing trades to a live market, then their reasoning is crystal clear. Some people believe that all of these prop firms are operating like a ponzi, but I actually believe that MFF pushes trades to live market. Just my opinion.
Initially I thought it was a ponzi but with experience I believe that's a viable business, based in specific metrics resulting from collected fees and failed challenges / enough to pay the profit splits and make a business profit. If that's a ponzi it's a slow one but I don't think so.

Out of curiosity, what's your thoughts when you say that they may be sending trades to live market, knowing that most of prop trades lose money ? What would be the reasoning for that ? At the end they would end up losing what the traders lost (or a % of that). Just trying to understand your comment.
  • #5,588
  • Nov 18, 2021 12:02pm Nov 18, 2021 12:02pm
Quoting Capablanca
Initially I thought it was a ponzi but with experience I believe that's a viable business, based in specific metrics resulting from collected fees and failed challenges / enough to pay the profit splits and make a business profit. If that's a ponzi it's a slow one but I don't think so. Out of curiosity, what's your thoughts when you say that they may be sending trades to live market, knowing that most of prop trades lose money ? What would be the reasoning for that ? At the end they would end up losing what the traders lost (or a % of that). Just...
-If no real trading is happening (or selling of data etc.), and traders are paid solely by profits that are generated from new signups, then by definition, it is a ponzi.

To answer your other question, I will quote MFF:

Quoting MyForexFunds
We make money in a variety of ways and have always been transparent about it.

1) Users participation fees cover our expenses to operate as a business

2) Traders who reach the live trading accounts or accelerated accounts trade on our liquidity accounts and we execute trades according to our own risk profile. Its a little more complicated than A book / B book that you are likely to reply with. We generally execute all orders that can be filled in the market and then manage risk on the other side using our proprietary accounts. For example, if we think someone is a bad trader, we may trade short when they are long or vise verse.

3) Proprietary trading account profits from trade data. On top of taking risk out of our book we also may increase position size of successful traders to get more out of the market. As we have grown we have a lot more traders who we are doing this with than in the beginning and its becoming a model where we are starting to consider lowering our intake of new business. We aren't quite there yet, but sometime in 2022 we may start only taking new business in sporadic periods.
  • #5,589
  • Nov 18, 2021 12:28pm Nov 18, 2021 12:28pm
Quoting Nsak3y
{quote}-If no real trading is happening (or selling of data etc.), and traders are paid solely by profits that are generated from new signups, then by definition, it is a ponzi.{quote}
Not necessarily a ponzi, if it's sustainable long term (a ponzi is not sustainable).

For example, if payouts are 1M and collected fees are 1.5M then would be a sustainable normal business, like a casino.

What you quoted makes sense, assuming that most customers lose money (which should be the case)
"For example, if we think someone is a bad trader, we may trade short when they are long or vise verse."

I believe this is where a reasonable chunk of the profit is coming in big companies with lots of analytic and stat data about their customers (which is the case in FTMO, for example).
  • #5,590
  • Nov 18, 2021 1:37pm Nov 18, 2021 1:37pm
Quoting Capablanca
{quote} Not necessarily a ponzi, if it's sustainable long term (a ponzi is not sustainable). For example, if payouts are 1M and collected fees are 1.5M then would be a sustainable normal business, like a casino. What you quoted makes sense, assuming that most customers lose money (which should be the case) "For example, if we think someone is a bad trader, we may trade short when they are long or vise verse." I believe this is where a reasonable chunk of the profit is coming in big companies with lots of analytic and stat data...
i beg to differ on this one.
if they would be able really reliably decide who or what constitutes a "bad trader"...
then
A. why the heck do you fund one?
B. why do you need traders at all? just place your own trades on your better than your prop traders' belief!
there is always, always another trade!!
  • #5,591
  • Nov 18, 2021 1:43pm Nov 18, 2021 1:43pm
Quoting Capablanca
Not necessarily a ponzi, if it's sustainable long term (a ponzi is not sustainable).
-It is like both, a ponzi and a casino. Either way, if no real trading is occurring and all profits are generated from signups, whether you want to call it a ponzi or a casino, it is not legal in most countries without proper licensing. No need to argue semantics, really.

Quote
"A Ponzi scheme is a form of fraud that lures investors and pays profits to earlier investors with funds from more recent investors. The scheme leads victims to believe that profits are coming from legitimate business activity, and they remain unaware that other investors are the source of funds."

If it looks like a turd and smells like a turd...
  • #5,592
  • Nov 18, 2021 2:22pm Nov 18, 2021 2:22pm
Quoting profitfarmer
{quote} i beg to differ on this one. if they would be able really reliably decide who or what constitutes a "bad trader"... then A. why the heck do you fund one? B. why do you need traders at all? just place your own trades on your better than your prop traders' belief!
The older and big guys like FTMO have already a goldmine of data.

If we read the statement of the Traders Central guy we understand that there's a lot of analytics that can be extracted (of course he pinpointed what he wanted, but the my point is there).
https://medium.com/traders-central-e...y-b49241f1d89a

Correlation between how traders behave in challenges, for example, and how they will perform in funded accounts is no different from what Amazon does when their algorithm looks into what product you purchased and selects a basket of products that you may be interested on.

Anyway, I don't even think that they need to select "bad customers". It's enough to know that in each 100 funded customers, about 80 will blow up the 10K DD, 90 will be break even (0) and 10 will be average winners of 30K until they blow up the account.
This is 80 x 10 - 10 x (-30) = +500 if they send the symmetric trade to the market.
  • #5,593
  • Nov 18, 2021 4:07pm Nov 18, 2021 4:07pm
I guess they were getting too much hate about their payout cap lol
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  • #5,594
  • Nov 18, 2021 4:29pm Nov 18, 2021 4:29pm
Quoting mlseenie
I guess they were getting too much hate about their payout cap lol {image}
Also removed the "4 years of trading experience" lol.. I think these guys are lurking here in this thread.

Still doesn't take away the fact that the guy registered the holding company when he was 16 and was allegedly trading at 14 year old. Gotta give it to the kid he's got ambition and jumping on the prop gravy train, but he'll never see any of my $$$.

@Takisd you up to give them a try?
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Truth is like poetry. And most people f*cking hate poetry.
  • #5,595
  • Nov 18, 2021 5:22pm Nov 18, 2021 5:22pm
Quoting mrdfx
{quote} Also removed the "4 years of trading experience" lol.. I think these guys are lurking here in this thread. Still doesn't take away the fact that the guy registered the holding company when he was 16 and was allegedly trading at 14 year old. Gotta give it to the kid he's got ambition and jumping on the prop gravy train, but he'll never see any of my $$$. @Takisd you up to give them a try? {image}
Didn't know you could even open a company at 16 ahaha. His must be trust fund kid or something
  • #5,596
  • Nov 18, 2021 7:20pm Nov 18, 2021 7:20pm
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  • #5,597
  • Nov 18, 2021 7:55pm Nov 18, 2021 7:55pm
Does anyone actually know why they have or need a payout cap? Also do you think other firms might introduce that now or in the future?
  • #5,598
  • Nov 18, 2021 8:27pm Nov 18, 2021 8:27pm
Quoting mrdfx
{quote} Also removed the "4 years of trading experience" lol.. I think these guys are lurking here in this thread. Still doesn't take away the fact that the guy registered the holding company when he was 16 and was allegedly trading at 14 year old. Gotta give it to the kid he's got ambition and jumping on the prop gravy train, but he'll never see any of my $$$. @Takisd you up to give them a try? {image}

I don't give kids pocket money.... I send them to gladiator school, time to fight for your money children.

The cap is enough for me to say no especially if volatility sticks around.
I'd say theres a payout cap because they dont have capital, if you don't have capital dont start a prop firm.
  • #5,599
  • Nov 18, 2021 9:08pm Nov 18, 2021 9:08pm
Quoting Takisd
{quote} I don't give kids pocket money.... I send them to gladiator school, time to fight for your money children. The cap is enough for me to say no especially if volatility sticks around. I'd say theres a payout cap because they dont have capital, if you don't have capital dont start a prop firm.
Right on. Couldna said it better myown-self.
Look Left Trade Right
  • #5,600
  • Nov 18, 2021 9:58pm Nov 18, 2021 9:58pm
Some possible reasons for a payout cap:

1. No real trading is taking place and traders are funded purely by failed challenges.
2. Real trading is taking place, but firm does not know how to properly manage operations to ensure consistent profitability (for a potential, myriad of reasons).
3. Firm is taking trader profits and earning interest and/or investing the money elsewhere each month for their own benefit.
4. Firm is really in the business of selling data, and is only paid for that data at a later time, once the data has been analyzed etc..

None of these reasons are good in my opinion (as things currently are). An important point to consider is that their policy is not really a profit cap as much as it is a profit deferment. And it would seem that there are not many reasons that might justify that kind of policy.

Another possible reason could be that they may have some policy that states that traders that violate the account parameters may not be eligible for payouts (or only partial payouts), but I have not looked to see if they have any such terms in place. Because, obviously, most traders will lose their account within their first month of live trading, and that would sure make things extremely profitable for them if they were in fact funding accounts with failed challenge fees.
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