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  • #8,061
  • May 21, 2022 11:22am May 21, 2022 11:22am
Quoting TrAndy1
{quote} Yes, one can take this simplified formula for evaluation of any challenge of any prop firm. Expectancy = ((Max. Drawdown on a given challenge account) * (profit split percentage)) - (Euler^((% Profit goal) / ((-) max. allowed Drawdown))*(challenge fee)) For example on FTMO $200k account. You have with 80% profit split $16k as buffer - 15% profit goal from the two phases versus -10% max. DD, so 1.5 as ratio, that is with Euler ~2.7^(1.5)=4.44 times the challenge fee of $1145 (Euro 1080 with EU exchange rate at ~1.06), that $16k from FTMO...
So, I have one question....when using that 1.5 ratio, which is derived from 10% phase1 and 5% phase 2, they really aren't asking for 15% with 10% DD. They are asking for 10% with 10%(1.0) and then resetting and then asking for 5% with 10%(0.5)
My question is does the reset affect the ratio? If so, I would think it would increase expectancy.
  • #8,062
  • May 21, 2022 11:35am May 21, 2022 11:35am
Quoting pipmaster77
{quote} So, I have one question....when using that 1.5 ratio, which is derived from 10% phase1 and 5% phase 2, they really aren't asking for 15% with 10% DD. They are asking for 10% with 10%(1.0) and then resetting and then asking for 5% with 10%(0.5) My question is does the reset affect the ratio? If so, I would think it would increase expectancy.
It is not important because it does not affect the 1.5 ratio, you need to do that +5% profit goal in addition to that 10%. I do not take into account the time limit itself here, this can be challenging itself. But you need to do Ratio 1 + Ratio 0.5 which is in sum 1.5. If you take into the time limits itself which you do not have on a live account at a real broker of your choice then the positive expectancy for FTMO gets worse here, because of course it is more difficult to do +10% in ca. 6 weeks or so.
But I do not quantify those time limits itself here because it would be kind of subjective. It really depends on your own strategy and own expectations here. Only what I presented in my recent previous posts are kind of objective when also bit simplified of course here. It is not that all difficult if you just clarify yourself the formula.
  • #8,063
  • May 21, 2022 11:50am May 21, 2022 11:50am
Quoting TrAndy1
{quote} It is not important because it does not affect the 1.5 ratio, you need to do that +5% profit goal in addition to that 10%. I do not take into account the time limit itself here, this can be challenging itself. But you need to do Ratio 1 + Ratio 0.5 which is in sum 1.5. If you take into the time limits itself which you do not have on a live account at a real broker of your choice then the positive expectancy for FTMO gets worse here, because of course it is more difficult to do +10% in ca. 6 weeks or so. But I do not quantify those time limits...
TrAndy1, very impressive math..so for people who are struggling and can not pass, lets say $200,000 challenge at FTMO...what would be the minimum of personal account size they must have have to compensate for no longer considering FTMO(as an example) if margin/leverage are the same on FTMO and personal account?
If it is helpful, lets say average month profit is 10%.
  • #8,064
  • May 21, 2022 11:55am May 21, 2022 11:55am
I have seen stats in E 8 funding site which says some people achieved phase 1 and 2 target in 4 to 5 minutes.

Can not believe this.
Is this fake propaganda?
Intraday only.
  • #8,065
  • Edited 12:09pm May 21, 2022 11:56am | Edited 12:09pm
Quoting Masterrmind
Yes and I posted plenty of material in previous posts.
-Sorry. I thought that you might have.

I did check out their site yesterday. I did not like the fact that they have so many nag screens, and that they required you to sign up before you could see the details of what they offer. It felt very 'Internet Marketing' to me, like they are trying to build an email list or something.

If you are looking for bigger accounts, another consideration might be The Funded Trader, as they have a 400K challenge. I personally do not care for some of their restrictions, though. They do have some history of payouts, however.

You could also consider going with a firm that has no daily draw-down, where you can build your own buffer on a smaller account and trade larger that way.
  • #8,066
  • May 21, 2022 11:59am May 21, 2022 11:59am
Quoting driven18
{quote} Trandy1, very impressive math..so for people who are struggling and can not pass, lets say $200,000 challenge at FTMO...what would be the minimum of personal account size they must have have to compensate for no longer considering FTMO(as an example) if margin/leverage are the same on FTMO and personal account?
It would be $16k/4.44, so the buffer you get after profit split versus the Euler equivalent when you reinvest yourself. That is here ca. $3600 on your own personal account. If I take all various prop firms I know into account of their expectancy in addition to overall trading conditions and customer serice, then I get the following ranking: 1. FTMO, 2. TFF, 3. E8F, 4. TFT, 5. MFF. And FTMO is first because of its history and market leadership, otherwise TrueForexFunds has slightly better conditions.
  • #8,067
  • May 21, 2022 12:07pm May 21, 2022 12:07pm
Quoting navk
I have seen stats in E 8 funding site which says some people achieved phase 1 and 2 target in 4 to 5 minutes. Can not believe this. Is this fake propaganda?
-I do not know anything about it, however, it is possible to earn enough profit in that amount of time to pass one of the challenges, but you would have to take on serious risk to do so.

But, risk is subjective. If a trader is doing 5+ figures profit per month, then maybe it is not such a big deal to take on several challenges and just try to finish them as quickly as possible in order to add on a few more accounts.

I can personally see the appeal. However, you have to hope that a firm will not eventually cut you off for such practices. If a firm is looking for good traders to leverage, then they will not want gamblers. On the other hand, if a firm is relying primarily on signup fees, then they might not care. TFT will actually ban you if you fail a challenge on the first day (supposedly, according to their website).

With E8 requiring only 1 day to complete each challenge, then it is a great way for traders to get back up and running very quickly.
  • #8,068
  • May 21, 2022 12:07pm May 21, 2022 12:07pm
Quoting TrAndy1
{quote} It would be $16k/4.44, so the buffer you get after profit split versus the Euler equivalent when you reinvest yourself. That is here ca. $3600 on your own personal account. If I take all various prop firms I know into account of their expectancy in addition to overall trading conditions and customer serice, then I get the following ranking: 1. FTMO, 2. TFF, 3. E8F, 4. TFT, 5. MFF. And FTMO is first because of its history and market leadership, otherwise TrueForexFunds has slightly better conditions.
So are you saying that if trader has $3,600 to his name and maintains this $3,600 month to month, trader does not need Prop Firms in order to work with their $200,000 account?
  • #8,069
  • May 21, 2022 12:18pm May 21, 2022 12:18pm
Quoting TrAndy1
{quote} It would be $16k/4.44, so the buffer you get after profit split versus the Euler equivalent when you reinvest yourself. That is here ca. $3600 on your own personal account. If I take all various prop firms I know into account of their expectancy in addition to overall trading conditions and customer serice, then I get the following ranking: 1. FTMO, 2. TFF, 3. E8F, 4. TFT, 5. MFF. And FTMO is first because of its history and market leadership, otherwise TrueForexFunds has slightly better conditions.
From a pure math perspective, MFF WOULD BE #1. Trading conditions are excellent as well. Customer service definitely lacking though.
  • #8,070
  • May 21, 2022 12:20pm May 21, 2022 12:20pm
Quoting driven18
{quote} So are you saying that if trader has $3,600 to his name and maintains this $3,600 month to month, trader does not need Prop Firms in order to work with their $200,000 account?
yes, you can say that being objective to that point of expectancy what you get from FTMO. $3600 equivalent differs of course from the corresponding prop firm offer, but one also has other advantages like goal setting and exercising discipline when going over a prop firm. But usually what you get is about 3 to 5 times more than your own money, and not more. You get that $200k offer from FTMO for about $1145, you would need $3.6k to replicate it on your own brokerage account. Props demystified.
  • #8,071
  • May 21, 2022 12:23pm May 21, 2022 12:23pm
Quoting driven18
{quote} So are you saying that if trader has $3,600 to his name and maintains this $3,600 month to month, trader does not need Prop Firms in order to work with their $200,000 account?
So if you're able to make 10% on a 200K with 20K DD you are essentially flipping the account, with 80% split you are paid 16K. Flipping your $3,600 would net you $3,600. I believe what TRAndy is explaining with the formula is the gains you do not get paid on in phase 1 and 2. Flip your $3,600 2 months in a row and you have $14,400. Now you are much closer to earning as much as you would with 10% on a 200K with an 80% split. Correct me if I'm missing something.
  • #8,072
  • May 21, 2022 12:24pm May 21, 2022 12:24pm
Quoting TrAndy1
{quote} yes, you can say that being objective to that point of expectancy what you get from FTMO. $3600 equivalent differs of course from the corresponding prop firm offer, but one also has other advantages like goal setting and exercising discipline when going over a prop firm. But usually what you get is about 3 to 4 times more than your own money, and not more. You get that $200k offer from FTMO for about $1145, you would need $3.6k to replicate it on your own brokerage account. Props demystified.
I must say "fucking beautiful" demystification!
  • #8,073
  • May 21, 2022 12:25pm May 21, 2022 12:25pm
For those of you that have accountants/CPA's, I am curious if you have spoken with them about the nature of these prop firms and how they operate. For those that live in countries with capital gains tax, I am curious how you all are treating your earnings as a subcontractor. Do you still consider this trading, even though you are on a demo account, using virtual funds in most cases? Just curious.
  • #8,074
  • May 21, 2022 12:28pm May 21, 2022 12:28pm
Quoting TrAndy1
You get that $200k offer from FTMO for about $1145, you would need $3.6k to replicate it on your own brokerage account. Props demystified.
-Do not forget the important fact that, once funded, you are trading without any risk whatsoever (in most cases). The value of that is much more difficult to quantify.
  • #8,075
  • May 21, 2022 12:29pm May 21, 2022 12:29pm
Quoting pipmaster77
{quote} So if you're able to make 10% on a 200K with 20K DD you are essentially flipping the account, with 80% split you are paid 16K. Flipping your $3,600 would net you $3,600. I believe what TRAndy is explaining with the formula is the gains you do not get paid on in phase 1 and 2. Flip your $3,600 2 months in a row and you have $14,400. Now you are much closer to earning as much as you would with 10% on a 200K with an 80% split. Correct me if I'm missing something.
You miss the Euler figure, therefore you underestimate the value of reinvesting your own profits on your own brokerage account. Then the offered value gets worse.
  • #8,076
  • May 21, 2022 12:29pm May 21, 2022 12:29pm
Quoting Nsak3y
For those of you that have accountants/CPA's, I am curious if you have spoken with them about the nature of these prop firms and how they operate. For those that live in countries with capital gains tax, I am curious how you all are treating your earnings as a subcontractor. Do you still consider this trading, even though you are on a demo account, using virtual funds in most cases? Just curious.
Ordinary income here in the US. I, personally, am not i charge of any real money, therefore, no capital gains. If the prop is duplicating my trade in a live market, the gains are all theirs. The profit split is more of a fee for duplicating my trades. Since it is such a gray area as to whether they are even placing the trades in a live market, it further solidifies the "no capital gains".
  • #8,077
  • May 21, 2022 12:42pm May 21, 2022 12:42pm
Quoting pipmaster77
Ordinary income here in the US. I, personally, am not i charge of any real money, therefore, no capital gains.
-I personally think that this is the smart approach. No worry of being at risk for taking on certain tax advantages that may not be applicable, but also avoiding various licensing requirements that may be involved with money management, investment advice and trading etc..

In some cases, these firms even go a step further by passing the data off to a third-party, and allowing them to decide what to do with it, which further-insulates the firm and the trader. Essentially, the firm is selling data and we are just mining it for them. All basic services. Whether or not that argument would hold up in court is another matter.
  • #8,078
  • May 21, 2022 12:44pm May 21, 2022 12:44pm
Just done the calc of 3 prop firms their expectancy. I get the following expectancy scores with the previous presented discount codes included: 1.MFF = 7, 2. TFF = 5, 3. FTMO=3.2. This does not take affect any trading conditions nor any customer service. So with only the score in mind you get more than twice for your money at MFF than on FTMO. It is about 7 times the money you give MFF when comparing to being reinvested on your own live brokerage account. And still 5 times of money at TFF.
  • #8,079
  • May 21, 2022 12:53pm May 21, 2022 12:53pm
Quoting TrAndy1
Just done the calc of 3 prop firms their expectancy. I get the following expectancy scores with the previous presented discount codes included: 1.MFF = 7, 2. TFF = 5, 3. FTMO=3.2. This does not take affect any trading conditions nor any customer service. So with only the score in mind you get more than twice for your money at MFF than on FTMO. It is about 7 times the money you give them when comparing to being reinvested on your own live brokerage account. And still 5 times of money at TFF.
Yes, makes sense. Simply because your targets are lower and your DD is higher. MFF is 13% with 12% DD, TrueForex is 12% with 10%, where FTMO is 15% with 10%. I'm assuming E8 will score evn worse with 13% with 8% DD, which is a 1.625 requirement.
  • #8,080
  • May 21, 2022 1:00pm May 21, 2022 1:00pm
Quoting pipmaster77
{quote} Yes, makes sense. Simply because your targets are lower and your DD is higher. MFF is 13% with 12% DD, TrueForex is 12% with 10%, where FTMO is 15% with 10%. I'm assuming E8 will score evn worse with 13% with 8% DD, which is a 1.625 requirement.
Yep, E8 is horrible on that perspective. The worse among all the major ones.
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