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  • #12,461
  • Nov 17, 2022 11:11am Nov 17, 2022 11:11am
Quoting Takisd
{quote} ALL the new firms have new weird rules about "risky behavior". FTMO's is new but all the ones i am toying with at the moment have the same vague non descript rules.
imo what held FTMO above most was historic payouts without issues, custumer support plus clean cut rules leaving no room for interpretation of TC etc. now looks like MFF is taking it s place.
  • #12,462
  • Nov 17, 2022 11:13am Nov 17, 2022 11:13am
Quoting 1odi
i red the whole article, and still it s not quite clear what gambling really means for them. ... there s a lot of grey area where they could enforce that?
-Yes. This ambiguous language works in their favor.

Quoting pipmaster77
it appears the prop firms now want the best of BOTH worlds... ... ...THEY CANNOT HAVE IT BOTH WAYS.
-Yes. They want the cake, they want to eat the cake and they also want the ice cream or whatever else that comes with the cake.
  • #12,463
  • Nov 17, 2022 11:18am Nov 17, 2022 11:18am
As traders, it would be good if we can accurately discern between greed and strategic planning when such measures are taken, in lieu of speculating and attempting to predict worse-case scenarios. This is why transparency is so important. Unfortunately, it is difficult-to-impossible for most of us to see behind the curtains.
  • #12,464
  • Nov 17, 2022 11:34am Nov 17, 2022 11:34am
Quoting Nsak3y
{quote}-I assume that this is in reference to taxes. But from a legal perspective, it should be clarified for readers that an LLC does offer advantages in terms of legal/asset protection. Depending on how your business is structured, you can see pretty heavy tax rates without being in the upper brackets. One of my non-trading businesses paid out quite a bit (relatively speaking) in recent years due to self-employment tax and Obama Care penalty tax. I think it was eventually restructured as an S-Corp, if I recall correctly.
Yes, I was speaking strictly from a tax perspective.
  • #12,465
  • Nov 17, 2022 12:07pm Nov 17, 2022 12:07pm
I think if people want to restrict gambling behavior they need to implement lot size limits (total open not single trade). But wont that be a massive industry buzzkill.
  • #12,466
  • Nov 17, 2022 12:12pm Nov 17, 2022 12:12pm
Quoting Capablanca
{quote} I was with FTMO but last Summer I got an email from them with a termination notice. Apparently they didn't like my trading style and terminated based on their T&C (gambling). My main objective with these trading firms is to fund my own trading account and have 100% profits for myself. So, my approach with FTMO, at the time, was to do little trades per day (1 or 2) and one of 2 things happened: 1. As soon as I got about 5% or 6% profit I would stop trading and only took 0.01 lots to complete the minimum 10 trading days. Then waited for the...
just found this post related i guess with the gambling issue. still not that clear on how that was gambling
  • #12,467
  • Nov 17, 2022 12:19pm Nov 17, 2022 12:19pm
Quoting Nsak3y
As traders, it would be good if we can accurately discern between greed and strategic planning when such measures are taken, in lieu of speculating and attempting to predict worse-case scenarios. This is why transparency is so important. Unfortunately, it is difficult-to-impossible for most of us to see behind the curtains.
Exactly. The ideal firm would ACTUALLY be looking for a win/win relationship with the trader. This would mean realistic profit and time targets in the challenges to demonstrate how the trader would trade the funded account. Of course, once funded I would expect an account 5-6 times larger than the fee I paid. Currently, the only firms with lower targets and/or longer times to pass are the instant funding, which, to me, offer no value as you are simply funding your own account. Paying a fee equal to DD scaling at a lower pace than you would on your own and then giving up 50% makes no sense.
I believe MFF is pretty damn close to the ideal firm.........8% target in 60 days (I was never denied an extension), 5% in another 60 days, higher DD, lower fees than all of the others.
I, personally should never have an issue as I trade the funded accounts with 2-3% risk of the DD (0.2-0.3 of the equity) MOST OF THE TIME. I, of course, have accounts with a higher risk profile as well. However, it would've been awesome to be able to trade that low risk style when I was/am taking the challenges as well.
My concern is the overall sustainability of the firms. Unless a firm is actually copying, my style of trading is not profitable to them...the payouts are small, but they are not making money (once again, unless copying), the GAMBLING style is much more profitable to the firm until there are too many large payouts to sustain the profitability.
  • #12,468
  • Nov 17, 2022 12:23pm Nov 17, 2022 12:23pm
Quoting Takisd
I think if people want to restrict gambling behavior they need to implement lot size limits (total open not single trade). But wont that be a massive industry buzzkill.
Buzzkill for sure. The problem then would be not enough gamblers feeding the machine to pay the sensible traders (once again, unless actually copying)
  • #12,469
  • Edited 1:18pm Nov 17, 2022 1:07pm | Edited 1:18pm
Quoting Takisd
I think if people want to restrict gambling behavior they need to implement lot size limits (total open not single trade). But wont that be a massive industry buzzkill.
-Yes. Or reduce leverage, which would basically produce the same result. Lowering leverage would probably be better for all parties since we are dealing with different account sizes and contract specifications.

I think, if firms want to deter gambling, then that is fine. However, I think that there are better ways to go about it. Banning accounts, presumably outright, seems unreasonable. If multiple warnings were given and the behavior continued, then that might be different. I suspect that some firms may not want to be so forgiving, though, especially if they are not really copying trades. If such deterrence measures are put into place, then the terms need to be crystal clear; none of this ambiguous language.

Such measures would surely-clarify which firms are actually looking for good traders and which firms are just running a ponzi scheme, because having these kinds of measures in place would force traders to operate within a good risk-management window, which would eventually lead to better traders. I think, if that is what they really wanted, though, then the challenges would be more realistic. I think we know why they are not.

As such, firms that are heavily-dependent (or addicted) to the high turnover rate, will likely elect to just outright ban the heavy-hitters and continue with allowing high-risk activity. By banning the few problem-makers and allowing the rest of the gamblers to continue failing means having their cake and eating it, too.

The real issue is when the terms are not clear. Even for good traders that want to have higher-risk accounts. When we start seeing major firms banning accounts for unclear reasoning, then we need to start paying attention because this kind of behavior can quickly lead to overreach, and when there is little-to-no accountability, then that means that anyone and everyone could potentially be at risk. This is why it could set a dangerous precedent. This is also why competition is so important in this space.
  • #12,470
  • Nov 17, 2022 1:08pm Nov 17, 2022 1:08pm
To me if you had a cap that was still fairly loose it could work but yeh. Brokers have been getting smashed the last few months too, b book revenues have been awful. So I suspect there is some tension in the prop firm space.
  • #12,471
  • Nov 17, 2022 1:26pm Nov 17, 2022 1:26pm
Quoting Takisd
I think if people want to restrict gambling behavior they need to implement lot size limits (total open not single trade). But wont that be a massive industry buzzkill.
Not just lot size limit, also consistency.
I never used too much lots in FTMO, I'm not sure if I ever went over 10 lots in 100K funded account, but my stops were usually close to the daily max, taking the most I could from a coin flip.

You would have to have a set of intricate rules to prevent gambling, unless you define a joking leverage like BluFx, which has 1:3 (even less because of the margin) but this would not allow, even, to pass a challenge in 30 days most of the time.
  • #12,472
  • Nov 17, 2022 1:27pm Nov 17, 2022 1:27pm
What they actually want is a cap on payouts. What is the problem with a gambler taking big lot sizes and looses the account ? None of course. The problem comes only with extraordinary high payouts for taking higher risks. If one is a scalper and trades infrequently he usually takes big lot sizes especially on a merged account. Then if everyone knows that you cannot enter 40 to 50 lots, but 5 or 10 lot sizes each, then they need to introduce overall lot size limit. But that determines the trading style too. That is not so fair. Just a simple 10% or 15% payout cap would be useful to avoid any excessive gambling behavior. But having no transparency is the worst here.
  • #12,473
  • Nov 17, 2022 1:30pm Nov 17, 2022 1:30pm
Quoting Capablanca
Not just lot size limit, also consistency. ... You would have to have a set of intricate rules to prevent gambling, unless you define a joking leverage like BluFx, which has 1:3
-This is understood. However, I think that most traders would not prefer consistency rules. And although limiting leverage would not completely stop gamblers, it would minimize the damage that props could be exposed to, which is likely the real issue here.
  • #12,474
  • Nov 17, 2022 1:31pm Nov 17, 2022 1:31pm
It seems FTMO is leaving the crowd in the dark with their new hidden rule on banning "gamblers" or traders taking high lot sizes. Such a hidden rule is usually red flag.
  • #12,475
  • Nov 17, 2022 1:33pm Nov 17, 2022 1:33pm
For every rule they want to introduce now, there is workaround. They need hard rules like overall lot size limits or best for FTMO a max. payout cap per account or user.
  • #12,476
  • Nov 17, 2022 1:35pm Nov 17, 2022 1:35pm
Quoting Capablanca
{quote} Not just lot size limit, also consistency. I never used too much lots in FTMO, I'm not sure if I ever went over 10 lots in 100K funded account, but my stops were usually close to the daily max, taking the most I could from a coin flip. You would have to have a set of intricate rules to prevent gambling, unless you define a joking leverage like BluFx, which has 1:3 (even less because of the margin) but this would not allow, even, to pass a challenge in 30 days most of the time.
Yes, this is what I meant by having the best of both worlds. They NEED the high leverage to justify the high target in short time "challenge", but then they want to restrict gambling once you pass? They want the high failure rate that the gambling assures them of, but not pay when someone gets it right? Absurd.
  • #12,477
  • Nov 17, 2022 1:36pm Nov 17, 2022 1:36pm
Quoting TrAndy1
Such a hidden rule is usually red flag.
-I wouldn't necessarily say that the rule is hidden, as nearly all prop firms have something in their terms that state that they have the right to terminate an account at their own discretion (among other things). However, it is not common to see such rules actively enforced.

When you have very clear rules to follow (draw-down), and you start seeing firms closing accounts for other rules (risk), it starts to become problematic. Because the draw-down is the risk. This is the amount that the firm has chosen to put up and risk, so having additional risk rules on top of that just start looking suspicious and unnecessary.
  • #12,478
  • Nov 17, 2022 1:39pm Nov 17, 2022 1:39pm
It does not matter if the rule is hidden or clear stated, because over time the traders will find out them all. But the damage is much greater if they cannot communicate any new rules in a very clear and logical understandable manner with no room for interpretation. Otherwise FTMO is only harming themselves. The new ban cannot be worse actually for the reputation than it is done actually. Even TPT had a clear lot size limit rule. They fear it is not be loved by the community and now they make this new gambling rule kind of hidden with no clear transparency how it is interpreted in each instance. That is a clear nogo behavior after the scaling limig that profits cannot be reinvested in new positions and only free margin can be used for scaling in on new positions when in profit. Just to avoid very large payouts, what else! Buhh
  • #12,479
  • Nov 17, 2022 1:39pm Nov 17, 2022 1:39pm
Quoting Nsak3y
{quote}-This is understood. However, I think that most traders would not prefer consistency rules. And although limiting leverage would not completely stop gamblers, it would minimize the damage that props could be exposed to, which is likely the real issue here.
True, but limiting leverage would require lower target and/or longer time to pass challenges. This would be too big a disruption to the business model. What I'm sure they really would prefer to do is provide the 100:1 in the challenge and say OK, here ya go.....5:1 on the funded.
  • #12,480
  • Nov 17, 2022 1:40pm Nov 17, 2022 1:40pm
Quoting pipmaster77
They NEED the high leverage to justify the high target in short time "challenge", but then they want to restrict gambling once you pass? They want the high failure rate that the gambling assures them of, but not pay when someone gets it right? Absurd.
-Yes. I have always said that the challenges were hypocritical. Not only in terms of what good trading should actually look like, but the fact that they set those terms and even showcase big monthly earners, all the while, trying to preach about good risk management and what it means to be a good trader etc..

It's all hogwash, but it is a trade-off that I gladly accept for reasoning that I have described before. Simply put, I would rather have the option to get funded as quickly as possible, in lieu of trading on a demo account for 6 months to a year in order to prove my consistency.
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