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  • #16,581
  • Edited 9:42am Jun 12, 2023 9:26am | Edited 9:42am
Quoting Takisd
Also, 10k dd isnt enough? Imagine being able to pass something calmly for $500 and saying 10k dd isnt enough This is the 2023 we live in. ... I think the community as a whole has lost sight of opportunity amongst the noise. Even when FTMO first was getting big we started saying nahhhhhhh this is bullshit its too good to be true. Now look at the conversations we are having.
-I think, if firms transition to a more traditional model, then the $500 fee shouldn't even be a thing. There should be no fee, other than minor expenses, especially if I am using Myfxbook.

I also think that spending 3-months or more to prove myself is not worth 10k worth of draw-down, assuming that I am going to have to jump through hoops or trade a certain way (with even tighter restrictions) in order to get that draw-down, simply because I can do that myself, on my own account, without all of the restrictions. But that's just me. For many traders, it may be worth it.

When I say that the offering should be better, I say this because most of the traders in this space will expect that probably, before they even consider it, unless they have no other options. We cannot ignore the fact that we have been exposed to certain expectations, and this fact will need to be considered when structuring something for this market. That is just the reality.

However, if regulators take it all away and we have no other choices (and expectations are forcefully rolled back), then perhaps traders will fall back down to reality and the 10k draw-down will start looking nice. But certainly, you cannot expect such models to coexist easily, I think. But who knows? This is all speculative, anyway. I suppose that it will depend on the trader. Probably, there will be some that will love the free model, while others will prefer the paid model.
  • #16,582
  • Jun 12, 2023 10:57am Jun 12, 2023 10:57am
Quoting Nsak3y
{quote}-I think, if firms transition to a more traditional model, then the $500 fee shouldn't even be a thing. There should be no fee, other than minor expenses, especially if I am using Myfxbook. I also think that spending 3-months or more to prove myself is not worth 10k worth of draw-down, assuming that I am going to have to jump through hoops or trade a certain way (with even tighter restrictions) in order to get that draw-down, simply because I can do that myself, on my own account, without all of the restrictions. But that's just me. For many...
sure, but when the house of cards falls? Then what? We continue those expectations?

My first arcade seat was $500 a month and my allocation was very little, less than 10k. The one thing that is for sure is that the traders who are expecting the most are likely profiting the least from the current environment.
  • #16,583
  • Jun 12, 2023 11:03am Jun 12, 2023 11:03am
Quoting Takisd
sure, but when the house of cards falls? Then what? We continue those expectations?
-It seems inevitable that this current model will fail, eventually. But what if it lasts a lot longer than we think? If firms consolidate into 1 or 2 major firms, and those existing firms make enough tweaks to ensure profitability, then maybe the ponzi engine can stay running for a long time.

Probably, the biggest hurdle will be regulatory involvement. But, if the good firms can position themselves carefully, then perhaps they can avoid it and keep the model alive.

Maybe this is wishful thinking. I am both, cynical and hopeful, at the same time.
  • #16,584
  • Jun 12, 2023 11:09am Jun 12, 2023 11:09am
Quoting Nsak3y
{quote}-It seems inevitable that this current model will fail, eventually. But what if it lasts a lot longer than we think? If firms consolidate into 1 or 2 major firms, and those existing firms make enough tweaks to ensure profitability, then maybe the ponzi engine can stay running for a long time. Probably, the biggest hurdle will be regulatory involvement. But, if the good firms can position themselves carefully, then perhaps they can avoid it and keep the model alive. Maybe this is wishful thinking. I am both, cynical and hopeful, at the same...
I been milking prop firms for more than 2 years but I think we are likely to end up with two remaining or the market being regulated out. Given the behavior we see now i think regulated out is most likely but not before some cataclysm.
  • #16,585
  • Jun 12, 2023 11:17am Jun 12, 2023 11:17am
Quoting Capablanca
{quote} I like the unlimited. Some days I don't get setups for trading so it's not rare to end up with just 4 or 5 days in the 30 days challenges, 4 or 5% down and I have to make a flip coin to see if I get a free retry. I wouldn't have to do that if I had unlimited (or at least 60 or 90 days phase 1, where targets are tougher). Also because not every prop have extension. So it's very annoying that you make 4% this month, you get a free retake starting from scratch, then another 3% the next month and you get another free retake. And then another...
E8 offers 60-day phase 1 and 120 phase 2 with the same targets. Only difference is there is a minimum 5 trading days instead 0.
  • #16,586
  • Jun 12, 2023 11:20am Jun 12, 2023 11:20am
Quoting Takisd
{quote} I been milking prop firms for more than 2 years but I think we are likely to end up with two remaining or the market being regulated out. Given the behavior we see now i think regulated out is most likely but not before some cataclysm.
What could be an external trigger for such a cataclysm? A recession? probably not

Madoff's ponzi failed once a massive recession arrived and people asked for their money. Still, back in 2008 poker was still booming and continued to thrive through the recession, before the hammer dropped on Black Friday.
  • #16,587
  • Jun 12, 2023 11:25am Jun 12, 2023 11:25am
Quoting LehmanBrotha
{quote} What could be an external trigger for such a cataclysm? A recession? probably not Madoff's ponzi failed once a massive recession arrived and people asked for their money. Still, back in 2008 poker was still booming and continued to thrive through the recession, before the hammer dropped on Black Friday.
Probably a big crash leaving props with a ton of money to be paid in payouts (not compensated by the lost accounts)

Takisd may know but I have no idea if these guys cover any kind of risk with deep OTM options based in their traders aggregate position just to cover any big swan event.
  • #16,588
  • Jun 12, 2023 11:31am Jun 12, 2023 11:31am
Quoting Takisd
I think we are likely to end up with two remaining or the market being regulated out. Given the behavior we see now i think regulated out is most likely but not before some cataclysm.
-I think so, too.

If firms can prove that they are pushing even a few trades to live, then it may be difficult for anyone to legally charge them of operating a ponzi. If that is true, then the setting up (or shuttering and reforming) in an jurisdictional safe-haven might offer them some form of continuation.
  • #16,589
  • Jun 12, 2023 11:33am Jun 12, 2023 11:33am
Quoting Capablanca
Takisd may know but I have no idea if these guys cover any kind of risk with deep OTM options based in their traders aggregate position just to cover any big swan event.
-These firms would be wise to set up some kind of insurance fund. Probably, if they are operating within some regulatory jurisdiction, then this may become a requirement.
  • #16,590
  • Jun 12, 2023 11:35am Jun 12, 2023 11:35am
Quoting LehmanBrotha
{quote} What could be an external trigger for such a cataclysm? A recession? probably not Madoff's ponzi failed once a massive recession arrived and people asked for their money. Still, back in 2008 poker was still booming and continued to thrive through the recession, before the hammer dropped on Black Friday.
Range market and the growth to slow.

So the model is broken, for it to work at critical mass you HAVE to have significant revenue from trading, like 30% of outgoing to make it work.

All these firms are b-book only except MAYBE the top two I am sort of confident they are but its still a big maybe. The others are just operating a b-book. Normally if you are a broker, the b book is fine in a range cos of the deposits being from the customers, but if you consider the refunds + anything additional and a long range period (which usually happens july-september) the payouts will catch up to the money in unless people start pulling a TFT and slipping everyone, which seems to be a common 8cap theme.

If you consider FTMO and MFF growth, evidence points to a solution due to their growth in % being smaller.

If you take the top payout for last week from MFF Which they posted on twitter, it was 80k on a 100K account. That 80k is a lot of failed accounts just to pay 1 person. Eventually the number of people being paid will catch up so money in growth has to match it but the market is congested and its only a matter of time till revenues dip then the lagging payout numbers will spike whilst it dips and they all start rug pulling. It looks like fundedengineer or whatever it is is doing it now and there is talk of rocket21 also doing the same.
  • #16,591
  • Jun 12, 2023 11:36am Jun 12, 2023 11:36am
Quoting Capablanca
{quote} Probably a big crash leaving props with a ton of money to be paid in payouts (not compensated by the lost accounts) Takisd may know but I have no idea if these guys cover any kind of risk with deep OTM options based in their traders aggregate position just to cover any big swan event.
I think a market black swan event is unlikely to negatively affect a prop firm as it will just kill the traders. Regulatory blackswan is what im thinking.

As i posted before, I would not be surprised if CFTC tells 8cap to stop onboarding US residents who run prop firms.
  • #16,592
  • Jun 12, 2023 11:42am Jun 12, 2023 11:42am
Quoting Takisd
the payouts will catch up to the money in unless people start pulling a TFT and slipping everyone, which seems to be a common 8cap theme. ... Eventually the number of people being paid will catch up so money in growth has to match it but the market is congested and its only a matter of time till revenues dip then the lagging payout numbers will spike whilst it dips and they all start rug pulling.
-So, if no good way to increase trading revenue, then perhaps a significant reduction in leverage, or, 3-phase challenges? People won't like it, but if 95% of the prop firms get wiped out because they cannot pay, then maybe beggars can't be choosers...
  • #16,593
  • Jun 12, 2023 11:48am Jun 12, 2023 11:48am
Quoting Nsak3y
{quote}-So, if no good way to increase trading revenue, then perhaps a significant reduction in leverage, or, 3-phase challenges? People won't like it, but if 95% of the prop firms get wiped out because they cannot pay, then maybe beggars can't be choosers...
The best way would be to tell anyone who makes a big payout that they broke risk rules like TFT does so that no one gets paid a big amount.
  • #16,594
  • Jun 12, 2023 11:54am Jun 12, 2023 11:54am
Yeah, but that's shady. If they want to play that game, then tell me what the unwritten thresholds are.
  • #16,595
  • Jun 12, 2023 11:58am Jun 12, 2023 11:58am
Quoting Takisd
{quote} Range market and the growth to slow. So the model is broken, for it to work at critical mass you HAVE to have significant revenue from trading, like 30% of outgoing to make it work. All these firms are b-book only except MAYBE the top two I am sort of confident they are but its still a big maybe. The others are just operating a b-book.
I never worked for an FX broker (although I considered it a few years ago), but a colleague of mine was a head of research at a prominent broker. Based on his stories from the inside, a sustainable prop firm should run A, B, and C books. Their existing model is B-book, while claiming they run a C-book.

So, route A book through a prime broker while C-booking it at some capacity as well. Double dip on the winners while harvesting the losers.

Quoting Takisd
{quote} Eventually the number of people being paid will catch up so money in growth has to match it but the market is congested and its only a matter of time till revenues dip then the lagging payout numbers will spike whilst it dips and they all start rug pulling. It looks like fundedengineer or whatever it is is doing it now and there is talk of rocket21 also doing the same.
Funded engineer is slipping people?
I got an acc there but havent noticed anything unusual so far. I have noticed that they have ran a pretty substantial promo campaign and even extended it for a day. something like 30-50% discounts. Slightly unusual but not yet ringing an alarm bell.

Quoting Nsak3y
Yeah, but that's shady. If they want to play that game, then tell me what the unwritten thresholds are.
"When a measure becomes a target, it ceases to be a good measure" aka Goodhart's law.
  • #16,596
  • Jun 12, 2023 11:58am Jun 12, 2023 11:58am
Quoting Nsak3y
Yeah, but that's shady. If they want to play that game, then tell me what the unwritten thresholds are.
My impression of how things are is that there will be a cataclysm and the remaining participants will return to the top 2/move to the top 2. But the top 2 have to stay put if you ask me and not do drastic changes.
  • #16,597
  • Jun 12, 2023 12:00pm Jun 12, 2023 12:00pm
Quoting Takisd
{quote} Range market and the growth to slow. So the model is broken, for it to work at critical mass you HAVE to have significant revenue from trading, like 30% of outgoing to make it work. All these firms are b-book only except MAYBE the top two I am sort of confident they are but its still a big maybe. The others are just operating a b-book. Normally if you are a broker, the b book is fine in a range cos of the deposits being from the customers, but if you consider the refunds + anything additional and a long range period (which usually happens...
It's a common method with b-book brokers to blame profitable traders for arb without any proper evidence for refusing payment. You can already see the same happening with props and this will eventually erode all trust and speed up their downfall.
  • #16,598
  • Edited 12:51pm Jun 12, 2023 12:02pm | Edited 12:51pm
Quoting Nsak3y
{quote}-So, if no good way to increase trading revenue, then perhaps a significant reduction in leverage, or, 3-phase challenges? People won't like it, but if 95% of the prop firms get wiped out because they cannot pay, then maybe beggars can't be choosers...
absolutely , if they are not true to their words or just scams / ponzi scheme and totally depending upon the challenge money , not related any real fund provider and using demo money from brokers then certainly all vanish one day as they are not actually any financial company or fake/name sake registration to any / country if any . if grow enough may develop as a broker to be regulated / legal !
anyway if they depend upon trading revenue and got hundreds or thousands real / tested trader can survive unlimited times without any new challengers ! looks not though yet . anyway just speculation , wish they all well and continue their services ! even can change to non refundable fees ,profit split 50/50, low leverage or monthly subscription or anything but they must be trustworthy to survive in future .
Not understand?better not follow my analyses!doubt clearer first, risks ++
  • #16,599
  • Jun 12, 2023 12:04pm Jun 12, 2023 12:04pm
Quoting TraderTero
{quote} It's a common method with b-book brokers to blame profitable traders for arb without any proper evidence for refusing payment. You can already see the same happening with props and this will eventually erode all trust and speed up their downfall.
To be fair, there are a shit load of groups trying to arb props. On TG i get messages about it almost daily.
  • #16,600
  • Jun 12, 2023 12:40pm Jun 12, 2023 12:40pm
Quoting LehmanBrotha
"When a measure becomes a target, it ceases to be a good measure" aka Goodhart's law.
-Unlike a speed limit sign, I would see it as something to avoid, not as a maximum allowance. At the same time, however, you still want to get to your destination within a reasonable amount of time.
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