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  • #16,981
  • Jun 23, 2023 10:55am Jun 23, 2023 10:55am
Quoting ladder
{quote} Oh man, you are really too old to remember things. You asked me to answer your question from a 'should back traders' point of view. I replied 'Once again, you are making up things. I never have “should back traders” view.' My previous post clearly shows I don't have this view. I will not reply to your posts anymore.
Ok I apologize for my misinterpretation of that matter
  • #16,982
  • Jun 23, 2023 11:06am Jun 23, 2023 11:06am
Quoting Takisd
{quote} If someone has that much edge they could be at Darwinex but most likely employed and having an understanding of market dynamics and liquidity so don’t mess with retail things
I traded for them in the early days and earned a tiny amount of money despite pretty good performance. They don't pay you on your strat and risk, they have built IP based on software that basically treats retail flow like an off the shelf copy trader (albeit a bit more swanky) so in the end it's a bit like "show me yours and I might show you mine" much too vague and they got it wrong many, many times.

If they came up with something to match MFF I'd be on board asap as I like them and always rated them as a broker.
  • #16,983
  • Jun 23, 2023 11:08am Jun 23, 2023 11:08am
Comparing Darwinex to any of these retail prop firms is an absolute joke. The BIG difference.......Darwinex is real
They look at return vs. DD, current month, 6 months rolling, etc. They pay 15% performance fee, as industry standard for an investor is 20%, they keep 5, you get 15.
This space is comical in comparison.....yeah risk your full DD on one position, make 10% in a day, here is 95% split...........95% can be paid because there is ABSOLUTELY NO REAL MONEY behind it.
We all know and understand what this space is, I, along with others, accept and will continue to use these casinos as long as I can. If you're good, sign up with Darwinex and run that too.....that will probably pay you for life, this space will not.
  • #16,984
  • Jun 23, 2023 11:18am Jun 23, 2023 11:18am
I think retail prop space will split in two soon, one side will be the gamble limitless ones and other will create trading engines that can make revenue from trading.

things are so more complicated than just a booking people and maybe the smart people in the room (not me) will figure it out. For now I wait in anticipation of changes that make more sense
  • #16,985
  • Jun 23, 2023 11:31am Jun 23, 2023 11:31am
Quoting pipmaster77
Comparing Darwinex to any of these retail prop firms is an absolute joke. The BIG difference.......Darwinex is real They look at return vs. DD, current month, 6 months rolling, etc. They pay 15% performance fee, as industry standard for an investor is 20%, they keep 5, you get 15. This space is comical in comparison.....yeah risk your full DD on one position, make 10% in a day, here is 95% split...........95% can be paid because there is ABSOLUTELY NO REAL MONEY behind it. We all know and understand what this space...
Yes there is no comparison. It's a different model.

Frustratingly they were never able to steer the frequency distribution of funds fairly to performing traders and I think they lost a lot of opportunity and talent due to insisting they could fix a broken wheel by breaking a good one with their algo "D Score". Strange really.
  • #16,986
  • Jun 23, 2023 12:00pm Jun 23, 2023 12:00pm
Quoting Fagin
You are either running a ponzi looking for fees or you are something else but you cannot advertise to recruit a contractor under false pretences and demand unreasonable conditions whilst charging a fee, this is simply fraud and will be legally challenged.
-Curious about what false pretenses you are referring to? I think, the offer seems pretty clear. As far as anything being unreasonable and charging a fee, traders always have a choice as to whether or not to sign up and pay the fee etc..

Quoting Fagin
The sooner these ponzis leave this space the better it will be for all of us.
-Why? I suspect that without the Ponzi-nature of the model, that the model would not and could not exist; at least, not in its current form. But there are traditional prop firms that do not operate this way, so traders have a choice. I think, it needs to be understood that the remote prop model is a different kind of beast. It's high-risk, high-reward, and it's fast-paced. The opportunity is real for those that accept that.

Quoting Fagin
the fact you may be funding continuous fraud and enabling harm to those less fortunate than yourself by supporting this fraud.
Quoting Fagin
If payouts can only be paid by losing fees, this by definition is Ponzi and is illegal. Why would you support illegal behaviour?
-This is the nature of trading. It is little different from depositing funds into a brokerage account and trading it. The money that you profit, will come from someone else. I think, most traders understand how the model works by this point. They either accept that or they don't.
  • #16,987
  • Jun 23, 2023 12:02pm Jun 23, 2023 12:02pm
Quoting Fagin
What does a prop firm expect as a return on investment from a live trader per annum? What's his / her Sharpe ratio need to be? Does that even ever get discussed?
-If a remote prop ever started requiring a minimum Sharpe ratio, then they would lose most of their business probably. And rightfully so, given their other requirements. Traditional props, on the other hand, it makes more sense, for sure.
  • #16,988
  • Jun 23, 2023 12:06pm Jun 23, 2023 12:06pm
Quoting Nsak3y
{quote}-Curious about what false pretenses you are referring to? I think, the offer seems pretty clear. As far as anything being unreasonable and charging a fee, traders always have a choice as to whether or not to sign up and pay the fee etc.. {quote}-Why? I suspect that without the Ponzi-nature of the model, that the model would not and could not exist; at least, not in its current form. But there are traditional prop firms that do not operate this way, so traders have a choice. I think, it needs to be understood that the remote prop model is...
Sorry it's wine o'clock so haven't time to reply but.....

Picture paints a thousand words:

Attached Image (click to enlarge)
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Have a grand ole weekend everyone!
  • #16,989
  • Jun 23, 2023 12:12pm Jun 23, 2023 12:12pm
I believe most of these firms are the handsome Ponzi. But I don’t believe all are. There are ways to make them not even if those ways don’t really increase revenues
  • #16,990
  • Jun 23, 2023 12:13pm Jun 23, 2023 12:13pm
As previously mentioned, I think that unlimited is totally unnecessary. However, having longer maximums would be a good thing. It is important that firms allow for sufficient time to test things out, though, since the dynamics of the model have not been fully-tested yet and that data will need to be analyzed.

It does not seem unreasonable to ease into things, either. For example, a firm could do a slight bump in their maximum from say, 30-days to 60-days, just to test the waters for a few months. Then, maybe from 60-days to 90-days etc.. But these firms that are jumping straight into unlimited may be creating risk not only for their firm, but for this space.

The more that firms quickly and carelessly offer better terms, coupons, giveaways etc., the more that they put pressure on other firms to follow suit in order to remain competitive. This could be a disastrous race to the bottom. The firms that are slower to change, that allow room for adjustment, proper testing and data collection etc., will likely be the firms left standing, assuming that they can survive the stagnant periods that will likely be caused by the newer firms offering rainbows.

Needless to say, there are many factors to consider here, and it may not be so simple.
  • #16,991
  • Jun 23, 2023 12:17pm Jun 23, 2023 12:17pm
Quoting Takisd
I believe most of these firms are the handsome Ponzi. But I don’t believe all are. There are ways to make them not even if those ways don’t really increase revenues
-Sure. But I think that all of them have some elements of it, especially at the start, else they would need outside funding. I think that it is understood that some of them have adopted a hybrid model, but the fact remains that the challenge fees are necessary for all of these remote prop firms.

I believe that MFF had planned on utilizing outside funding when they started, but quickly realized that it just wasn't necessary. Maybe FTMO started with funding, I'm not sure. But I would bet money that they have transitioned to a self-sustaining model where fees are king.
  • #16,992
  • Jun 23, 2023 12:39pm Jun 23, 2023 12:39pm
Well what can we see today?

higher passing rates are happening for sure regardless of firm. The pass rates are better than brokerage traders profit rates, the discounts etc are all lowering the margins. Surely firms aren’t taking decisions that will put their entire trader base at risk?
  • #16,993
  • Jun 23, 2023 1:23pm Jun 23, 2023 1:23pm
Quoting Takisd
I believe most of these firms are the handsome Ponzi. But I don’t believe all are. There are ways to make them not even if those ways don’t really increase revenues
I don't think it makes a difference if 80% or 100% of the payouts come challenge fees. Could FTMO survive without collecting fees? If not, then I'm pretty sure that SEC would consider them being a ponzi.
  • #16,994
  • Jun 23, 2023 1:52pm Jun 23, 2023 1:52pm
Quoting TraderTero
{quote} I don't think it makes a difference if 80% or 100% of the payouts come challenge fees. Could FTMO survive without collecting fees? If not, then I'm pretty sure that SEC would consider them being a ponzi.
Haa SEC (US), CSA (Canada) and CFTC (left overs) are garbage watch dogs which sniffs only when they make money look at US and Canada they become shit place for forex traders. There job is not to protect clients but to extract money from looters. Also let this industry be without watchdogs all good firms pivot themselves and garbage will be weeded out automatically. This is coming out from a guy who lost almost 120K to garbage firms like Funding Talent, TPT and OFP funding.
  • #16,995
  • Jun 23, 2023 1:55pm Jun 23, 2023 1:55pm
Quoting Takisd
higher passing rates are happening for sure regardless of firm. The pass rates are better than brokerage traders profit rates
-This is an interesting point. It is a curious thing. On the one hand, these are demo accounts that only simulate live conditions. Maybe there is some element to that that allows the statistics to be skewed.

On the other hand, traders are churning and burning through accounts much faster with prop, forcing them to become better, much faster. Certainly, having to stick to a 5% daily draw-down has something to do with it. As much as we dislike some of the terms of the challenge model, there are factors in place that force traders to adopt better habits.

Could also be that experienced traders were slow to join these firms, and we might see a plateau or decline in statistics over time.

Quoting Takisd
Surely firms aren’t taking decisions that will put their entire trader base at risk?
-Rhetorical, I'm sure, but we only need look at the demographic that seems to be running these firms in most cases. Young, inexperienced, naive et al....
  • #16,996
  • Jun 23, 2023 1:55pm Jun 23, 2023 1:55pm
Quoting TraderTero
I don't think it makes a difference if 80% or 100% of the payouts come challenge fees. Could FTMO survive without collecting fees? If not, then I'm pretty sure that SEC would consider them being a ponzi.
-I'm not so sure. If a firm has just a few traders getting pushed to market, then that might justify the model from a legal perspective.

A business that is reliant on customer fees (or purchases) is nothing new. Most businesses operate this way. The entire forex market, in terms of trading, would not work if people just stopped putting money into it. Eventually, the winners would take all of the money from the losers until there was no more trading happening. In order for things to work, there has to be a constant influx of new money.

I suppose that it's a matter of nomenclature. Such as, bribery is illegal in most countries, but when it's called lobbying, it's perfectly fine.

It would be difficult to classify this as a ponzi unless a firm did absolutely nothing else except collect fees (i.e. did not push trades to market or use the trading data for signals or some other purpose etc.).

I can only guess about these things, though.
  • #16,997
  • Jun 23, 2023 1:57pm Jun 23, 2023 1:57pm
Quoting sampat
Also let this industry be without watchdogs all good firms pivot themselves and garbage will be weeded out automatically.
-I completely agree.
  • #16,998
  • Jun 23, 2023 2:07pm Jun 23, 2023 2:07pm
Quoting Nsak3y
{quote}-I'm not so sure. If a firm has just a few traders getting pushed to market, then that might justify the model from a legal perspective. A business that is reliant on customer fees (or purchases) is nothing new. Most businesses operate this way. The entire forex market, in terms of trading, would not work if people just stopped putting money into it. Eventually, the winners would take all of the money from the losers until there was no more trading happening. In order for things to work, there has to be a constant influx of new money. I suppose...
SEC and CFTC have their own rules and once they come after you the fist thing they do is to freeze all your funds if you are located in USA. Madoff didn't use any client funds to trade stocks but I believe that it would not have made any difference had he traded some some stocks with the client funds. There is no such thing as 80% ponzi or 100% ponzi.
  • #16,999
  • Jun 23, 2023 2:50pm Jun 23, 2023 2:50pm
Quoting TraderTero
{quote} SEC and CFTC have their own rules and once they come after you the fist thing they do is to freeze all your funds if you are located in USA. Madoff didn't use any client funds to trade stocks but I believe that it would not have made any difference had he traded some some stocks with the client funds. There is no such thing as 80% ponzi or 100% ponzi.
that’s a pretty good statement. So what about brokers? They are stping less than 10 percent of flow
  • #17,000
  • Jun 23, 2023 3:07pm Jun 23, 2023 3:07pm
Quoting Takisd
{quote} that’s a pretty good statement. So what about brokers? They are stping less than 10 percent of flow
At least they don't openly admit using client funds to pay for b-book losses. Most don't even admit b-booking the flow and claim client funds being segregated.
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