Quote from: CalafioriRicardo on Today at 05:11:05 AM

Quote from: goldkingcoiner on July 22, 2025, 09:27:33 PM

Prop firms that offer challenges or entry qualifications for a fee are basically scams.

They make their money by demanding users to pass a challenge for which the user must pay a entry fee. And not only once but sometimes multiple times.

The problem here is that no trader is always 100% on a profit streak. Sometimes they make short-term losses, which they can later make up for. But if you fail one of the challenges, even once, then you are out and have to pay a fee to take the "challenge" again. It is basically gambling. You are betting on whether or not you will make a short term loss, even if in the long term you are a good trader who makes a profit.

A real prop firm hires traders, and does not demand they pay some entry fee for some challenge.

With all due respect, that is not true.

No prop firm will "hire" you without insight into your previous successful trading and proof that you are a successful trader. Why would they?

Of course, no trader is 100% successful all the time, if a person like that existed, they probably wouldn’t be using prop firms but would own a hedge fund, and billionaires would be competing to pay them more. This isn’t the movie Limitless, after all (if you know what I mean).

Prop firms are not scams, at least not the ones that have been around for a long time and have a reputation as excellent firms, registered in countries with strict regulations (we’re not talking about offshore scam firms that operate as Ponzi schemes, like some that were part of the Forex prop space). I don’t want to advertise anyone, but the ones I can personally vouch for are FTMO and E8.

I’ve been using both for many years, they offer very favorable conditions, 24/7 support, and most importantly (100%) - both pay out. If you don’t have some kind of edge in the market, if your trading strategy isn’t profitable over a sample of, say, 1,000–2,000 trades, and if you don’t have very solid risk management, then of course paying for and attempting prop firm challenges is a terrible decision, because in 99% of cases, you’ll lose money.

There was a statistic, either from FTMO or the ex. MFF, showing that only 10% of traders pass the evaluation process (which has 2 stages: 8–10% profit on the first, and 5% on the second), and only 2% make it to their first payout. Which is crazy if you ask me, but that is not the prop firms fault or showing that they are a scam, it is the traders fault.

If you know what you're doing in the market, or at least believe you do, I don’t see how you could be negative long-term in the prop firm space. After all, you have a 10% max total loss limit on the account and a 5% daily loss limit. Risking more than 5% daily, or even 1% per trade, is madness and 1000% gambling.

Ultimately, prop firms are meant to help you build up your bankroll over time. You get access to more capital, which means bigger payouts, and in turn, you can use that to fund your personal trading account.

FTMO even has a program where, if you can prove you're consistently profitable over a period longer than 8–9 months, and if you haven’t blown your challenge account, you can get an offer to join their trading company and become a professional full-time trader.

I never said that prop firms hire traders without previous proven experience. Obviously they would want to know the trader has a good track record otherwise what would be the point in hiring them? What I meant is that even good traders make mistakes and that even they would often fail these ridiculous "challenges", which challenge prop firms demand. Traditional prop firms hire based on long term trading results, not short term "challenges" for an upfront fee.

Challenge prop firms make most of their business profits from these challenge fees, not from the actual traders PnL. Which is why I said they are basically scams.

Real prop firms hire based on skill and do not demand money upfront for the trader to prove themselves with such "challenges". The term "challenge" should already serve as a red flag, as it is nothing but a marketable keyword for excitable, gullible newbie traders.