Dreams and hope will always be good selling points. They attract wannabe traders who don't have money to open a trading account.
Seems to me they provide very little benefit to retail traders. Now, if they did what Richard Dennis did to the Turtles who were trained to be good traders with a fixed salary and profit sharing on top of it, they might have a viable business model. Of course, that would mean they are good traders to begin with. And if you were a good trader, you have the capital, why would hire anyone else to do your trading?
True, most traders who attempt these kind of evaluation accounts will fail and will be stuck in the hamster wheel of funding fees. It could be useful for some traders who have no funding for themselves due to whatever reasons, however it is unlikely that traders like those will have the experience and will be good enough to pass the evaluation account with all the strict rules that come with them. Traders who do have the experience and are good enough to pass will most likely have at least a few thousand dollars to fund a small account themselves, have no need for these kind of funding companies and won't waste time on evaluations with all the restrictive rules that come with them.
Then they should've chosen funding companies that do not require any fees for some kind of evaluation stages but only do profit-sharing when they are successful. In the OP's case though, that still wouldn't have mattered much as he lacks even basic math skills to succeed in trading when he finds it difficult to figure out how to trade with standard lots in forex trading: https://www.elitetrader.com/et/threads/who-else-thinks-forex-trading-is-stupid.374728/
Although I am no fan of this "Pay for test pretend prop firms" you are barking the wrong tree .. did you not know that this business model means if you fail evaluation the fee is not refundable? how can you blame them? it doe not matter if the evaluation is on demo or not.... any way it seems many have said the same thing to you but you don't understand
--If you are going to try funding firm evaluations/challenges in my opinion you should only consider ones that have fixed max daily loss limits (and should not even consider ones that have trailing max daily loss limits)---same goes for Max Total Loss Limit--you should only consider those that offer Fixed Total Loss Limit drawdown--not Trailing drawdown. Now beyond that always consider this--if you use funding challenges with fixed daily drawdown limits and fixed max drawdown limits and are not hampered by ridiculous unrealistic "trailing" drawdown rules-- then if you fail the challenge due to violating either the fixed max daily loss or fixed total loss limits then in most cases --in my opinion--you are still better off than if you had taken that amount of money (the fixed max daily loss amount or fixed total loss amount) and put it into a regular trading account and traded with it ---WHY---? lets look at an example Say you sign up for a $200,000 (face value) challenge (***keep in mind the $200,000 figure is for marketing purposes only--in reality--the only amount you really have to trade with is what the fixed day loss limit is and what the fixed max loss limit) Say this $200,000 face value challenge has a fee of $1,100 and has a fixed daily loss limit of $10,000 (in a session), and a fixed max total loss limit of $20,000. You pay the fee and start the challenge, you break no other rules except that you violate the $10,000 fixed daily loss limit. As an example you started the day with $200,000 balance - to violate the $10,000 fixed daily loss limit your account balance (during that session) goes below $190,000 (keep in mind it doesn't necessarily mean $10,000+ in closed losses and that if you have open positions with unrealized losses that temporarily take you that session below $190,000 then you fail. However--lets look at the other side of this coin, instead of taking this challenge you opt to open a regular real money trading account with a broker and deposit $10,000 cash into it. You start trading and and take the same exact trades that you did with the funding challenge account and your losses reach $10,000---your account is now at zero and closed - lets say instead you have open position(s)- and no closed profits or losses and the market moves against you and your open position(s) are approaching near $10,000 in losses--virtually every broker at that point is going to auto-liquidate your positions and now your account after broker liquidation is either going to have very little if any money left--or may perhaps be negative and they will be contacting you to - to request that you deposit more funds into the acct to make up the deficit to at least zero. So in the funding challenge case you lost $10,000 and violated the $10,000 daily loss limit and your challenge is failed and you have lost your challenge fee of $1,100 - so you are out of pocket $1,100. In the case of your real money brokerage account you lost $10,000 and you are out of pocket a full $10,000 (and perhaps more if broker auto liquidation did not happen quick enough in a volatile market). In either case you have not demonstrated the ability to trade profitably and lost $10,000 trading in both cases, but at least with the funding challenge your loss was capped at $1,100 whereas with the real money account--taking the same trades--your loss is a full $10,000. The technical difference only being this in my opinion---with a real money account you do have (in some cases) the possible option of transferring or wiring additional funds into the account before broker auto-liquidates your positions--so "technically" you could keep your losing positions open past the $10,000 loss mark in a real money account (versus auto-failing a challenge at $10,000 loss limit violation) and see if it turns around in your favor (***keep in mind though 90+ times out of a 100 that "hopium" turnaround in your favor will never happen and you will just likely, in most cases, lose more money adding on more to a losing position)
Although your point about "fixed max daily loss limits" is valid , the crux of the matter is with the "Pay for test and hope to get funded" business model is the interest of the trader served? what is the real motive of the "Firm" = A) collect thousands in failed fees and fund few or B) genuinely fund trades ? If the aim is B) then why do all these gimmicks of " paper money / Notional or real funding etc ... sure there is no free lunch but True prop firms hunt talent at own costs... ever wondered why almost every week this "new wild west" type of prop firms are mushrooming all around the world ! If they were genuine props there would not be this mass production ! because then real money would be at stake!
As long as the funding firm pays the trader 100% real money of what they are owed promptly, on time--every time, with no excuses, delays, or glitches or gotchas--in my opinion it really doesn't make any difference whether the funding "challenge" firm has real money at stake--as long as they pay all traders with "funded" accounts their % of the profit they generated thru trading in full on demand--consistently and w/o fail
it really doesn't make any difference whether the funding "challenge" firm has real money at stake... sure, as an Individual one can think like that but look at big picture, if the firm as a single entity does not take actual trades,, and IF all of a sudden huge no of funded traders make gains .. where is the money going to come from? then either have to put money from own pocket or go bust.. so how good such a firm for you any way ? which has a potential to go bust anytime due to this factor..