We would like to thank everyone who has contacted us about 4XProp. There is NO PIP rebate paid to 4XProp from traders activity. FXCM does pay a rebate to the IB when traders are being evaluated only....not once they are trading prop for 4Xprop. 4XProp only makes money from a percentage of traders profits. This trader is not consistent with the type of trader we are looking for and probably would not be offered a position at 4XProp. We are looking for shorter term, more active traders. FXCM was initially chosen because of its size, financial stability, international presence, broad client base already comfortable with their platform and service, and their offering of software to evaluate and track traders in a subaccount structure. The payout is VERY clear, and sent to all traders that request it. Capital allocation has already been answered in an earlier post. There are general rules...not specific rules. It would be very difficult if not impossible to give some sort of equation for every possible scenario of trading. I hope that if you think about all the different permutations you will understand why and agree. Everyone definitely has the right to have their own opinion of what is and what isn't a prop trading firm. It is very clear that firms that ask you for thousands (I have seen up to $15,000) of dollars for "training" and then you will be hired as a prop trader is definitely not a prop trading firm. We NEVER ask you for money....you trade OURS. You NEVER send us money. You are NOT responsible for any losses. That is our definition of a prop trading firm. All we ask is that you trade a Standard or Active Trader Account at FXCM (which an IB does receive a rebate from FXCM during the EPP) so we can determine if you are a good fit. It may not be for everyone, but based on the overwhelming response we have had we think there are a lot of traders that can benefit from our firm.
Even if they get a few pips as an IB, this seem less a scam to me than those firms with charge 10k training fee (so that you can trade their capital, lol) and cut the trader off if he lose about 1k or so.
Question for the firm: let's get past this pip rebate/FXCM discussion for the moment. What trading firm/platform does your firm utilize for its fx trading? Surely, you do realize there are far better alternatives than FXCM for trading spot and provide a cleaner interaction between the trader and the rest of the market, right? So are you using another trading resources, or is this your vehicle for your fx prop model?
We chose FXCM for the following reasons: 1. One of the largest FX firms in the world. This is important to us because since they are so large there is a good chance that interested traders are already trading there. Since we started 4XProp many of the traders already have accounts there so it was easy for them to start the process. 2. International presence. Few firms have the the same international reach that FXCM. They are regulated by all major regulators and offer support in 12 languages. 3. Sub Account capability/risk analysis tools. FXCM allows us to have separate sub accounts for our master prop trading account and superior risk analysis tools. A lot of research went into selecting an FX firm. If you know of another firm that offers the above capabilities please PM us. Obviously we want to attract as many talented traders as possible so if we need multiple FX relationships we would explore that. (I would prefer this thread not turn into a thread about which FX firms are good or bad).
We have tried to make everything as transparent as possible. All paperwork is sent to anyone requesting it. Spreads are the same whether you go through an IB or not. As a matter of fact, traders with over $5,000 in their FXCM account actually have spreads REDUCED!