These firms should add a multi-level marketing aspect. That way bored housewives can try it and recruit their neighbors and so on. $ never ends.
actually, years ago the rage was women setting at their breakfast tables making tons of money while the husband was away to work.
It’s not clear how long the assessment is, but you need about 2 years of trading returns to verify Sharpe ratio of 1.5 (to reject SR of zero) with 90% confidence. Thats about 9 grand to receive a rather measly amount of capital (assuming they don’t come up with reasons why you can’t have it). If you don’t think that’s rigged, I have a bridge to sell you. It’s rather simple. To change my mind, show me one of these “prop firms” which actually makes money from trading as opposed to from “evaluations” or whatever they call them.
I just spent the past hour and a half Googling... what are trading prop firms...there are some supporters out there, But their business operations are essentially a scam overall. Someone is Always using someone else in this world to get rich. If you don't realize that, you're the greater fool.
There are legit firms that make money from trading their own capital, places like Tower Research, Jane Street or Jump. There are also, sadly, outfits like the one described by the OP.
Yes it is a scam. Because a credible firm would let you do the assessment for free. A credible firm is interesting in locating talent and they would pay money out of their own pockets to pay for the cost of doing talent discovery. All firms that requires you to pay for "assessment" / "challenge" are scammers and fraudsters.
Curious how you come to this conclusion. Not saying it is inaccurate, just how one determines it unless they've gone through that firm's program.
Here's my two cents as someone who's been both a critic and proponent of these type of firms (bucket shops) and have taken out in excess of 30K from Topstep alone. I like to call these firms bucket shops as even the few firms that will give you a live account tend to have you trading on a simulator for a long time before giving you a live account. With the bucket shops from Livermore's youth your orders never hit the market and the few winners were paid by the losses of the many losers. These firms are no doubt the modern day equivalent of a bucket shop. The business model is 100 % built on the very high failure rate of would be traders. Further, they've added rules that make it hard to pass by design. For example, you're given a very tight drawdown to begin with and this drawdown will TRAIL as you make profit. As a simple example, my last 'funded' account with Topstep was liquidated with a -$500 balance. I don't think any serious firm looking for trading talent would liquidate someone who lost $500 day trading a 100K account. 1. Is it a scam? I'd say that depends on your perspective. These firms may say they're looking for trading talent and looking to fund traders. Further, they'll market their accounts as 50K/100K/150K, typically, when the actual account size is effectively the drawdown you're given (1.5K/3.0K/4.5K). This is from what I can tell simply not the case and I can argue why if anyone wants to object. So, from that perspective I'd say it's close to a scam, although they do actually provide you a shoestring to trade on, so technically, there is some 'funding'. 2. Do they pay? Absolutely. If you go with a reputable firm and not one that showed up yesterday, you will get paid if you follow the rules (just make sure you understand them before giving them any money). 3. Is it realistic to pass their test and pull out money? If you know how to trade, absolutely. Most traders lose money be that with a broker or a bucket shop. 4. Can bucket shops be a good opportunity? For an able trader I definitely think so. Jesse Livermore gamed them and it was how he put together his own stake on multiple occasions. 5. Is Raentrading any different? I first saw this firm on Twitter and initially had some expectations, but I have now come to the conclusion it's most likely EXACTLY the same as any other bucket shop. They just have a more slick presentation and comes across more professional. If anyone have any proof otherwise, feel free to provide it. For example, when I first visited their webpage, the 'registration window' was closed and I had to register to get on a waitlist. Then, like magic, a new batch was opened the next day where I could sign up. LOL. Personally, I prefer Topstep for now, although they also added some rules since I first started trading with them which makes it a less attractive opportunity than it was last year. Maybe that was more than 2 cents.
For all those who "knee jerk reactionally" call these funder firms, "scams" --- then what do you call those traders who actually are able to take payouts from said funder firms? And not just once.....but consistently Don't get me wrong --- there are only a handful of under firms that I "trust" but they are not all bad --- I like to see a history of payouts and having been in business for at least 4-5 years --- and those who put traders in "LIVE ACCOUNTS"
The fact that some people are able to actually get a payout does not make it less than a scam. People make money in MLM structures and even manage to convince Nigerian princes to send them money. Here is the main question - if they really are looking for talent, why not offer this evaluation for free?