There is going to be increased regulatory scrutiny for firms that combine "training" with some sort of "trading account" - no matter how they package it or market it or describe it. The NFA is actually at the forefront of the investigations, and is referring those involving futures markets to the CFTC. Hopefully the cases involving pure equities will achieve a similar level of oversight some day... http://www.cftc.gov/ucm/groups/publ...egalpleading/enfprotradingcomplaint120711.pdf
I just like how the salespeople try to justify the 10,000 dollars. "ignorance is more expensive" "90% of traders lose, you can't afford to try this without education." "they don't teach this at Harvard, and we teach things never found in books." "you get hands-on education by a true trader." blah, blah, blah.... all of this crap tells me nothing. there is no proof that what they teach is consistently profitable for a number of traders, and I have yet to see audited statements from all of their traders. with pilots, you at least can find out if they ever flew successfully and for how long. what if someone said, "hey i'll teach you to fly for 10,000 but i will only tell you analogies about flying instead of actually showing you I can fly." I say do two live shows. one you sell 10 ES. the other you buy 10 ES. one group will think you are a genius. then charge 10,000 and use that cash to pay off the losses from the other show.
I swear some of you are so fucking clueless on these firms you're just posting what you read on some other board, from some other rambling troll mad at prop firms. Why don't you email these guys and ask them? I've talked to these guys in person as well as other firms, and some of the bullshit regurgitated on these boards is hilarious how far beyond the truth it is. Do yourself a favor and research yourself.
At the end of the day IF these firms had excellent strategies and had large enough capital they would bring in new guys, train them , and then back them with capital. Over time they would make much more in their cut of the profits than some "training fee". Basically these firms hire anyone with a pulse rate, make promises, charge a ridiculous amount for "training"....and throw shit against the wall to see what sticks. At the end of the day they take zero risk and collect fees. IF I was a new guy getting into the biz I would stay well clear of any place that charged a ridiculous amount to learn. 10,000 is beyond ridiculous. Either get a job as a trader's assistant, learn, and hopefully get hired by that firm or spend a lot of time (at least a year) reading trading books, developing a strategy, then trade an account with real money (not sim) and build a track record. Then take that track record to a real trading firm and hopefully get backed. Unfortunately most , if not all, of the big/real firms have gotten rid of any kind of training program for new guys, and really only hire experienced guys with track records.
Read what you just wrote again. I'm playing devil's advocate here as I agree with the spirit of your argument but you are contradicting yourself. You are saying instead of taking in risk free easy money, they should instead tie up their capital in risk with an uncertain outcome? You wouldn't do that nor would I if we were offered both choices. Nobody and I mean nobody would turn away risk free money in lieu of taking large amounts of risk. The fact of the matter is, most prop firms that are backing guys are not trading moving average cross overs but rather market making in some form or another. They are primarily technology firms. SMB has no desire to spend the 10's of millions to build that technology so they are taking the free and easy money. It's actually a great trade on their part.
I will let you trade with MY funds. First, you MUST be educated "properly". This can be done in 5 small easy payments of 2,000 each. That is nothing. Then, once you passed the SIM master challenge for 2 months, and provided you paid for all small expenses, you can trade a 5k account. If you lose 1k, you will be kicked out. If you make money, you get to keep 50%, minus all small charges. This is a win-win for me!!!
I hear ya. Risk free......sure. You do make good points. But in my opinion if they had a real profitable strategy they would make much more in the long run backing a guy. Sure they are making 10k or so per guy. But if instead that same guy became a successful trader they would make a ton more. And let's be honest..the supply of people putting up the 10k is dwindling each year as time goes by. At the end of the day they aren't really a prop trading firm. More of a brokerage that offers high leverage and offers to train people for a fee( which again...10k is absurd). And let's be honest.....they really don't have much incentive for their trainees to make it. If they don't....no loss/collected fee. Move on. Throw some more shit against the wall and see what sticks.
What are you basing that on? I know guys who have traded their own money who feel very little pressure and had work habits that were less than stellar. They would take off at noon to go play golf....catch a Cubs game...etc. There is no way they could have pulled the same stuff if they were trading someone else's money at a big firm. If anything a guy works much harder knowing that he will be shown the door if he isn't profitable. I have been on both sides..traded for myself and worked for big trading firms. Always worked a lot harder and put more effort into it when I had a big firm behind me. I knew if I didn't produce I would be shown the door. Forces you to work harder and "smarter".