Myforexfunds statistics: October New live accounts: 3544 Passed phase one:18% Passed phase two: 31% of traders who passed phase one. Reached first profit split: 4% of traders who passed phase two. So 2/1000 of new live accounts reached first profit split. November: New live accounts: 5718 Passed phase one:10% Passed phase two: 24% of traders who passed phase one. Reached first profit split: 3% of traders who passed phase two. So 7/10000 of new live accounts reached first profit split.
The interesting thing is the failure rate among those who trade new live accounts are higher than those who trade phase one.That means those who are newly funded immediately place big bet in order to make big money at firm’s risk . I always suspected traders who reached consistency is lower than 1%, now it looks like it is even lower.
especially in forex where there is likely no edge unless you are a true macro trader taking positional bets.
Those are not serious firms, nor serious applicants, though. Not surprising anyway. Since @newwurldmn mentioned FX, here's data from futures trading with Earn2Trade: And that's the amount of traders who pass. I imagine that out of these quite few ever sustain their performance long enough that they get paid.
One of the fox bucket shops shared their users stats (by law they had to) and it was like 2percent are profitable in a given month and every month it’s a different 2percent. not quite the like the line from Rounders “how come the same ten guys make it the final table every year?”
I am sure some people will call me crazy, but I'd be willing to bet there's some respected traders here who couldn't consistently pass some of those test and stay funded. Only people who will survive them is people with an actual direct trading edge. There's some successful traders who get their edge from things not necessarily directly related to trading skill or an actual edge related to alpha or anything. The way a lot of them do it is smart and have no issues with it. But the issue I take is when they use certain things to their advantage that 99% of other traders can't and then they try to teach others and new traders what they are doing(without knowing or explaining the other aspects of why they are successful and where there edge is actually coming from). It's just another trap for aspiring / new traders to fall for / fall into, as if there isn't enough already.
When it comes to E2T and friends: How could these firms make sure some guys don't just pass randomly? They can't. In fact, it's highly likely that the vast majority of their applicants trade random, but a few will pass by chance. Similarly, in backtesting you can test as many randomly generated strategies as you like, and some will pass by chance. Now, given this, relying on opaque traders with such a short track record ought to be a pretty shitty business model. I.e. the firms need to make money on something else than trading profits, and that probably means preying on applicants (having them pay fees, failing them, and urging them to do it all over).