He was complaining about a rule that makes no sense. Would you get ride of a very profitable trader who makes you money because of one silly rule breaking? Also, even if you don't want overnight trading, why not just kick every trader out of position at the end of the day? IS automatization so hard for these firms? The stupid rules are there so nobody stays on the "live" account for too long, because that is the firm's money, aka they are bucketshops. Glad to inform you about real life.
I think we actually beat this horse to death about 10 years ago. So for fun and IQ check, let me ask you guys and firms this: What is or could be the biggest profit opportunity from the Firm's POV? We have talked about this years ago, but lately nobody seems to bring it up. I will answer the question later today, if no correct answer is given.
I would get rid of any trader that breaks a rule. They are not really hard to understand. Why there are such rules is not up to me. I have no opinion about the rules. Are they stupid? Maybe. But I think it is very clear that anyone joining such a firm understands that if they break the rule, they are out. Stupid or not. Supportive or not. I personally do not find the rules that difficult to obtain. I have had an account for almost 3 years without ever breaking a rule with TST. And I'm pretty sure I had a live account with them. I also think that there are other firms that works like Laissez is suggesting but that is not my experience.
Is it "profitable unprofitable trader makes himself and the firm money by trading the firm's capital paying to use a demo account?"
Not that it matters at this point, but what may not have been clear in this post was that the answer I received from customer service was this: "Feel free to trade the way you want." I did get this answer a few hours AFTER the electronic close having already broken the rule, but with that answer and the position not liquidated I figured that everything was okay and kept monitoring the trade for the next 13 hours or so with a hard stop in the market. It was only 16 hours later that my account peaked around 7K and my account was suddenly liquidated. Obviously not an auto-liquidate (which there should have been at the electronc close if they really cared about that), but a conscious decision to boot me as I was becoming a potential liability. LOL. If I hit a daily loss limit or weekly loss limit it would not be anything worthwhile arguing about and probably this isn't either. I just think it shows that they're really not interested in a trader making money because if they were - they would have given me a warning. They also admitted to mixing up my account with someone else through customer service. A guy who allegedly had 2 prior rule breaks and only got booted on the 3rd rule break. So...it's clear that they use some discretion here...
They could do it a more trader-friendly way, fine them. At least for the first offense. If I am a trader I would rather pay a fine, then being kicked out and start from scratch again. That takes time and time is money. Even if the fine equals the new Combine, at least I don't lose 2-3 weeks. But again, in today's world not having automatized the everybody moves to cash at the end of the day rule is simply unforgiven. So they are either incredibly stupid or they have a more sinister reason for the rule. Hell, they could do BOTH, automatize it AND fine the trader. Best of both world! If you are not in cash 5 minutes before close, your trade is closed for you, and you are fined for X amount. That makes extra money for the firm and teaches the trader a lesson. Just curious, why did you leave them after 3 years?
The question about whether or not it bothers me if and where the money comes from, let me ask you this: I read your reasoning but it is not apples to apples, in case of OTC FX or even Exchange traded Futures all those participate are aware of the fact that for every winner there is a looser a zero sum game Where as in this business model the so called company is hiding the fact that they pay the winners from the fees collected + the main aim is to put people on hamster wheel for repeat tests. That is if what you are syaing is true becasue to be fair there could be two types of companies one less ethical than others! 1) Make money by test fees + pay winners from test fees revenue and pretend that there isa real funded account 2) Make money by test fees + do offer a real account 3) No BS about test etc purely fund traders on track record and performance By the way I thought definition of arcade is simply leveraged funding + connectivity/ technology based on pure first loss so again a different model no pretend of funding for talent and masses etc Any way just becasue you are good at trading and got through does not make the above model 1 and 2 ethical
"..... but when you realize that the company loses money from you winning and potentially a big loss if you do well - I realize it matters a lot. 100% agree
I am sure you guys thought very hard, but no winners. The correct answer is: Piggyback with huge leverage. First of all, you don't need 50-200 traders, you only need 4-5 who trade uncorrelated markets. Second, they can afford to pay his winnings from the firm's money because they are making 10, 20 or 50 times more. Anyhow, I won't describe the whole scheme in details in case they actually haven't thought of this...