"Why is this?" Some traders are either unwilling or unable to see through the crap when they read a blog or hear someone tell them they can take a small account and turn it into a large account. In theory, anything is possible. If a penny stock doubles each day, then you'd have over $1 million in 30 days. If you took a $5,000 options account and doubled your money on the first trade, then you would only need to go "all in" by repeating that process on seven subsequent trades to reach over $1 million. Of course, these odds are astronomical and do not depict reality, but instead provide examples for amusement. In other words, to separate FANTASY from REALITY. As I've said in the past, NO AMOUNT OF "EDGE" IN THE WORLD will compensate for the lack of EQUITY, period. Bill Ackman and his fellow hedge funds are taking a beating on VRX. These are all smart investors, but still got taken. If they survive this debacle, it's because investors have enough remaining EQUITY in their accounts to stomach the draw, and of course faith in Ackman. Bright's traders have to put up $50 GRAND to trade firm capital. The late great Don was shunned by critics who labeled him for wanting such EQUITY, especially when his competitors would take new traders for $2k-$5k capital contribution. But Don Bright knew better, because he was in the game longer and was less interested in the "churn and burn" model. Lescor traded with Echo, and had more than $100,000 in EQUITY with the firm. Tuco's SEC filings discuss some numbers, although many of their traders were not profitable and suffered substantial losses. However, the firm did have over $10 million in EQUITY to fund their day trading operation. I'm not sure about Jump, however Maverick was from World Co, and the post he made STILL holds true today (see below). You cannot expect numbers, even after 6 years, if traders lack EQUITY in their live accounts. Just as you cannot expect AMP to have a significant number of "profitable live traders" who open small day trade margin accounts. If the majority of traders opt for the 30k combine, then how do you expect them to build enough equity in their live accounts to last 6 years? They can have "edge" and "discipline" from having traded the combines, however the major barrier to overcome is the limited number days in building their EQUITY. This is why the smaller combines are "training combines" because traders face an uphill battle when it comes to the live account. The only "trading combines" in my opinion are the 100k/150k, where at least there is a higher probability of making it through that 10 day barrier.
Here is Maverick74's post...it's a classic. "Let me re-phrase what I'm trying to say. A trader with 10k in capital has close to zero chance of ever making it. I know that, Don Bright knows that, Bob Bright knows that and everyone on the street knows that. This is what I was trying to get at when questioning Don about taking in 10k accounts, or youngsters as he likes to call them. Look, when I started at Worldco back in 2000, we had arguably one of the best markets in history to trade. The only way we could produce good traders was to let them go anywhere from 25k to 100k deep in the red in their accounts. Even the guys that came in with capital, usually 10k to 20k, we let them go 50k into firm money. The good ones dug their way out and did well. The bad ones we cut. Net net they never really lost that much money on them as it was mostly commissions. I know I'm not suppose to say this but the biggest fraud of the prop firm business is not commissions, or leverage, or whether or not you need a series 7, it's the fact that firms sells the dream of success to young guys that don't know any better. Well I do know better. I know it not because I'm a smart ass trying to pick a fight with Don, this really has little to do with Don in particular, it has to do with the fact that I've been in this business for 10 years and have been around over 1000 traders who have gone through the system. I know the numbers because I've seen the numbers. There is a direct correlation between the amount of capital you have to trade and your odds of success. Not leverage, CAPITAL! These numbers are indisputable. I know them, I've seen them. At the end of the day, after 10 years, I realized the biggest edge in this business is not computers, not charts, not leverage, but equity. Pure old fashioned good american equity. If anyone tries to tell you otherwise, they are probably trying to sell you something." The actual post is from this closed thread: http://www.elitetrader.com/et/index...-new-payout-model.204053/page-14#post-2915051
Good old Mav, we need to have an episode of "Where are they now?" on him. I have been Ignoring the gentleman for years, so I unignored him for 5 minutes, and I see he is still active on ET, even follows me, but somehow he avoids participating in the TST thread anymore. Since he has been the biggest shill for them from day one, I wonder if he changed his mind about them? After all, we critics have been right (see our ideas implemented) and Mav has been wrong. Hey Mav, no shame about changing your mind occasionally and if you want to say you are sorry, apology accepted. Now going back to the quote, I still don't get how could he back TST so badly for years when even he knew the capital that TST provides is insufficient for long term survival in most cases...
I think I might know why he no longer participates. Maybe he just got ground down by the endless negative baseless comments from certain members who have been broken by the market. you are da man Pekelo, all your ideas have been implemented, ha. The idea of yours that TST should automate people getting people flat instead of taking actual responsibility for their actions. pure genius rofl. Probably because he wasn't mentally deficient. What a genius the guy was he knew all along the capital they provide is not sufficient for long term survival in most cases. Genius. The vast majority fail Pekelo, they fail because they have no edge, no discipline and over leverage with poor psychological skills. It doesn't help giving more capital to a losing trader they will just lose more. You are just repeating the same old tired non argument. carry on.
Day 2 FTP update. nosebleed day. balance -$1969. max draw is $3k for week so I only have $1k draw left for next 3 days. Lets see what can be done.
I know it is too late now...but I think you should have included the NQ in your quiver for the days that CL is not working out.
I will check NQ out, never traded it before. The dollar strength was holding oil back from expansion, damn. I need to get busy with the 20-25 tick scalps on oil to nail this sucker. It aint over until the fat girl sings lol. If I drop another $1k I will have to hang up my mouse for the week. I am going to give it more attention now I am in drawdown.
You should take a look. It trends nicely and moves better than the ES most days. At $20 a point you need to use more contracts, but it allows for great scale in/out opportunities on good trend days. Today was a nice 38 point move that started right before the open if you held it all day. $760 per contract is nothing to sneeze at if you can hold all day without getting antsy. Good luck on this.
Day3 FTP took another beating balance now -$2985. $3k max draw per week so no more trades this week. Next week I will have another $1.5k draw available and thats it before I am sent back to the combine. The account balance must be positive day 10. My recovery strategy is going to be to be very picky with next few trades. 3 lots on CL with 25 tick stop. I need to nail 120 ticks on a 3 lot then 40 ticks on a 4 lot to hit target. I will be cherry picking days from now on. Tough ask but doable.