just dont answer to such an ignorant fool .. he missed this : another one to recommend apterostrading.com
thx for Aptero hint. Here, @42:43, one of the bosses at The Funded Trader explains how they first select traders based on "sophisticated statistical models", then they use huge leverage to "front" their alpha-traders:
At first I thought you said "front run"... LOL.... Since they supposedly know who the good traders are, once they put in orders, then the firms can front run them and get fills faster. After watching about 5 mins of this interview, I'm not exactly sure what he is saying. Is he saying they can copy the trades of these traders with more leverage? He said that when going from B book to A book, which I assumed meant from Sim to Live trading, some traders won't do as well. So its almost risky to give them too much leverage. But then he concludes with saying there is a huge edge with what they are doing. But what is it exactly? Are they copying trading? Fading the trades? Front running the entries???
Yeah, its "front run" not "front". Sometimes I compete with myself in being succint. Anyway, there is this other trader Bernd Skorupinski who had been more then x100 times on the top of FTMO's ladder borard with $2.0M in payouts. So he wanted to start his own prop-firm and in one video he talked about all the gorry details. In essence he was just to buy various services, brokerage, web site and statistical modeling and put them together and have a business. So, he got everything together except firm that was supposed to deliver the statistical model failed. One can easily see how making that statistical model can be a huge challenge. Traders with trading plan are a huge minority. When one listens to interviews with discretionary tradars and when they talk how they started basically when they were beginers they just gambled, used Martingales and other stupid stuff. Vast majority of traders just gamble. This behaviour would practically mean that one is just throwing a ton of noise at statistical model, while keeping sample ridiculously low, because one can pass challenge with less then 5 - 10 trades. There is no statistical model in this universe that can pull statistically significan inference out of 10 samples. So, that statistical model that separates A-book from B-book traders is the hadest part to get right. That's why underfunded prop-firm newcumer who overwhelmingly focus on marketing and cash flow so quckly go under. They don't pay A-book traders, then A-book traders start complaining all over the social media and then marketing stops working, and cash flow evaporates. Here is Bernd's story:
Hire is interesting statistics directly from the Apex Trading prop-firm. If you go to their home page and scroll all the way down to the bottom of the page, or mayb search home page for "EVALUATION DISCLAIMER", you'll find this text, as well as percentage of people who pass sevaluation: "The customer pass rate of the evaluation program was 43.13% between January 1, 2023 – Sept 1, 2023, who traded at least one evaluation and obtained a PA Account during this time period. The Evaluation and PA are meant to be as close to a realistic simulation of trading under actual market conditions, including commissions, to mimic real market conditions, and the evaluation is difficult to pass even for experienced traders. The event is not meant to train the customer to be better but to be a challenge to pass. The Evaluation is not suggested for individuals with little to no trading experience." https://apextraderfunding.com/
Nice thread, never heard of this prop firm before. It seems like the new prop firm wave is about instant funding firms, seems to be a good marketing argument since you pay to get directly funded. I think the safest option is to wait for those newer firms to prove themselves and stick with the most reputable ones since they have more data and infrastructure. This is true for forex or futures with the biggest firms like ftmo, topstep etc... Btw you mentioned Apex stats, I think if one firm has some great stats is them. They might have the highest volume in the futures space even with all their payout / denial and trading account closing issues. However this stat is very missleading since the 43% is about traders who got to the PA but it doesn't say the pass rate per 100 evaluation which would most certainly be lower than 10%.
This new video shows court documents from currently ongoing case in which Apex is sued for non-payment to it's developer. Anyways, court case's discovery documents reveal that Apex is making a cool NET PROFIT of around $15 M / month, every month. Not too shabby!
Top tier prop firms like Topstep and FTMO won't go bust. They have the reputation such that they can charge a premium for their evaluations, so they are cash flow rich. The firms that go bust are the new small firms who need to cut prices so much to compete, but that leaves them with no cash flow to pay winning traders.
"They can charge a premium for their evaluations, so they are cash flow rich." that means they make money from test fees rather than actual trading profits!
Of course, since most traders suck, there generally no profit for the prop firm to apply profit splits against. Btw, Topstep does A-book winning traders while they are in sim, and they move successful traders to live accounts. Topstep is able to successfully A-book winning traders because they have gathered prop firm trading data since 2012, so they can run their calcs to ID the winning traders. Pretty sure these new small prop firms don't have the data, nor did they invest in data analytics in order to A-book winning traders. Thus they are more likely to blow up.