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I've got just a bit over 20k from Apex Deel payouts, and obviously spent way less than that on eval fees.
Regarding losing money when you succeed, another example is the lotto. They lose money paying out winners, yet it's a multi billion dollar industry.
Personally I like these funding firms because it protects me from blowing up accounts and losing big. Typically I have a strategy that works really well for a few months, and then as I ramp up the # of contracts, the market changes and I blow up my self funded account. With these eval firms, I don't need to waste time ramping up an account. I can just go full steam ahead from the 1st month on a new strategy I've been working on, get payouts for a few months, and then reset the account when the market inevitably changes and do it all again.
Trading: Primarily Energy but also a little Equities, Fixed Income, Metals, U308 and Crypto.
Frequency: Many times daily
Duration: Never
Posts: 5,058 since Dec 2013
Thanks Given: 4,409
Thanks Received: 10,226
There's a reason they call the lottery the stupidity tax. It's basically legalized theft and makes what we are talking about here seem like childs play. Every year, Americans spend a mind-blowing $70.1 billion on the lottery. That's $200/person and includes children and babies! This illustration shows how the NY lottery pays out just 31% of the proceeds of the purchases in prizes!
Another example is daily fantasy sports. Not regular sports betting with balanced books, but specifically daily fantasy with apps like DraftKings. The payouts all come from participants pooling their entry fees together, a small handful of winners get paid out, and DraftKings takes their cut. Not too dissimilar from Futures Prop Firms. Both have more player skill involved than purely lotto / slot machines. Then there's also online Casinos, like Stake, which has insane growth, and same thing, lose money paying out winners.
Whether it's the lotto, daily fantasy, online slots, or sim Futures trading... there's just a massive global appetite for this.
Bringing the discussion back to the original topic, MyForexFunds, I suspect they were doing something additional that really got them in hot water
Trading: Primarily Energy but also a little Equities, Fixed Income, Metals, U308 and Crypto.
Frequency: Many times daily
Duration: Never
Posts: 5,058 since Dec 2013
Thanks Given: 4,409
Thanks Received: 10,226
I was talking about this last night with the wife. We were watching the Eagles-Vikings game and the Draft Kings commercial came up and it was Vikings +210, Eagles -255*. So if they can keep an even book they make $45 on each offsetting bet. Again who would ever bet on odds like that. I think you need to be right 54% of the time just to breakeven.
*For the non-Americans that means if you bet on the Vikings you bet $100 to win $210 but if you bet on the Eagles you bet $255 to win $100.
This isnt true for nearly all of the sim prop firms. They arent taking the other side of your trade, they use a independent platform to handle the trades and filling. Also most people will only ever be in a sim / sandbox so there is no other side to take, there is no counter party to a simulation trade, it just doesnt exist.
Now they can inverse your trade, say if you go long in the sim, they might decide to inverse copy trade that and go short, which if it was a big enough trade might make the market go against your idea and lose your sandbox trade money as the real market goes opposite
It doesn't have to be inherently evil if funds aren't immediately available, it could just a bad deal.
I get the feeling that a lot of people on the forum think its illegal that these places dont allow you immediate access to winnings. But its perfectly legal since you signed the contract and terms of service. Its just a bad offer that you have wait or meet minimum trading days before you can access those profits.
Also don't forget its not really your money, its profits in an account that the company allowed you to open under their terms. If you don't like their terms then don't use the service.
You might like to see my excel sheet I have on Apex winner analysis (I don't have the losers, only published payouts). The overwhelming majority only make it to one payout and then aren't seen again (assuming either they got paid and stopped or blew up)
I'm with sevensa on this one, and I'm not sure why you're defaulting to Apex being a bad actor.
You're also assuming they make 100% of their money from new subscriptions or reset fees. What about if they copy trade? What if they sell that data to a third party? What if they received outside funding? With how much money they have paid out (~$3.5M a month) they either have an insane user base paying subscription and reset fees, or more realistically they are doing something else to generate additional cashflow for the business.
Sim-based firms inherently seem shady (you are making real trades yet you can make real money), but that doesn't make the money people receive fake