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Trading: CME Futures & US Treasury Bonds Futures (week) and Bitcoin (week-end)
Posts: 90 since Feb 2021
Thanks Given: 95
Thanks Received: 67
Are funded accounts orders really submitted to the exchanges and make it into the orderbook?
A prop firm funding talent recently went down, and they didn't even submit funded account orders to the exchanges, it was all simulated in their virtual book.
Can you help answer these questions from other members on NexusFi?
All the main firms are clear about whether the traders are on sim accounts, how long they stay on sim for and if the company moves will them on to real funded accounts; or whether they start on real funded accounts straight away once passing the program.
There is lots of discussion in each of the company threads, and in this thread, and the details are in each of the Company's FAQs.
When the trader is offered a choice of account type, whether sim or real then I know Topstep for instance (as I have experience with them), provide comprehensive details on the Sim accounts: Pro Account, Express Account which then transfer int to a real Premium Funded Account once the maximum balance is reached; or the original Funded Account.
Nobody is going to end up trading a sim account unknowingly, firstly as said before in these threads, the trader gets paid so what's the problem anyway, but because it is very easy to tell if one is on a sim account and check whether orders are being submitted so no company is going to be caught out with such an obvious reputation damaging lie trying to pass off a real account as sim.
You do not win as a trader, you just get to play again the next day. If that game doesn’t appeal to you then you should not trade. Gary Norden
It is best to be specific about these things. "A prop firm" could be anything.
I think it is natural enough to be skeptical about anything in trading, but not every firm is necessarily the same, and not everything is necessarily fake. If the question is whether "funded accounts" are only using simulated orders, what firm is being talked about, and what is the reason for the question?
As @matthew28 just mentioned, it is easy to tell: enter a limit order far from the current market and see if it appears on the DOM. If so, that one really made it to the exchange. Simple. This experiment has been done and referenced a few times now, and in the case of that firm (it was Topstep), the order showed up on the DOM, so it was real and not sim.
However, many firms now have complicated arrangements they offer, including sim accounts they will pay out on, so which firm and which variation a person is talking about may matter.
Being specific, and as factual as possible, is a good idea. And not every firm is necessarily the same as any other.
Bob.
When one door closes, another opens.
-- Cervantes, Don Quixote
Trading: CME Futures & US Treasury Bonds Futures (week) and Bitcoin (week-end)
Posts: 90 since Feb 2021
Thanks Given: 95
Thanks Received: 67
Meant futures trading funding companies like the ones discussed here, LeeLoo, Apex Trader Funding, TickTickTrader, etc...
Placing a limit order in the orderbook was exactly the test I had in mind, I don't have an account in any of those companies so that's the information I was looking for from anyone who is funded by one of them.
Trading: CME Futures & US Treasury Bonds Futures (week) and Bitcoin (week-end)
Posts: 90 since Feb 2021
Thanks Given: 95
Thanks Received: 67
This is a follow-up on my last post as I passed the evaluation and got funded with Leeloo, and as expected it's still a simulation environment the orders don't show up in the orderbook.
How long did it take them to set up the account after you passed the evaluation?
A real account will probably take 7-10 days.
How much did LeeLoo charge you in CME professional data fees each month?
The CME collects professional data fees from a trader funded by somebody else's money, ie a funding company such as the ones listed in this thread title. Topstep for instance quote $116/exchange for somebody using Ninja and Rithmic which is what LeeLoo uses I believe.
How many exchanges do you have access to with the account they gave you?
All four CME exchanges would cost $464/month for CME, CBOT, NYMEX and COMEX products. LeeLoo isn't going to pay that itself if you aren't.
Lots of these companies that followed the initial company in to the market claimed that they didn't charge CME professional data fees in their funded accounts, presumably that is because they are actually sim accounts.
You do not win as a trader, you just get to play again the next day. If that game doesn’t appeal to you then you should not trade. Gary Norden
To be fair to Leeloo, the wording on their website does say "simulation" (even where describing the so-called "funded" accounts).
They don't actually claim anywhere (that I can find) that it's a live account with a broker. In other words, I think they're not actually a "funding" company at all, (which they do claim to be).
In contrast, FTMO - for example - operate what appears to me to be a very similar process, but they're very open and honest about it and don't actually claim to be "funding" anyone.
That's clearly what it boils down to, much of the time.
But in some cases, a simulator from which people can earn profits and get paid out in real money.
I see this business model is being very similar to that of the (few well regulated) spot forex "brokers" whose customers are effectively trading on a simulator, in that they're dealing in the firms' "own products" rather than in any real market, but the forex firms (at least, the properly regulated ones) offset their own net liabilities in a real market, so that they can always pay out the winners, and don't care - within reason - which customers win and lose, knowing that (to put it mildly) there are always far more losers than winners in the long run.
Some of these "pseudo-prop-firms", for want of a better label, are clearly doing something very closely related.
Some of them even say so, openly (again, I'm thinking of FTMO), while covering their bets and making most of their profits on the fees of those failing the various challenges (about which, again, some are open and honest).
People pay to take a test for an opportunity to receive a funded account.
If one passed the test and chose a company that offered either a real funded account route or the quicker to set up and pro data fee free sim account option, and then chose the latter, they receive real money for their sim profits.
I have never had a trading platform simulator pay out real money if I get a high score, but maybe you have...
You do not win as a trader, you just get to play again the next day. If that game doesn’t appeal to you then you should not trade. Gary Norden