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I just got this from a friend of mine who passed his evaluation this week with one of the funding companies.
The "forfeit" language gives ample proof that funding companies value a trader significantly more when they are in the combine stage.
But to make your head spin even more, he said they also have a cap on payouts equal to the account size you sign up for. So if you sign up for a "$150k" account, you are capped at lifetime payouts of $150k.
Do they make most of their profits from "partnering" with live traders?
You tell me.
Incredible.
I recognize that the funders may have a few Grand Master Traders that trade for them with huge accounts, but if that is working out so well for them, why not groom even more of them? Wouldn't you want a huge army of them trading for you? Why use words like "forfeit" and "capped"?
For all Traders: From Beginners to Blowout Recoverees
As mentioned in the last post, I am guessing that the funders make much more money on their combines than they do from partnering with traders for the long term. Most combines fail, and most funded live accounts fail. But this doesn't mean that a few amazing traders don't survive and thrive.
But the odds are stacked against the the less-disciplined newbie trader who needs more TIME in front of the screen with some good setups and iron-clad discipline. The average combine inductee pays over $7,000 and never earns a dime in real profits.
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Therefore....
As I have been saying for 6 weeks now, Micros are the way to go. Follow the plan below, and you will never feel the need to play with the funding companies and get stuck in their hamster wheels. Instead, you can keep 100% of your funds and move forward to consistent gradual profits (and even become a Grand Master Trader if you want, or even a Trading God!).
Stage 1. Paper Trading
1) Sim Trade. Use one MES or one MYM micro contract. Be disciplined. I know it's hard, but pretend the Simbucks are real. Honor your position sizing, targets and stops.
2) Profit Target. Stop when you get profits of 2% for the day (not the 9% the evals errantly require).
3) Per Trade loss. Limit your per-trade loss to 2% of your sim account
4) Max Daily loss. Stop for the day if you reach a loss of 10% for the day.
In two weeks (10 trading days), you should have added 10% to 20% to your sim account. Only when you can paper trade for two weeks and honestly add 10% to your account are you permitted to advance to the next stage... Again, you must be able to honestly trade for 10 days and follow the rules above before you trade live, no matter how small.
Stage 2. One Micro
1) Live Trading. Put $500 max in a live account with AMP or some other discount brokerage. Trade with one micro. I recommend the MES (S&P) or the MYM (DJI) as they are less volatile than the MNQ (Nasdaq) or the M2K (Russell). Do your best to have great entries.
2) Profit Target. Try to earn 2% on your account each day. This is just $10 (2% of $500). When you reach this 2% mark, then STOP for the day. You are developing discipline.
3) Per-trade Loss. Limit your per-trade loss to 2% of the account ($500 x 2% = $10). $10 is 8 ticks on the MES and 20 ticks on the MYM. You are developing a patternof getting out quickly if a trade is going against you.
4) Max Daily Loss. Limit your daily loss to 10% of your account ($50). How long can you last if you hit your max loss each day on a $500 account? 10 days.
Earn an average of 2% per day for 10 full days without breaking the 2% loss per trade rule or the 10% max loss per day rule. Add $100 to that $500 account and take it to $600 in two weeks. Congratulations, you just made 20%+ in two weeks. You just performed better than most hedge funds do in a full year. Only when you can make an average of 2% per day with one micro for 10 trading days without dropping below the 10% daily loss can you go to the next step.
1) Live Trading with two or more micro contracts. If you have more funds to add to your account, do so now, up to $10k max, OR just continue to trade with the $600 you now have. Start again with one micro, but you are finally permitted to trade with more than one micro as you EARN the right to trade bigger through good trading.
2) Profit Target. Set a profit goal of 1% or 2% of your balance per day. Later on, the % goals will be less relevant because you will take what the market gives each day, but for now, you are developing discipline. STOP when the target is reached.
3) Per Trade Loss. Your per-trade max loss is still 2% of your full account. Especially as the account grows, be sure to take your 2% MAX stop loss per trade. This will be the absolute hardest part of trading for you. If you can master this, then you will go far.
4) Max Daily loss. Your daily max loss is still 5% to 10% of your account or $50, whichever is bigger. Be sure to stop trading when you reach a daily loss of 5% to 10% (you decide). Once you are at minus 5% or minus 10% on the day, your emotions may kick in and you may decide you just have to recover all the losses for the day. Fight the urge. Close it down. Come back tomorrow with fresh eyes. You can do it.
5) Scale up! Add a micro for each $500 you earn. Once your account gets to $1000, you are permitted to trade with 2 micros. At $1500 profit, you can trade with 3 micros, etc. (Likewise, if you are struggling for a bit, scale back down.)
Things are starting to get exciting now.
Stage 4. Let the Good Times Roll.
1) Continue trading live and scaling, but reduce risk. Once you get to $5k in your account, increase the margin per micro to $1000, and trade with a max of 5 micros per trade. Now double the margin (less risk). Add one micro for each extra $1000 gained.
2) Profit Target. Try to get to 1% to 2% per day average.
3) Per Trade Loss. Strictly honor the 2% max loss per trade.
4) Max Daily Loss. Keep your max DD per day at 10%, or even dial it down to 5%.
5) Scale up! Continue trading, but once you get to $10k in your account, increase the margin per micro to $2000, and trade with a max of 5 micros per trade. For each $2000 added, increase by one micro. You are reducing your risk again as well.
6) Scale up again! Continue trading to $20k. You can now trade 10 micros or one E-mini.
Congratulations! You have graduated! You determine your next steps, but I recommend a max of one Emini per $10k in your account. Continue to build your account with the DISCIPLINE it took you to get here.
Reflect on these numbers:
Starting with $1000:
At an average of 1% per day, $1000 becomes $11k in one year and $117k in two years.
At an average of 2% per day, $1000 becomes $116 in one year and $13 million in two years.
Starting with $7000: (The amount you would probably have spent on a combine)
At an average of 1% per day, $7000 becomes $76k in one year and $830k in two years
At an average of 2% per day, $7000 becomes $811k in one year and $94 million in two years.
I already introduced the acorn to oak tree analogy. But here it is again.
As beautiful as the sunflower may be, your purpose is not to grow a magic sunflower that shoots to the sky in just a few weeks and then dies at the end of the season:
Your purpose is to carefully, deliberately, safely, and optimistically grow a tiny acorn-sized account into a gorgeous oak tree-sized account.
You start with a tiny acorn ($500?):
And then with proper contract sizing and steel-trap discipline, you grow it into this:
What do you think? $200k? $500k? Maybe $1M? Awesome any way you look at it.
It is sim trading and then the micros that will let you get started down the path quite nicely.
Pretty sure it is Leeloo. Honestly all the firms operate the same, they prefer failing traders to succesful ones. As long as they pay, I don't care. I am trading with Leeloo, because they had the best Ruleset for me. After having failed with oneup, earn2Trade and so on.
Like oneup had the rule on funded accounts to be positive every 15 Trading days (for the first 90days I believe). Which at the beginning I thought wasn't that difficult, but after a bad day the pressure always got me.
I kinda like trading funded, because if I traded everything on my own Account I would have lost far more money. Had a thread about that, where I was close to giving up.
yeah, i know for a fact it's not Topstep, Earn2trade, or Oneuptrader due to having been funded by all of them (unless they've changed recently). seems likely it's Leeloo.
it's true that all these firms prefer failing traders to successful ones like you mentioned, but there are key differences between firms that make one better than the other in important metrics.
Leeloo is way too shady for my liking. Oneuptrader only slightly less. i would not trust my time and money with them, especially Leeloo.
TST has the most transparency and you're least likely to get scammed there but they have the most stringent rules + a two step combine. TST's biggest benefit is their trailing DD doesn't trail based on unrealized PnL but their weekly loss limit is total BS, literally designed to make people fail or take longer to complete their combines so they'll have to pay for an extra monthly subscription.
E2T used to be an okay option although they still have a trailing DD which is based on unrealized PnL (total scam imo). But ever since the CFTC allegations against their founder came out, they've been engaging in a bunch of shady actions like pretending they managed to get funding from a new prop firm called Appius (different from their previous prop firm Helios, which was affiliated and created by the guy who was the target of the CFTC allegations) when behind the scenes, it was actually one of the E2T guys that had created the firm. LOL
E2T of today just reeks of too much shadiness unfortunately, which leaves TST as the last remaining firm with some semblance of legitimacy.
There are also 2 other firms I have no experience with. LMI and Uprofit.
I only gave Leeloo a try, after the forum thread on futures.io and because I didn't want oneup anymore. The 15day profit rule is the worst.
Leeloos Account on Social media was just weird, like ranching cowboys and weird youtube videos. Looked like a scam, but on the forum here someone posted a video about one guy getting paid.
Gave it a shot and so far everything seems legit, had only 3 payouts so far, but fast and no problems. Honestly just want to get some money out of funded trading, get more experience and then trade my own Account.
Haha, I think you may have missed the point of my last few posts:
ALL THE FUNDERS SUCK and are totally unnecessary.
Traders don't need them. The "Free Money" greed gland must be throttled and the big picture visualized.
All of us are like little kids gleefully playing in the mud in our back yards and are screaming at dad to leave us alone while he is trying to get us into the car to go to the beach - a place we have never been before. He says it will blow the mud away, but we only see with our present eyes.
Or perhaps this is a better analogy:
Except for only the very best of the best traders, funded accounts are a trap.
"But I don't have enough money for my own account."
If you put all your combine and reset fees into a micro account you would. The average trader (based on my own surveys) spends $7000 on combine fees.
"Building my own account is too slow."
Yes, it may be slower than you want, but you are in this for the long haul. And I have shown that growing a small $1000 account at just 2% per day gives you $120,000 in one year. The funders want you to earn 4% to 9% PER DAY to qualify, and toss in lots of rules to get you to fail.
Just go with my Ultimate Trading Plan which I laid out in my previous post in painstaking detail. Take your "hard earned money" and keep ALL of it for yourself and build your OWN account slowly and carefully.
The daily trend is still UP. That is the big bias.
But the daily 20 ema is flattening. Things are starting to get interesting.
I think this is a swing trader's nightmare as we appear to be in a topping pattern, but inflation fears are still high, and the market may yet get to 4500 ES before we get a healthy 10% correction.
But I am not a swing trader and don't care for one moment whether the market is going up or down except for the next few hours.
The big bias is up, but it may be a 100% down day. I must be on my toes.
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Two MYM scalps. The first was good. I got a 6 tick win.
(2 tick Renko bars with VWAP bands at +/-1 and +/-2 std dev)
How could a loss be a good trade? Because of what happened next. The market dropped 40 YM points. So it might have become a 40 tick loss if I had held. It was a good because I honored my rules. I got out of a loser quickly.
Stop #1 is my discretionary "get out immediately if a trade is going against me" stop.
Stop#2 is my hard emergency stop is at $10 (20 ticks on the MYM.)
Once we break the -1SD (blue band) I know that the tendency is for the market to drop to the -2SD band (purple). I took a long because of the overall bullish environment. It was an incorrect trade, and I got out fast.
The MYM has enough volume that I am able to watch the OBV.
I just took three trades, and the OBV was my guide.
Notice on the first that the OBV was below the price, indicating that the underlying pressure was to the downside. Being below the -1SD I felt it was a "safe" short. But I was WRONG. I lost -12 ticks (-$6) on the MYM.
The OBV often moves in advance of the actual moves, so that was on my mind when I took trades #2 and #3. I believed there was more "down" to come. And the trades were good, being 5 ticks and 10 ticks.:
Also, I love to fade down moves and up moves if there is a reason to believe we are hitting some Resistance or Support. So what was the Resistance? For that I looked to the highest volume chart, the ES. And this is what I saw at the same time:
(7 tick range bar ES chart, with On Balance Volume overlay.)
I was looking at the MYM while referencing the action on the ES at point A. Notice that we had Resistance in the yellow circle. I thought that would indicate there were still some sellers there. Notice also the OBV was below price on the ES as well on the bar before A. This is good for shorts.
I followed my rules, so my only regret is that I didn't hold longer on trades 2 and 3. Price on the MYM is now 34,192.
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Update. 2:45 ET. The low on MYM just hit 34,075 (4134 ES) Unfortunately, I missed the whole move down being away from my computer. But the OBV did give some advanced warning for that move.
