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Could I ask what is the purpose of the trailing drawdown as this is a not real-world?
Also, why are the drawdowns so tight? $2500 on a $50.000 account. This means that if you used the standard 1-2 percent risk management loss/trade, this would only be 2-4 ticks on the emini S&P. How can you make this work?
Can you help answer these questions from other members on NexusFi?
Well, it should be clear that with a $50k account you are basically trading a $2,5k account, regardless of whether it's named $50k or $1000k or whatever you like.
It always boils down to the size / limitation of the max. drawdown, so if you want to trade ONE REAL $50k account, you need to get yourself 10 $150k accounts with a max. drawdown of $5k each and trade them simultaneously with an appropriate distribution of risk parameters and contract size.
Hope this helps...
"If you don't design your own life plan, chances are you'll fall into someone else's plan. And guess what they have planned for you? Not much." - Jim Rohn
Thank you for your reply.
However, by increasing the number of accounts, does not increase the drawdown amount. Increasing the account size does, but this brings with it a higher profit goal and monthly fee. If you did as you mentioned, your monthly cost on 10 $150,000 accounts would be $2,970.
Another interesting think I noticed was, if you look closely the drawdowns do not increase proportionately.
For instance the drawdown for a $50,000 account is $2,500 and the drawdown for a $100,000 account is only $3,000.
I think that, without getting too far into the details of a particular company's offering, the point with all these funding companies is that the "$50,000" or "$150,000" accounts are just sim accounts with pretend "balances." To compare them to trading with a real account, they do not give you $50,000, for example, of margin. They give you the "margin" that you can lose before you have blown up the account, which differs between them, but which is going to be just a few thousand sim dollars, nothing like the advertised face value.
This is a marketing decision, and it should be understood as such, and the "50k" or "150k" number should be dismissed by the trader taking the trial. Just look to see what is the amount you can lose, and be guided accordingly. They also all have some kinds of rules like the trailing drawdown rules, which are loss-control rules. A trader in a live account should have something of the sort as well if they trade on their own. Not having something to limit loss and tell the trader to shut it down is probably one reason that very few traders actually are profitable in real trading.
And to address @alberteinstein7's point that "This means that if you used the standard 1-2 percent risk management loss/trade, this would only be 2-4 ticks on the emini S&P...." Well, there are many different recommendations about how much of your total capital to risk, so 1-2 % may not be exactly a "standard," but if all you have is $2,500 in a real account, then yes, 2% is $50, which is 4 ES ticks (1 point) per contract.
I would say that a trader attempting this test will need to be very clear about the amount of loss they can take, given the size of their "capital", and it likely will need to be well over 2%. Let's say you think that you can withstand a loss of 4 or 5 points for a stop loss, that's $250/contract, a small amount for a stop, actually, but it's 10% of the $2,500.
A person is going to have to think carefully about this risk equation.
This is not meant as a comment one way or another on Apex or its rules. I don't even quite know what they are, actually. But I felt I should add something when the nominal face values of "50,000" and "150,000" are tossed around as if they are real numbers. Look at what you actually have at risk and consider, based on your familiarity with your own trading, whether you think you can succeed with the actual numbers you will be trading with.
Bob.
When one door closes, another opens.
-- Cervantes, Don Quixote
But I felt I should add something when the nominal face values of "50,000" and "150,000" are tossed around as if they are real numbers. Look at what you actually have at risk and consider, based on your familiarity with your own trading, whether you think you can succeed with the actual numbers you will be trading with.