Sir, you’re absolutely right. And I think that the fortitude that one has to have in trading, necessitates also not listening to people…like myself.


The greatest asset one can have in this game, is learning to think for oneself. (And that includes not listening to people like me on the forum, if it’s not aligned with one’s objective) And that’s hard. It’s and it’s difficult because it’s not necessary, our species relies on the community and the system to move from point A to point B. Individuals who stand alone get eaten by lions in the wild, so how can one become an individual that survives in the trading environment where everything is poised to exploit, you can only survive through the experience of being bitten, many times and losing many times, and learning to think for yourself, I’m only stressing that the simulated jungle is… but it doesn’t mean that I’m right, and I’m just on my soapbox.


Because in this game we’re going to encounter all kinds of views, but really success and trading is about seeing things for yourself and taking the steps to develop the confidence to execute on those steps. So, it requires using your own cognition machine and not being dependent on the various things out there (including my views).


And you’re absolutely right, there is more than one way to peel an orange.

josh 

I respect your opinion and once held the same conviction you did. What you may be missing is that everyone is not like you, and we are all on independent paths. While many will have a very similar experience to yours, many others will not. You state with such certainty that a local simulator provides a superior experience to a paid funded simulator. However, maybe you missed the fact that some people will benefit from imposed rules, even if you don't care for the particular rules. A local simulator can be reset with zero penalty, and imposes no rules. A paid funded simulator forces rules, and requires a small but not insignificant level of financial commitment in order to (effectively) reset the account. You shrug this off as if it's nothing, but for some traders it may in fact be everything. You also state with certainty that the "arbitrary rules and structure" will "ensure your failure." Well, it certainly doesn't ensure *everyone's* failure. It may not be for all traders, for sure. But, these rules may in fact be just what some people need. The point is, you don't know their struggles or problems, and are projecting your own circumstances onto them. You said that if people don't understand you, that those people are "not at that point yet where you are approaching consistency". Your certainty that everyone who disagrees with you 'just isn't there yet' may say more about where you are in your own journey than about what you think it says about where they are in theirs. Just something to think about.

I had briefly considered a 'Funded Trader Platform as a way to test out new ideas or tweaks to my plan with someone else's money while putting some of my own skin in the game. Unfortunately, this idea could not come to fruition. My style of trading & ruleset is incompatible with their rules. Plus, the trailing stop/drawdown is a curse I'd wish unto only my worst enemy.

ThemBones 

Plus, the trailing stop/drawdown is a curse I'd wish unto only my worst enemy.

Maybe this is a good opportunity to discuss that rule, which most people despise.

Let's look at Apex's trailing drawdown rule. Basically, it is calculated this way: the high water mark of your account, determined using open P/L (not closed P/L), less the max drawdown for the account size.

For the following example, I'll refer to the $50K account as a $2500 account, because that's what it is. You can only lose $2500, so that is your account size. The use of "$50K" is arbitrary and means nothing at all.

So for a $2500 account, your max drawdown is simply the account size: $2500. So the value at which your account will be disabled is $0 (which means that you have lost $2500).
You buy 1 MES contract and it goes 20 points in your favor. You have $100 in open profit and your open, realtime account value is $2600. You put a stop at breakeven and it comes back to stop you out.
Because your account high water mark was $2600, subtracting $2500 from that, we arrive at a trailing drawdown threshold of $100, whereas before it was $0. So, if your account value reaches $100 (you lose $2400 from here), then your account will be disabled.

Now, you do the same thing again. You buy 1 MES, it goes 20 points up for a $100 open profit, and comes all the way back again and stops you out. Nothing has changed, because your account value was $2500, reached an open realtime value of $2600, and now is still $2500. You can repeat this as often as you want, and it doesn't change.

What this rule highlights is the importance of profit taking. One case which people complain about is when they have this $2500 account, take on a lot of risk, it goes their favor, and then comes back on them for a breakeven or small winner. For example, they buy 3 ES contracts, it goes 10 points higher and they have an open profit of $1500, and it comes back and stops them out. Now their trailing drawdown stop-out amount is $1500 (high water mark of $4000 open value - $2500). So, they now have an account value of $2500 and a tailing stop-out value of $1500, and if they lose $1000 from here, their account is liquidated.

Personally, I don't see the problem. They were up 60% (!!) on their account. The only possible way to do this on a single trade is overleveraging. What if they had only been long 3 MES? Well, they'd only have a trailing drawdown stop-out value of $150. Leverage cuts both ways. When they were up 60%, the other side of leverage came to bite them. When your value goes from $2500 to $4000, open profit or not, it's *yours*. Not taking any profit there is the same thing as choosing to buy at that level and put in a 10 point stop.

The argument seems to be that "it's not money lost, it's money I've earned." Well, it wouldn't be a problem at all if proper leverage were used, would it? Leverage is the problem, not the rule. If you increase your account value that much on such a small account and don't take any profit, well, that's just poor risk management. Of course, there are times to be willing to let a trade run and come all the way back. But if the amount it runs is a huge percentage of your account value, you have taken on too much risk!. It's only a problem when the size is too large for the account.

That's my view anyway, love to hear your thoughts. Sorry for the long post.

josh 

Maybe this is a good opportunity to discuss that rule, which most people despise. Let's look at Apex's trailing drawdown rule. Basically, it is calculated this way: the high water mark of your account, determined using open P/L (not closed P/L), less the max drawdown for the account size. For the following example, I'll refer to the $50K account as a $2500 account, because that's what it is. You can only lose $2500, so that is your account size. The use of "$50K" is arbitrary and means nothing at all. So for a $2500 account, your max drawdown is simply the account size: $2500. So the value at which your account will be disabled is $0 (which means that you have lost $2500). You buy 1 MES contract and it goes 20 points in your favor. You have $100 in open profit and your open, realtime account value is $2600. You put a stop at breakeven and it comes back to stop you out. Because your account high water mark was $2600, subtracting $2500 from that, we arrive at a trailing drawdown threshold of $100, whereas before it was $0. So, if your account value reaches $100 (you lose $2400 from here), then your account will be disabled. Now, you do the same thing again. You buy 1 MES, it goes 20 points up for a $100 open profit, and comes all the way back again and stops you out. Nothing has changed, because your account value was $2500, reached an open realtime value of $2600, and now is still $2500. You can repeat this as often as you want, and it doesn't change. What this rule highlights is the importance of profit taking. One case which people complain about is when they have this $2500 account, take on a lot of risk, it goes their favor, and then comes back on them for a breakeven or small winner. For example, they buy 3 ES contracts, it goes 10 points higher and they have an open profit of $1500, and it comes back and stops them out. Now their trailing drawdown stop-out amount is $1500 (high water mark of $4000 open value - $2500). So, they now have an account value of $2500 and a tailing stop-out value of $1500, and if they lose $1000 from here, their account is liquidated. Personally, I don't see the problem. They were up 60% (!!) on their account. The only possible way to do this on a single trade is overleveraging. What if they had only been long 3 MES? Well, they'd only have a trailing drawdown stop-out value of $150. Leverage cuts both ways. When they were up 60%, the other side of leverage came to bite them. When your value goes from $2500 to $4000, open profit or not, it's *yours*. Not taking any profit there is the same thing as choosing to buy at that level and put in a 10 point stop. The argument seems to be that "it's not money lost, it's money I've earned." Well, it wouldn't be a problem at all if proper leverage were used, would it? Leverage is the problem, not the rule. If you increase your account value that much on such a small account and don't take any profit, well, that's just poor risk management. Of course, there are times to be willing to let a trade run and come all the way back. But if the amount it runs is a huge percentage of your account value, you have taken on too much risk!. It's only a problem when the size is too large for the account. That's my view anyway, love to hear your thoughts. Sorry for the long post.

This is a great response, but I think the example is unrealistic. If you're a new trader and you can hang on to MES for 20 points, what are you doing trading with a Funded Trader? Get your own account - you are ready to trade!

Next, I think the trailing stop encourages more of YOLO profit taking and/or fear of leaving money on the table/market's going to take my money away profit taking. If it didn't, we'd see more success, I imagine (with the assumption these funded traders have an edge with which they can effectively exploit).

Finally, it's incompatible with scaling in, which I do religiously, heh. I am 1000% fine with letting my trades come all the way back to zero or even not working; it's part of accepting the risk of each trade. As 'Milli Vanilli' put it - "All or nothing... It's got to be."

Again, great post!

ThemBones 

This is a great response, but I think the example is unrealistic. If you're a new trader and you can hang on to MES for 20 points, what are you doing trading with a Funded Trader? Get your own account - you are ready to trade! Next, I think the trailing stop encourages more of YOLO profit taking and/or fear of leaving money on the table/market's going to take my money away profit taking. If it didn't, we'd see more success, I imagine (with the assumption these funded traders have an edge with which they can effectively exploit). Finally, it's incompatible with scaling in, which I do religiously, heh. I am 1000% fine with letting my trades coming all the way back to zero or even not working; it's part of accepting the risk of each trade. As 'Milli Vanilli' put it - "All or nothing... It's got to be." Again, great post!

Well, some people can easily hang on for 20 points profit, but they might also be willing to hang onto a 40 point loser. Not sure that this alone qualifies one as "ready to trade"!

For your other two points, especially the one about coming back to your entry and scaling in -- I don't think the restriction prohibits that at all, as long as the size is appropriate. Let's say it goes in your favor, it comes back and you add as it goes a little against you, it goes up again, and you add again as it comes back down. Well, this should be perfectly fine if it's as I described above -- appropriate size. Even if it goes in your favor 10% or so ($250 on a $2500 account, as in my example), it's not the end of the world if it comes back on you. But if it's going in your favor 20, 30, 40%, and you're still letting it come back and adding, well, then IMO, you're oversized for the account. That's my whole point.

Imagine a live account of $750K being up 20% and letting it come all the way back to breakeven, on a single trade. Just doesn't compute does it? All of these hangups are, IMO, based on improper sizing and a desire to pass an evaluation or make money quickly. It's not the right focus, and it's not forced upon the client/trader. One can choose to act differently. It's the greed and impatience which moves a trader to have these problems. Which is why I think a program like this can be very valuable to any trader.

I appreciate your reply and discussion.

This is very interesting Argument you have there.

How about an example of an individual who is has not money to trade his own account because of the Mortgage, Family - Kids with 5 Activities a week. Single working parent.

All that newbee can afford is 30 dol per months to pay Apex for the data and Prop shops rules that enforcing him to do the right thing.

If he/she blows an account it is highly likely because he reached max DD. 99% failure is because of that. Even account is blown, he still have data to look at the market and trade his SIM account until the next month reset.

Don't get me wrong, I totally respect the people who has enough money to trade their own account.

I understand where you coming from I know a successful trader who couldn't work the Prop shop company because he couldn't adjust his style of trading. So he just left and putted full stop to it.

But we are talking about newbees here right. It is like a puppy, whom you can train to follow the rules right from the begging. Isn't it hard to teach an old dog new tricks ?
This is may be an ideal way to go for the newbee they stick to this rules and polish them until they succeed and perhaps may be later on they will have enough money to go to trade their own account.

Wouldn't it be good stepping Stone ?

The point I am trying to make if it is not for you then you don't need to be involved with prop shop.

@josh made good points in his posts.

ThemBones 

This is a great response, but I think the example is unrealistic. If you're a new trader and you can hang on to MES for 20 points, what are you doing trading with a Funded Trader? Get your own account - you are ready to trade! Next, I think the trailing stop encourages more of YOLO profit taking and/or fear of leaving money on the table/market's going to take my money away profit taking. If it didn't, we'd see more success, I imagine (with the assumption these funded traders have an edge with which they can effectively exploit). Finally, it's incompatible with scaling in, which I do religiously, heh. I am 1000% fine with letting my trades coming back to zero or even not working, it's part of accepting the risk of each trade. Again, great post!

This is the point that is too obvious.

If you are able to hang on for 10 points for 20 points, you’re not a person who should be using funded trader programs, and if you were, they would kick you out. Now on the other side, the 99.9% of people who join from the funded trader programs, are not at a level emotionally, psychologically, knowledgeably, experientially where they can hang on for 10 or 20 points, not the way any of the future markets move.

And if that does by chance happens, it’s by LUCK…GAMBLING, a process hasn’t been developed that would lead to consistency and success, instead they’ll be liquidated by the next day.

Is it not obvious?

ThemBones 

This is a great response, but I think the example is unrealistic. If you're a new trader and you can hang on to MES for 20 points, what are you doing trading with a Funded Trader? Get your own account - you are ready to trade! Next, I think the trailing stop encourages more of YOLO profit taking and/or fear of leaving money on the table/market's going to take my money away profit taking. If it didn't, we'd see more success, I imagine (with the assumption these funded traders have an edge with which they can effectively exploit). Finally, it's incompatible with scaling in, which I do religiously, heh. I am 1000% fine with letting my trades come all the way back to zero or even not working; it's part of accepting the risk of each trade. As 'Milli Vanilli' put it - "All or nothing... It's got to be." Again, great post!

josh 

Well, some people can easily hang on for 20 points profit, but they might also be willing to hang onto a 40 point loser. Not sure that this alone qualifies one as "ready to trade"! For your other two points, especially the one about coming back to your entry and scaling in -- I don't think the restriction prohibits that at all, as long as the size is appropriate. Let's say it goes in your favor, it comes back and you add as it goes a little against you, it goes up again, and you add again as it comes back down. Well, this should be perfectly fine if it's as I described above -- appropriate size. Even if it goes in your favor 10% or so ($250 on a $2500 account, as in my example), it's not the end of the world if it comes back on you. But if it's going in your favor 20, 30, 40%, and you're still letting it come back and adding, well, then IMO, you're oversized for the account. That's my whole point. Imagine a live account of $750K being up 20% and letting it come all the way back to breakeven, on a single trade. Just doesn't compute does it? All of these hangups are, IMO, based on improper sizing and a desire to pass an evaluation or make money quickly. It's not the right focus, and it's not forced upon the client/trader. One can choose to act differently. It's the greed and impatience which moves a trader to have these problems. Which is why I think a program like this can be very valuable to any trader. I appreciate your reply and discussion.

Who are these new traders letting their accounts appreciate 20%, let alone in a funded program? Or the 60% you mentioned earlier and then getting destroyed? These aren't traders, these are gamblers. You can do the same thing with a real account. These new traders don't have any money, so they shouldn't be trading. They'll get the same experience with a real account without the restrictions.

I think we're probably on the same page but talking past each other. Plus, I think less of these programs than you do from what I can ascertain.

However, I certainly agree with your thoughts on impatience, greed, and improper sizing, and all the other problems documented on this site with which traders' blowup their accounts... which I have never done I'm thankful to say.

This individual should not be trading unless they’ve sufficiently taken care of their family, and have savings put aside for their family, and the time spent will not be a detriment to the kids growth and the family’s cohesiveness.
(And by this, I mean, you have a 529 college savings plans for each of your kids, you’ve already paid your life insurance… The stress could cause a heart attack)


It would be a devastating life mistake for an individual who has mortgage, family, kids with five activities a week, to embark on trading when they could use that extra $30 a month, or $100 a month or $300 a month to spend on the family and, create memories with children if 80 to 90% of people fail at this, what’s the likelihood that an individual that has no time to spend in front of the screen for hours on and for years, is going to succeed, just be throwing money away, which would only lead to depression.

For anyone reading this, if you are in that bracket, please, please, please don’t embark on trading, for your own sake.

Spend that time and money with your family, create memories with them, but don’t spend the time on gambling, don’t take that time away from your family.

…Unless you want to. ☠️

tr8d3r 

This is very interesting Argument you have there. How about an example of an individual who is has not money to trade his own account because of the Mortgage, Family - Kids with 5 Activities a week. Single working parent. All that newbee can afford is 30 dol per months to pay Apex for the data and Prop shops rules that enforcing him to do the right thing. If he/she blows an account it is highly likely because he reached max DD. 99% failure is because of that. Even account is blown, he still have data to look at the market and trade his SIM account until the next month reset.

With all do respect I don't see any constructive points in the response.

All I see below is "There is no other way but my way".

I wish Chris Gardner read the post below. I wonder what would be his response.

If you don't know who is Chris Gardner the here is the link for you to read https://en.wikipedia.org/wiki/The_Pursuit_of_Happyness

Darvish 

This individual should not be trading unless they’ve sufficiently taken care of their family, and have savings put aside for their family, and the time spent will not be a detriment to the kids growth and the family’s cohesiveness. (And by this, I mean, you have a 529 college savings plans for each of your kids, you’ve already paid your life insurance… The stress could cause a heart attack) It would be a devastating life mistake for an individual who has mortgage, family, kids with five activities a week, to embark on trading when they could use that extra $30 a month, or $100 a month or $300 a month to spend on the family and, create memories with children if 80 to 90% of people fail at this, what’s the likelihood that an individual that has no time to spend in front of the screen for hours on and for years, is going to succeed, just be throwing money away, which would only lead to depression. For anyone reading this, if you are in that bracket, please, please, please don’t embark on trading, for your own sake. Spend that time and money with your family, create memories with them, but don’t spend the time on gambling, don’t take that time away from your family. …Unless you want to. ☠️