Are Prop Firm Challenges a Waste of Money?

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[TraderNick]

Stock/Futures/FX Brokers + Perks for US Traders!
CFD/Forex Brokers + Perks for NON-US Traders!

[Quantum-]

I must say that there is one HUGE advantage to experience prop firm trading: it really enhances your discipline. It forces you to be conservative and stick to the rules, otherwise kiss your 500 bucks goodbye! You do learn the importance of consistency and not over trading.

[lusebrown]

Ok, 10% per month is quite unrealistic. I was using that as an example. All I was trying to say is that if you go for a prop challenge and pass, you will get 20 times more capital than trading with your own money.

So based on those numbers it is worth it.

But on the other side, the rules on prop challenges are very difficult. It is hard to pass a challenge and get a payout. And you may also not get paid. This is the biggest red flag of prop firms.
If it wasn't for this difficulty, paying $550 to get access to 10% of $100k is a good deal.
This is what I was trying to say.

[fariedrangan]

Must say i 100% disagree with you on this one Nick. Firstly by selecting a propfirm with a high rating on trustpilot allows you to have a certain amount of trust in them regarding payouts. Secondly many of these prop firms now offer single evaluation phases meaning one challenge phase after which you are funded. Thirdly the time limit has been removed meaning that unrealistic target of 10% per month isnt required for example: Im a recently funded trader I took a single phase challenge that costed me 60$ for a 5000$ funded account it took me about 3 months to pass it meaning roughly 3.33% a month going slow and steady with some good trades. After passing I had a 4% month meaning 200$ after profit splits and fees 150$ meaning I am already in the profit from my initial 60$ investment. I feel taking these challenges should be a long term option for traders that are low on capital.

[sthembisombuyazi]

There is no time limits on challenges, the key is just avoiding 10% drawdown and steadily pass the challange and verification. So not to rush passing just steady gains as for risks, everything in life is a risk

[byronsongbooktrades]

10 percent a month is easily achievable if you have 4-10 years of experience trading.

[DMartin]

Patrick Nil has been on Robbin's cup leaderboard every year since I think 2019 or 2020 and if you calculate his avg return it’s about 10% a month. It is very hard and very unlikely you'll consistently get an average of 10% return every month but it is possible... especially if you take the account size into consideration

[itsoktoberight]

Forget about the 10% a month! If you have a reliable strategy and make 5% a month then a prop firm will be the better option

[HXRMLESS]

10% profit can be done monthly, 10% per month every month risking 1% yes that can’t be done

[BaileyJames-zvddd]

Great video! People focus on price patterns, but volume is often ignored. I've been learning more about it and think combining volume with price action really improves technical analysis!

[NoSundaee]

My experience with prop firms has been fantastic...I went all-in with Toptier using my savings, and it turned out great, everything has been smooth and rewarding!

[mistuh]

I pull about 4% a month from a 200k account being very very conservative and I take the same trades on my personal account with a lil bit more drawdown maybe a full 1% per trade and can hold the trade with no daily reset non sense. Still I don’t work past 2 years cause of prop firms funding my personal. Most I made in one month was 41k and that was a year ago and has not happened since 😂

[sam-ltdq]

I tried a prop firm they shut me down first day for forgetting to put a loss stop. No warnings no second chance. Never again

[johnnyblaze]

ive recently started trading with top step, I passed the 50 k account after failing about 6 times which was 300 for all accounts, ive grew account to 4511 so far, ive gotten one payout of 1000 and I completed another 5 days of 200 profit so I will be Making my second payout tomorrow, personally for me prop firms have helped me to be more disciplined and not risk my own money for all those tests failed so far no complaints but I will say patience is key it will not happen over night

[TheScheckFamily]

Hey Nick, I believe u did not really get his point. No matter if it is 10% per month or 1%, at the end of the day the reward will be 20 times greater once funded obviously. But if I would have the capital u now have I also prefer trading my own funds over prop firms.

[mariaborisnova]

It's difficult to trade. Even more difficult to pass a challenge and even more difficult to reach payouts. But with all this said... using a prop firm can make you a better trader. I started in a simulator for 6 months straight. I studied and looked at the market for 10-12hrs per day. The last two months I was profitable and had both a good P/L and success rate. Then I joined and did a small challenge, risking only $100. I passed it on the first try by managing risk, calculating my position sizing, making sure I didn't blow my account and building a cushion. Today I have two accounts. One prop and one private. I feel confident in trading, thanks to learning how to be very very careful, thanks to the rules from prop firm trading. When I trade my private account I have the same rules and it's assuring me that I will not blow my own money. Trading is risky... but I would rather risk a small amount of money learning trading by following rules, then risking a larger sum on the market on my own. At least in the beginning.

[billychan]

It seems you did not understood the logic behind the question Mr. Nick, let's assume he makes 1% on average. This will be around 5usd on personal account and 100usd on a prop firm account (Yes I still know we need to pass the challenge). He was not asking whether it is possible or not, he took random percentage to calculate it easier I think

[Vinkoman]

Hey Nick, I find your approach to this really interesting. I am still a bit away of beeing longterm profitable. I got into trading through a friend who showed me trading and trading with prop firms. I am now trading for the past 1 1/2 years with a propfirm. I took the smallest account they had (50$/month at the time) just to get into the trading world. To get a feeling for trading real money, I created an account at the same broker, the prop firm uses. I lost the 400$ that I had on there. Now I am trading a "50.000$" account (not funded yet) with only micro ES and micro NQ contracts. Just to get a feel for my strategy. I know, that this way, the evaluation will take some time, but I can build the foundation. And even when I am funded in the future and the prop form does not pay out, at least at that point I know, that I am cosistant profitable and could do the same with my own money.

[czirjek]

Propfirms(this model) can be matematicaly (with no risk) tricked same like bookies and gambling site. So if you know the formula/arbitrage you eliminate your risk and get yourself for 550$ a capital of 10k(10% of 100k) that you can trade/play/gamble/yolo whatever suits you. That is the only way you should treat these propfirms. The companies are not here to help you get to bigger capital, they prey on the weak who dream for a better financial life. Just a fact from last year statistic( from the biggest prop firm) : out of 5000 challenges bought 4 people/traders got to actually receive a payout, so that is 99.92% of traders lost their money...just food for thoughts.

[affaefd]

thanks for covering this topic, hope you continue create more