It sounds like a dream:
Trading with other peoples money, not taking the losses but keeping up to 95% of the profit.
That’s the concept of propfirms. You have to pass a challenge (or buying an instant account) for a varying amount of money, depending (among other things) on the propfirm and the size of the funded-account.
So far so good. Or not.
But before we dive into it, here is the necessary risk-disclaimer:
RISK-DISCLAIMER: This is NO financial advice. This is not an advice to start trading. Trading is risky and may lead to a TOTAL LOSS of your money. This is also not an advice to use propfirms. This is just information and explanation for people, who chose on their own to trade.
So you might think:
Cheap challenges, high max-drawdown-limits and big profit-splits are making it easier and better for you.
I get you, but there is a catch. On most propfirms you trade on demo-accounts, they are not risking real money. That means, if you win, you are only winning artificial money. But they have to pay you with real money.
In other words: If you win – they lose!
That’s why I have chosen the propfirm TCT (and a certain instant-funded-account) with the following conditions:
At first glance it looks not like the best conditions. But additionally to other benefits the most important thing is guaranteed:
-They win small, when I lose
-They win bigger, when I win
That’s the only variant that makes sure that they can always payout their traders and that they are interested in you winning big!
And because of this strict conditions they are able to offer the most advantageous thing that you will not find at any other propfirm (at least I haven’t and I’ve checked around 50!):
Apart from that you can trade like you want. News, weekend-holding, EA, grid, martingale, arbitrage, HFT, signals, copytrading, whatever.
And why is this so important?
You know, most propfirms lose, when you win. They make money with the challenges (especially with the majority of clients failing to pass the challenges…). And to avoid paying out all successful traders, they created a bunch of
rules. Many traders are making profits on their own accounts with strategies and behavior that is forbidden on these funded accounts. There are lotsize-limits, percentage-limits for the biggest wins and many many more. If you violate
one of these terms, they can breach your account and decline the payouts. That happens many times, check out the reviews on trustpilot and also the rule-section on the propfirms pages! Sure there are some big-ones out there (f.e.
FTMO, Quantum) who paid out thousends of traders and are reputable, but be aware that there are some more rules too that could colide with your trading-style.
And another amazing thing with TCT is their unique scaling-plan (they vary within the different accounts, the numbers here are for my chosen 20k-instant-account “Trailblazer-L1”):
Yes, everytime you reach 6% profit your account is scaling up by 80%! If you reach it in a day, a week or a month, it doesn’t matter.
This tiny 20k-account can turn into a monster real quick! And for sure everytime you reach this target you will get a payout of the 50% of the profit. With this profit-split it’s guaranteed that they win whatever happens,
even with this incredible upscaling.
50% profit-split sounds small, but with this scaling-plan the account is growing so fast. After 7 times making 6% the account-size is already more than 1.2 million dollar!
And hey, better 50% of the profit from 1.2million than 90% of the profit from 100k!
But… 90% profit-split is also possible. Just “lock” into your level (wich level ever it is) and refuse the further upscaling. Then you are automatically in a 90% profit split. The best thing about it:
Let’s say someone locks in at 209.952$, the max-drawdown-limit (3%) is 203.653$. And it stays there! If you make some profit, you can create a little buffer and reach a much higher possible drawdown.
Compare with other propfirms, most of them have a trailing-drawdown, it’s always the same percentage of your current balance. You can never escape it.
If you want to check out their challenges and instant-funding-accounts, click on the banner below.
I personally love the “Xtreme Trailblazer-L1”-account, instant-funding with starting-balance of 20.000$. For me its the fastest way to make some nice cash.
But there are also other nice plans with higher drawdowns and slightly different amounts and profit-targets.
Affiliate-disclaimer: I only recommend products I use myself. All opinions expressed here are my own.
This post contains affiliate links and I may earn a small commission, at no extra cost to you.