We first started to get asked about funded trading a couple of years ago. At the time we knew little about the new companies that were beginning to appear, and as an experienced business in this financial trading sector we were naturally cautious and a little bit sceptical. The trading business is stuffed full of scams and people looking to make a fast buck. Initially we thought funded trading could be a big scam. After-all, if it sounds too good to be true it usually isn’t true. We decided to dig deeper.
Funded trading firms offer traders the opportunity to trade significantly larger trading accounts and the firm splits the profit between the trader and themselves. This access to a much greater fund gets over the number one hurdle all traders face – a lack of significant capital. Proprietary trading firms in Chicago, Wall Street and the City of London have been doing this for years. “Prop” traders trade large funds on behalf of investors and get a split of the profits.
In the online funded trading business model, people pay a fee to the funded trading firm to be assessed as a good enough trader to be given access to larger capital sum. Our first thought was that the pass criteria was probably set so high that nobody would pass and the firms were just pocketing the fees with no real chance of success for the traders. We set out to find out.
We’ve been running our live trade room since 2013 and we’ve helped thousands of traders and we’ve got great contacts in brokers and other city trading organisations. So we set about asking them all about their knowledge and experience of these funded trading firms and the news is relatively good but it’s a mixed bag. Funded trading isn’t a scam but it’s a new business model in this business arena. Some companies are good and some are bad and there might be a few who are just scamming their customers. We therefore very much recommend you do your own homework and due diligence.
We did a shortlist of some of the better companies and looked to try out a few. Each has different advantages and different disadvantages. You may have seen Simon trading one of these firms on NinjaTrader live in our Live Trade Room. He has gone through the full selection process and has passed the selection process three times and he now does have access to 3 “real” accounts. He has video recorded his live trading and has now produced an E-mini scalping course specifically designed to help traders pass funded trading test like the ones he has done. This course is now available here.
It turned out our research into funded trading opened up a few new doors to us. One of our long term city contacts was looking at developing a new funding trading model themselves and they were very interested in our research. Their access to massive liquidity and funding teamed with our knowledge of the needs of retail traders – the type of traders who have been members of our Live Trade Room is a synergistic match. We have now been working with a number of these contacts over the last 6 months to develop our own new approach to funded trading and we have teamed up to offer a new service, Funded Trading Plus.
Funded Trading Plus is designed from the ground up to be better than all of the existing Funded Trading firms currently in the market. We’ve removed as many of the trader barriers to success as possible. You see the reality is that we really want to find successful traders. Our liquidity provider is able to multiply the success of a good trader and from that we are able to create a large fund that is available for our funded traders. If we find a great trader and fund them, then the result is of mutual benefit to both the traders and us: a win win.
Funded Trading companies do not all run the same type of business models. We’d like to think that some of them really do want to find great traders as that is what benefits their business model rather than making large sums from customers who can never pass their tests.
Here are the 5 types of funded trading companies you should stay away from:
1. Open a broker account model: these companies force you to open a broker account from which they get paid a large broker commission
2. Re-set fee model: These companies often set difficult to follow rules and tight drawdown limits that force their customers to pay re-set fees
4. Demo account model: The companies make a demo look real and limit your chance of success through unrealistic rules. They often make their money from customer monthly fees.
5. Shared Funded Account: These companies promise that customers will get a large account, but the reality is that successful traders find it is shared with all the other funded traders and they are only able to access a small drawdown sum.
Funded trading as a business model is not a scam and it is possible for traders to get funded with large amounts of money. However, there are a number of companies that benefit more from customer fees than from funded traders. Funded Trading Plus offers traders funding of up to $500,000 and the business model is built to benefit traders. If you are a great trader looking to get funded, head over to the Funded Trading Plus website now.
Please tell us your Funded Trading experiences – good or bad! Comment below.
At Trade Room Plus we have never met a trader who has built a small account into a significantly large… Read More