Do you think prop firm challenges offer a good reward/risk ratio to traders?

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  • 41% (12)
  • 59% (17)
Total voters: 29
 
I am wondering if you believe loosing three challenges is worth wining one... Considering when you win you have access to a large account size.
 
Most traders lose money so I think prop firms' main profit are from the fee.
 
Prop firms will definitely provide the most reasonable risk reward, but whether the risk reward is reasonable or not, what is certain is that prop firms are a profitable business.

imagine if there are 1 million participants who register with a prop firm, at a fee of 500$ per person, they will get 500 million just by giving them the right to manage a 50k fund account if they pass the test, this is clearly a very profitable business. 

and I'm sure prop firms will continue to grow beyond the number of forex brokers, and I'm sure many forex brokers will probably create their own version of the prop firm challenge, this is a good business.

 
Yashar Seyyedin #:
I am wondering if you believe loosing three challenges is worth wining one... Considering when you win you have access to a large account size.

This is a very different question than what you ask in the headline.

I say no for the first question, and yes for the "three challenges is worth winning one", as many prop firms allow multiple attempts for 1 fee now.

 
Revo Trades #:

This is a very different question than what you ask in the headline.

I say no for the first question, and yes for the "three challenges is worth winning one", as many prop firms allow multiple attempts for 1 fee now.

I mainly meant what I said in the comments section.

 

Just to clarify my own position:

I think wining one challenge after three failures is worth it. Usually a small profit split compensates for those failures. But "the mindset of a trader having already failed three challenges hoping for a win" will remain and eventually cause the trader to loose.

 
Yashar Seyyedin #:

Just to clarify my own position:

I think wining one challenge after three failures is worth it. Usually a small profit split compensates for those failures. But "the mindset of a trader having already failed three challenges hoping for a win" will remain and eventually cause the trader to loose.

agreed. And i reckon that prop firms depend on that mindset to continue to coax traders to make multiple payments.

 
Votes are so close...
 
Yashar Seyyedin #:

...But "the mindset of a trader having already failed three challenges hoping for a win"...


To me this describes more the mind of a gambler, and not a trader.

The problem is that prop firms attracts people who sees themselves as traders,

But they are no different than gamblers.

People who are trying EAs/strategies that have failed multiple times in the past, but have a certain winning streak before failing,

And hoping to 'catch' the winning streak, and not the failing streak, to 'win' their funded account.

I believe that those kind of people are the reason why prop firms is such a profitable business (for the prop firms).


I believe that this is also the mindset for the people who voted 'no'.

If you were to have a profitable trading strategy,

And you could pay few hundred dollars (which are refundable anyway) in order to trade few hundred thousand dollars using your strategy,

Why wouldn't it be a good risk/reward ratio?

 
AMI289 #:

To me this describes more the mind of a gambler, and not a trader.

Agree. Exactly!

But you could ask it this way: Do prop firms offer a good reward/risk ratio to gamblers?
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