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In the wake of the collapse of My Forex Funds, this article is more important than ever. Discover the advantages and disadvantages of the 5ers and learn from the mistakes of My Forex Funds in this comprehensive comparison. Explore the key factors to consider when choosing any proprietary trading firm.
Understanding the Prop Firm Industry.
Proprietary trading should be straightforward. The company has private equity and is not a brokerage or financial service company. Ideally there is a private fund and an agreement to compensate third party traders for managing programs within the fund. Three sentences and the entire industry can be summed up in a nice eggshell.
Be forewarned, look can be deceiving has never applied to an industry so precisely. Lets talk about some of the ugly truth. The primary weakness of all traders starting out is the need for capital.
If the adage it takes money to make money is true having no money becomes a self fulfilling prophecy. Prop firms prey on the weakness and need of aspiring traders and transform retail traders lost into their own company's liquidity.
MFF has been the most recent of a long line of sketchy firms that would get both red listed by the CFTC and shut down putting an end to the dreams of every profitable trader with accounts at the firm
Many traders who have limited funds also lack the necessary knowledge and experience to make informed investment decisions and because of this knowledge gap retail traders are prime for exploitation.
Some newbies know the difference between MT4 and MT5 brokers, but ultimately many times data can also be counter party leverage. The firm knows traders need a platform or fund that can provide guidance and support to help them navigate the complexities of the Forex market so this becomes a blue ocean where traders bank accounts literally provide "Ponzi Scheme" level liquidity conflicts.
Moreover, traders desire opportunities that offer high returns on their investments. The idea of paying less than 500 dollars for access to 100k trading capital may seem attractive, until you consider the draw-down limits and risk management requirements. The desire to maximize profits in the short term often trades off with the ability to use proprietary firms as a long term strategy that will help appreciate wealth through successful trading.
Now, playing devils advocate, prop firms can be one of the best ways traders just starting out can receive the funding they need to build a fund management track record that will allow them to transition to a professional. With that said, traders must be cautious to ensure that their hard-earned money is not lost due to poor investment choices. Performance coaching is one potential solution that can provide both the potential for high returns and appropriate risk management strategies.
Are Prop Firms Reliable
Traders desire reliable returns from their trading activities. With over 9 trillion in daily volume foreign exchange markets present a myriad of investment opportunities for stable and consistent income.
Prop firms want traders to invest their money in their own unregulated platforms. The thinking is if one has the money its simply a contractual issue if one pays another to execute trades on their company's behalf. This is much different than a brokerage or a product from a financial service company or a private equity funds that have a proven track record of success.
Reliability is crucial for traders to minimize the risk of losing their investment capital but its not guaranteed that prop firms will align themselves with trustworthy and reputable brokers and other regulated entities in the forex market specifically the CFTC
Furthermore, traders desire investment opportunities that offer flexibility and convenience. Whether it's the ability to withdraw profits on a set schedule or monitor the performance of their investments, traders value convenience and ease of use in their forex investment opportunities.
The 5ers versus My Forex Funds
In this comprehensive comparison, we will analyze two opponents, one of them alive and well the other one has already been vanquished. The battle between the 5ers and My Forex Funds may have been resolved but the question of the prop trading wars wages on.
The 5ers is a renowned forex funding program that provides traders with the opportunity to trade with a larger capital base. It offers traders the chance to showcase their skills and potentially earn a funded account. On the other hand, My Forex Funds was a prop firm acting as an unregistered investment brokerage that allowed individuals to invest their capital and have professional traders manage their funds.
When comparing the two opponents, it is crucial to consider factors such as corporate structure, funding requirements, profit-sharing models, risk management strategies, and transparency.
Each option had its own pros and cons, and reviewing this battle will help inform traders of the ongoing need to carefully evaluate the options when choosing to trade for a prop firm. Be sure to look for a reputable company with great reviews, a track record of on time pay out and good customer support. MyForexFunds never had these things and that was an early red flag.
Personally I trade with the 5ers and I am a profitable trader. If you don't want a discount to trade for what in my estimation is the best prop firm, make sure you find a company that aligns better with your goals and preferences.
Creating a Plan for Forex Investment Success
Coaching is a skill set. Trading is a skill set, Technical charting is a skill set, but foreign exchange markets are an industry. To be successful you must transform your trading skills into a business and the first step in a plan that includes clear business objectives
Do you want to be able to quit your day job? Are you looking to raise extra money to help fund passive contribution strategies or is trading a hobby you feel can make you some money?
Whatever your goal in order to achieve real success in Forex investments traders need to create a well-defined plan.
This plan should outline all their investment goals, risk tolerance, and preferred trading strategies.
Traders should assess their financial situation and determine the amount of capital they are willing to invest in the Forex market.
Additionally, they should research and analyze different investment options, and due their own due diligence. To assist these ends case studies such as this one that compare the 5ers and My Forex Funds, are an invaluable source of retrospection.
I personally was an affiliate for MFF and I can tell you I was personally burned with slippage. If you know I trade extroverted high risk high reward high accuracy. I can't be tricked with simple manipulation yet and still I lost my small account and never received a payout. Let this be a lesson to traders everywhere.
Moreover, traders should consider diversification as a part of their investment plan. Diversifying their investments across different brokers and different opportunities can help mitigate risks and maximize potential returns. Right now my brokerage is Charles Swab, I have a personal account with IG, I trade two programs with the 5ers and I am currently building my own DarwinX index that is objectively tracking the profitability of my trading strategy. Remember numbers don't lie. It is important to have your own clear plan in place to guide you as a business owner in a large industry designed to give your money up in commissions to the broker. Can you believe I paid 200 dollars in commission just last week (but that's a whole article of its own).
The Battle: Evaluating Performance and Risk
- ACCOUNT SIZE: 100K
- PROFIT TARGET: 8% or 5%
- DRAW DOWN: 5% daily / 12% total
- PAYOUT SPLIT: 70/30 up to 90%
- MINIMUM DAYS: 5
- TIME LIMIT: 30 Days & 60 Days
- SCALING PLAN: $25K Every 3 months + consistency rules
- CREDIT: No
- 1 ONE 1 COACHING: Yes
- PRICE: $499
The 5ers High Stakes 100K
- ACCOUNT SIZE: 100K
- TARGET: 8%-5%
- DRAW DOWN: 5%-daily / 10%-total
- PAYOUT SPLIT: 80/20 Up to 100%
- MINIMUM DAYS: 3
- TIME LIMIT: 30 Days & 60 Days
- SCALING PLAN: $25K Every 10%
- CREDIT: Yes
- 1 ONE 1 COACHING: Yes
- PRICE: $495
The side by side comparison is pretty attractive. In terms of pricing the 5ers were slightly more affordable but in exchange MFF had a slightly larger draw down limit. It is easy to make claims of suspicions retrospectively, its much less easy to recognize the difference between reliable and fraudulent.
When it comes to evaluating the performance and risk of choosing a prop firm comparing and contrasting the 5ers and My Forex Funds will help traders see the need to consider various factors aside from just the marketing.
They should analyze historical performance records, risk management strategies, and the expertise of the professionals managing the funds.
Traders should assess the level of risk they are comfortable with and evaluate whether the potential returns outweigh the risks involved.
It is crucial for traders to conduct thorough research and due diligence before making any investment decisions. They should compare the performance and risk profiles of the industries leading competitors and use due diligence to make informed choices that align traders with suitable investment goals.
MyForexFunds Collapse: Overcoming the Challenge of Losing Your Prop Firm
As I write this True Forex Funds has just been suspended by Meta Quotes. It's now becoming a common cycle where every couple years your favorite prop firm becomes suddenly enthralled in controversy.
As your performance coach don't say I didn't tell you first but there are a lot of new firms that are shady and have potential liability issues. Keeping this focused on the collapse of My Forex Funds.
I will say that I recently received marketing materials from a notable new prop firm and it looks like they changed their language about what they offer to traders.
Now they only offer "virtual funding," whatever that means!
Throughout ones investment journey, traders will invariably experience self-revelations and learn valuable lessons along the way.
Case studies provide side by side comparisons that can provide investors with information they need to reduce the time and information burden of due diligence. As your performance coach, I am concerned about the well being of traders. Coaching traders on risk management and trade execution becomes moot when your prop firm pretends to be a brokerage and plays bank with your personal assets while you gamble with institutional tokens.
Traders must realize the importance of patience and discipline in trading. It takes time and experience to discover the significance of continuous learning, and an agile skill set that allows traders to adapt to changing market conditions. Traders may learn from their mistakes and the mistakes of other traders to get a better understanding of the need for sound risk management strategies.
Self-revelations and lessons learned from experience are crucial resources for traders seeking to improve their trading skills and achieve long-term success in Forex or trading any financial products in a business capacity.
It is important for traders to reflect on their experiences and make the necessary adjustments accordingly.
Picking a Firm Can be Similar to Finding a Table in the Casino Only the Dealer or the Broker Can Deal in Guarantees
The broker is going to win. The prop firm masquerading as a financial service company is going to win. As far as traders the odds are already stacked against us.
Anyone with money can pay anyone with skills to enter trades on their account.
This is not a financial service relationship because the company with the money is not the provider of financial products or the giver of advice to investors. The relationship begins and ends with paying traders to execute trades.
For traders it can be confusing, we just want to trade we don't care about the broker aside from how much commission or margin they offer. This quick and impulsive behavior is not without its own set of risk and our goal is to overcome these challenges to achieve high level success.
After considering all the pros and cons, evaluating performance and risk, and reflecting on lessons learned from competitors in the industry, traders now have a commonwealth of knowledge to achieve clarity about the process of making an informed decision when choosing your next brokerage.
Every trader should do research and due diligence but they also need to carefully analyze their findings and determine which option aligns better with their goals preferences and risk appetite. It is essential for traders to make a decision that they are comfortable with and confident in. If you choose to trade with a less than reputable broker or company understand the risk and be prepared to withdraw your liquidity as often and as early as your program stipulates. Keep a back up fund that will allow you to have a recovery plan in case you liquidate or have one account loss you should always have back up options in business this is called contingency planning.
With a suitable plan in place traders can comfort and certainty that their business will continue and their skill sets will still be valuable no matter what the market, brokerage, or the prop firm does.
Resiliency can set traders apart from others and help charter a path towards profitability and making more sound investment decisions.In time traders can move forward with experience and even if their chosen option fails the work in the market continues as well as the continuing educational burdens it presents.
By choosing a performance coach traders can benefit from a mentor that has personal experience with success, someone that can motivate them to work towards maximizing their returns while effectively managing risks.
