I notice that several readers conduct keep commented upon my recent post service that quoted SMB Trading's Bella. The comments concerned the fees that SMB (and other firms) accuse for their preparation programs. This, to some, smacks of a scam.
So allow me to wade into a contentious area, 1 that has been hotly debated on around online forums:
I yell upwards the model inwards which prop firms accuse a preparation fee earlier a trader tin bring together the draw of piece of work solid is fraught amongst potential problems. How it is implemented makes all the deviation inwards the world.
As I banknote inwards this post in addition to inwards this one, really high didactics fees may hold upwards a sign that this is genuinely the way that the "prop firm" is making its money. When this is the case, the draw of piece of work solid volition conduct keep five-figure fees every bit a dominion in addition to volition allocate very, really modest trading size to traders. The draw of piece of work solid volition too accuse traders high committee rates. If the trader hits a for sure loss restrict (and the vast bulk volition because of the modest size in addition to high commissions), the trader volition either lose their "job" or volition hold upwards asked to advance to a greater extent than capital.
This, inwards my opinion, is an outright scam. There *is* no prop firm, only the illusion of 1 to lure newbie traders into educational programs. Very often, these efforts at didactics are quite thin, consisting of nix to a greater extent than than the sort of garden-variety technical analysis y'all could pick upwards inwards whatever trading text. There are no skills edifice efforts through simulators, no noun mentorship. Often, these watered downward programs are offered to traders who merchandise remotely (i.e., from their domicile locations). That's genuinely a alarm sign: truthful prop firms value teamwork, hands-on mentorship, in addition to trading technology; it's tough to sustain those when traders are remote.
Another alarm sign, ironically, is that the less-than-legitimate firms volition characteristic unusually high payout ratios, allowing traders to cash inwards one's chips on well-nigh all of their profits. That way that the draw of piece of work solid is non counting on trader profitability for their ain profits, in addition to it ordinarily way that the draw of piece of work solid is non firmly committed to trader profits. Rather, fees in addition to commissions are what the draw of piece of work solid is after. The trader is a client of such a firm, non an employee.
If y'all desire to bring together a prop firm, y'all should hold upwards able to come across the trading floor, interact amongst the traders, in addition to come across offset manus who is making their living from their trading. If the kimono isn't opened upwards to that degree, beware.
OK, that having been said, permit me conduct keep the other side of the argument:
I conduct keep no work amongst firms charging a fair fee for their educational efforts. This is peculiarly the representative when the draw of piece of work solid is offering the didactics every bit a stand-alone offering. There are really few prop firms that brand their preparation available to exterior traders. For instance, it's really hard to uncovering credible educational programs on reading society menses (tape reading). The plan at SMB is available at a fee for those who aren't affiliated amongst the firm. Traders tin assess the fee in addition to the content of the plan in addition to create upwards one's hear if it's a fair deal.
As a rule, if the educational offerings conduct keep a structured curriculum, opportunities for skills edifice (and non exactly information), in addition to final for weeks or months (not exactly days), they conduct keep the potential to motion traders' learning curves forward. I am non a fan of brief preparation programs, every bit they only lack the fourth dimension to develop skills.
When a trader is required to become through the educational plan (at a fee) to bring together the draw of piece of work solid every bit a prop trader, it's of import to watch the draw of piece of work solid every bit 2 sort out companies. The offset companionship is the didactics provider; the 2nd is the trading firm. It is possible that y'all could similar the companionship for its education, but non for its actual trading--or vice versa. By separating out the didactics from the prop opportunity, y'all tin evaluate each on its ain merits.
Personally, I would watch the chance to merchandise for the draw of piece of work solid every bit an out-of-the- coin telephone telephone option. In other words, if they similar me in addition to I similar them in addition to I practise good inwards the program, I may acquire a large reward yesteryear joining the firm. But I'm going to become into the didactics amongst the thought that the selection may expire worthless. I powerfulness non similar the firm, they powerfulness non similar me, in addition to my trading trend ultimately may non correspond theirs.
Once I conduct keep that mindset, I tin inquire myself: would I pay the fee for the education, fifty-fifty if it doesn't atomic number 82 to an offering to bring together the firm? If the response is no, I enjoin motion on. If the response is aye in addition to y'all too similar the frosting on the cake of the telephone telephone option, in addition to then it makes feel to pursue the training. But no trader, inwards my opinion, should "pay to play". The preparation has to stand upwards on its ain every bit a career in addition to economical value.
All of this way that joining a prop draw of piece of work solid requires considerable due diligence. There are existent scams out there, in addition to at that spot are honorable firms that offering a teamwork, learning-based civilisation in addition to solid training. Just brand for sure that the draw of piece of work solid is selling y'all existent training, non exactly hopes, dreams, in addition to fantasies. The posts below should hold upwards helpful inwards making the distinction.
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