0:00 Prop firms are not going anywhere. In fact, I think they are more popular now than they have ever been. But futures prop firms seems to be grabbing more of the spotlight recently. But why? And are futures prop firms actually better for the trader? Or are they just after your hard-earned cash? Well, join me as I dive in a little bit deeper and uncover the truth. And by the end of this video, you'll know if futures prop firms are the right fit for you or not. I've been trading for over 8 years now, and three of those have been with prop firms. I have recently started dabbling in futures prop firms. And I'll be honest, in the beginning, I got my butt absolutely kicked. But could that just be because I didn't understand the futures prop firm world? I will start by looking at the challenges, the rules, and how their payouts work in comparison to Forex prop firms. But then I'm going to dig a little bit deeper and highlight
0:45 the certain things that caught me out and could potentially catch a lot of newbies to the futures prop firm world. Now, at this point, I do want to mention that this is not going to be an education on how futures trading works. I'm specifically just looking at the prop firms themselves. All right, guys. Let's jump over to this board over here. And before we actually start looking at challenges or rules or any of that, I want to actually just guide your attention over to some of the statistics I found between Forex prop firms and futures prop firms. And these are actually extremely important because this is going to actually come into play later in the video. So, make sure you pay attention. So, first off, I want to look at the pass rate for forex prop firms. So approximately 5 to 10% of traders successfully pass the initial evaluation phase. Now if you jump over to futures for the challenge pass rate
1:31 now the specific data was a little bit more limited I think because maybe futures prop firms are not as popular are gaining popularity now but the data was not as readily as available but I did find evidence suggesting that the pass rate is around 15%. Now bearing in mind that futures normally only has a single phase to get your funded account. It's only a single step to get your funded and that could be the reason that there's a much higher pass rate. But let's go on. All right. So now let's have a look at the payout rate of those who get funded on forex prop firms. About 20% receive payouts. Now if we jump over to futures payout of those who get funded, only 7% receive a payout. Let's now jump over to the overall success rate. So roughly 7% of all traders achieve a payout. So that's
2:16 everyone starting to getting a payout. about 7% with Forex. The overall success rate with Forex, however, only 2% of traders achieve a payout. Now, this is really interesting because you can see that more are passing the challenge, but less are getting payouts. And like I said, this is very, very important. And we're going to actually touch on this a little bit later. So, with that being said, let's keep going. All right, let's start the comparison. And to keep things simple, I'm going to basically stick to 50K accounts and one step between the two. The reason being is because the 50k account is the most popular by far with futures. And I'm also going to be talking about why that is a little bit later. So stay tuned for that. So the first thing I want to talk about is the trading conditions because I want to get this out the way, right? We all know that forex prop firms, there's a lot of manipulation, varying spreads, some
3:02 slippage, and it can be a nightmare to trade. But on the other hand, futures all run on one centralized price feed. There's no spread, and it is an absolute dream to trade. Now, if we were basing everything just on this, I would be trading futures all day long. But unfortunately, more comes into play. So, let's keep going. So, now let's have a look at the price. If you're looking at Forex prop firms, you're looking at around $300 for a 50k account. Now, this is a one-off fee, and in most cases, you can actually get a refund on your first payout. Now, we are seeing this start to drop off with some of the newer firms not actually offering that refund anymore. Now, futures, on the other hand, has a totally different fee structure. So, some firms will have an upfront fee, normally can go up to about $250, but worth noting that they often have incredible deals, and we're going
3:48 to talk about that as well. This will sometimes also have an additional activation fee, which means once you actually get your funded account, you have to pay an additional activation fee. Others will have monthly fees of around $70 to $130 per month. And like I said, generally there are often ridiculous discounts. All right, so let's have a look at the general rules. So, let's look at profit target. Normally, it's about 6% either side. So, that's the same daily draw down. You're normally looking at about 3 to 4% of a daily draw down with Forex. And when we jump over to futures, there's normally no daily draw down. Now, some will have, but it's more popular that they don't. And I'm going to be talking about why this is cuz technically they kind of do, right? So, let's go to max draw down. So, normally this is about a 6 to 8% with Forex and it's normally balance or
4:35 equity. We are starting to see a little bit of trailing kind of come in with some prop firms like E8 which I find very annoying but we're going to talk about that as well. Now with the max draw downs for futures you generally will have trailing draw down of about 4%. Now normally they will have an end of day trading or an on high equity. I'm going to talk about that and I'm actually going to show you examples of that. I just want to go through this first. So this is the reason they don't have daily because they have this trailing draw down. So because it's trailing, because that draw down moves with you as you make profit, generally speaking, you kind of do have a daily draw down as well because you've got this uh draw down following you all the time. So you've got to be very careful and you cannot trade too aggressively, which is what they want. Now, let's go look at profit split. Generally, you're looking at about 80 to 90% with Forex
5:22 prop firms, and they are very strict on withdrawals with futures. We're going to be talking more about that, but normally what you'll see is about a 50 to 90% profit split. but you have to hit a certain profit target before you can even make that withdrawal. So, it does get very very strict with their withdrawals and we're going to be touching more on that. Now, looking at their minimum trading days, normally it's about a 1 to5 minimum trading days for forex prop firms. You see a lot of zero, in some cases up to 10 minimum trading days, but they often will bring in consistency rules with that which essentially kind of makes that zero null and void because you can ultimately only pass or get to your funded account or get to your target in about 3 days anyway. So I would say normally you're looking at about 3 to 10 days. All right, so let's talk about consistency
6:08 rules. So we're only more recently seeing these consistency rules come in with forex, but it is becoming a little bit more popular. But with futures, however, these have always been there. You're looking at anywhere from like a 25% to a 50% consistency rule. We're going to touch more on that uh consistency rule in a bit. But what I want to draw your attention to now is this draw down. Right? So the first one I want to talk about is on equity high. Now this is probably not as popular. You see this on a few firms. I think Apex has this versus the end of day. Now what this means is that every single day within the day while you're trading you're going to have that draw down follow you. So, let's say for example, you start on a 50k. You've got a buffer of 2,000. That means your draw down starting at 48,000. You cannot go lower than 48,000. Let's say you move up to $2,000 in profit, but then you kind of
6:54 have a retracement and you decide to close out eventually at 51,000. So, you've made $1,000 profit, but now your draw down has moved up to the 50k point because your highest equity hit that 2,000. So, that means it moved up 2,000 and it never moves back. It only moves up. So now you are going to start your second day on 51,000 but you now only have essentially a 1,000 buffer. You essentially have cut your draw down in half and that makes it very very difficult the end of day. However, no matter what happens in the day, it's only calculated at the end of the day. So same scenario, right? You move up, you eventually decide to close out and you've got $1,000 profit, but you did kind of go up to 2,000. But because that's where you end at the end of the day, that means that your buffer stays
7:40 2,000 because your draw down has only moved up that th000. It's only followed to where you are end of day. You've still got that buffer. You now have your 51,000 and your buffer is now at 49,000. So this little picture here can show both. So let's imagine that this is all in one day. What'll happen is you move up, then you move down, but you can see your equity or your draw down stays there, right? And it stays flat. Now you go up again but this does not move up because you haven't actually gone higher than that equity high. The second you go higher than that equity high your draw down will start to follow with you. Okay. So it's very important that you understand how their draw down works because this is what caught me out. It's one of the biggest things that caught me out and it does make trading very very difficult. Now the other thing I want to really highlight is their very strict
8:26 rules with withdrawals. So like I said you have to hit a certain profit target before you can take your withdrawal. So, for example, normally you'll have 5 days that you have to be profitable anywhere from $200 to $500 and you have a minimum of $1,000. So, these are just random prop firms rules. So, just to give you an idea of some of the different types of rules you might find. Then another one would be something along the lines of 10 trading days with a 30% consistency rule or it could be 25, 30, 40, I've even seen 50. What this means is your biggest day cannot be more than 30% of your total amount at the end of when you actually want to take your withdrawal. Right? If it's a 40 or a 50, then basically your best day cannot be better than 40% of your total profit. And then another one would be 5 days of
9:12 $200 or more. So you have to have at least 5 days that you've made $200 or more. Now the next thing I want to talk about is when you are actually going for your withdrawal. So you have a single phase, you pass, then you've got your funded account. But technically speaking, you actually have another phase to pass and that is because you actually have to build your own buffer. So remember we talked about that equity and the draw down following you. So the same thing happens on your live account. Right? So let's say you were to move up to 52K. It doesn't matter how long this is taking. You've basically got all of these everything is green. You've hit your target of $2,000. Right? Now you take a withdrawal. But remember now your equity based balance, your draw down has basically followed you up to the 50k mark. So if you were to now take your
9:57 $2,000, that essentially means you now have zero buffer. You have no draw down buffer and you would have to close your account. So what has to happen is you have to build your own buffer. You get to that 52,000. Once your draw down hits that 50k, it locks in there. So anything above that, you can start taking profit. So, you essentially have to hit that percentage, whatever it is, depending on the prop firm. Once you've locked that in, you now can start pushing for your So, now you basically look for another 2,000. Let's say you now can take your withdrawal. You basically reset to there. You've still got that $2,000 buffer. So, you've always got to keep that equity based buffer there all the time. So, this caught me out big time because I was like, "Okay, cool. I've passed my first account. I'm straight into a live." But technically speaking,
10:43 I couldn't make any withdrawals. I still had to build my own buffer. So this is something that is very very important and you have to be aware of. All right, so let's quickly recap, guys. Futures are very smart how they have structured their accounts, right? They get you with their very attractive fees. They often will have incredible deals. This lures you in. Once you're actually in and you actually start trading and you get to your funded account, once you pass the challenge, they will actually charge you thereafter. you will either be paying an activation fee or you will be paying a monthly fee. Now, for your better traders, this is fine because you are essentially making that money, paying it. So, you're always kind of recuperating that money or you're creating that cash because you are a consistent trader. You make the money and it's essentially paying for itself.
11:29 But traders that sometimes struggle and that are not getting their their payouts that often or are, you know, struggling to build that buffer, this could take you 2 or 3 months. you're still having to pay or you've paid that activation fee. So, that's how they can get you there. So, a lot of the prop firms will have different types of rules. Some of them will appear to be a lot easier to actually pass your challenge. But what often will happen is if they are easier to pass the challenge, you'll normally find that they are much tougher with their rules to get to your payout. And if you have ones that are much easier to get your payout, you'll find that they were actually a lot tougher to get your challenge. So, they're very smart how they structure these challenges. Whichever way you go, they're going to make it very difficult for you to ultimately either get funded or get to your payouts. You've got to be a very
12:15 consistent, very confident, and profitable trader to actually make this work. Now, remember I said that the 50K is generally the most popular. Now, why is that? And it's actually because that has the best profit to draw down ratio. So, let's have a quick look at what this actually means. So as you go with bigger and bigger accounts, the ratio, your profit to draw down or your draw down to profit ratio actually goes up, which ultimately makes it much harder to pass. For example, when you go for the 50k, you'll normally have like a 3% or a 4% draw down, and you've got to make maybe 6% profit. But then as you go to like the 100k, you're going to find that you need to make maybe about an 8% profit, but your draw down suddenly will drop to 2 or 3%. And then the higher your account gets, the bigger that ratio
13:01 gets. So it actually makes it a lot harder to get to that target. So very very important. So why is the 50k the most popular? Well, even though the 25k generally has a better profit to draw down ratio or draw down to profit ratio, whichever way you want to look at it, it's still kind of looking at the 50k in terms of the account size and the draw down ratio. It's kind of the sweet spot and this is where people seem to have landed and this is why the 50k is the most popular. And finally, when it comes to futures prop firms, you really have to look at the payouts totally different to how you look at the forex prop firms. You need to hold onto your profits as this is what gives you the buffer. So, you kind of have to grow your account a little bit. I've seen some people grow their account 10, 15 or even 20% and then they will start basically looking
13:46 at taking payouts. So, you've got to kind of like compound your profits. You've got to build that up and then you can kind of build your own buffer and then you can quite easily start to take your profits, you know, whenever you need. But you first have to build it up. Whereas with Forex prop firms, you kind of just want to get your funded account, get a payout as quickly as possible, right? You get your funded, you go for that 2 3%, you take your payout and you reset. It's kind of make your money very very fast. And then remember the stats we looked at. Now it's very clear why these stats are the way they are because number one, they are normally all singlephase. So to get to your funded account is normally quite easy and generally like I said they are trying to make it fairly easy but then they catch you with other things. They'll either add you know the activation fee or the monthly fee and then they will kind of
14:31 make it very difficult to get those withdrawals. So generally speaking getting withdrawals with the futures does seem to be a lot harder. Now this finally leads me to that question should you trade futures? Well, if you come from trading futures on your own personal account on live account and you generally are used to trading indices, then of course I would say trade futures because it makes sense. Now, if you are fairly new to trading and you're just looking at getting hold of some capital to make some quick payouts to build some capital of your own, I would say then generally stick to forex. Now, if you are a very consistent and experienced trader who understands futures, I would say definitely you want to be taking these futures prop firms because you can be a lot more consistent once you've got to your funded account, once you've
15:18 built your buffer and once you can start making those small payouts. These futures prop firms also allow you to take multiple accounts at the same time and they also allow copy trading. So, what I see a lot of very good traders do is they kind of build up a huge portfolio of funded accounts. And then what they'll do is they'll maybe break it up. Let's say they have 20 funded accounts of all of 50K. They'll break it up into maybe two sets of 10. Or they'll set up one account, copy the other nine, and they'll just look for maybe a 1 to 2% as long as they're sticking to all of the rules. They'll hit their profit target and then they take that withdrawal times 10. So imagine you're getting to a $2,000 withdrawal or even a $1,000 withdrawal. times that by 10 and then you reset and you can do that what every couple of weeks and that's just on half of their accounts. So you find that there's futures traders that are very
16:03 very consistent very very good traders that can make a lot of money with these prop firms but you do have to know what you're doing. Now, at the end of the day, futures or forex prop firms are ultimately going to be doing whatever they can to not pay out because they are both running the same business model at the end of the day, right? They are basically paying their profitable traders with the money that they've made from the traders that are losing and basically paying that challenge fee. The thing is, you can win. You have to find a system that can take small profits multiple times, spread that between a load of accounts. So, there is a system. There's a way that you can make money with these prop firms, whether it's futures or with forex prop firms. Now, speaking of which, here at Blue Edge, we've actually developed an incredible system just like this for passing prop
16:49 firm challenges. Not only passing, but getting multiple payouts. Now, if you're interested in getting funded 100K or more, like 1,200 people in our community, that's right, 1,200 people plus have currently been funded 100K or more. Now, if you're interested, just go to www.propfarming.com. Have a look at the demo video. All the information is there and basically you can trade automated and start getting funded. Maybe this is the way you can start building up some capital that you can start venturing into futures prop firms as well. Please let me know guys in the comments if you guys are futures traders. What do you think? If you've traded both, have you traded futures and forex? Which do you prefer? But that's it from me guys. I hope you enjoyed the video. Hit that like button if you did like it if you haven't already. Make sure you subscribe to the channel and I will see you guys
17:35 in the next video.
