Brief Summary
This video compares Forex and futures prop firms, highlighting the differences in pass rates, payout rates, trading conditions, fees, and rules. It explains the challenges and advantages of each, offering guidance on which might be more suitable based on a trader's experience and goals. The video emphasises the importance of understanding the specific rules of futures prop firms, particularly regarding drawdowns and withdrawal conditions, and also touches on a system developed by Blue Edge for passing prop firm challenges.
- Futures prop firms are gaining popularity but have different success metrics compared to Forex.
- Trading conditions are better with futures due to a centralised price feed and no spread.
- Futures prop firms often have stricter withdrawal rules and consistency requirements.
- The 50K account is the most popular in futures due to its optimal profit-to-drawdown ratio.
Introduction: Futures Prop Firms vs. Forex Prop Firms
The video introduces the rising popularity of futures prop firms and questions whether they are genuinely better for traders or just after their money. The presenter, with over eight years of trading experience, including three with prop firms, shares his initial struggles with futures prop firms. The video aims to compare the challenges, rules, and payouts of futures prop firms with those of Forex prop firms, highlighting potential pitfalls for newcomers in the futures prop firm world. The presenter clarifies that the video will focus on the prop firms themselves, not on educating viewers about futures trading.
Key Statistics: Forex vs. Futures Prop Firms
The video presents key statistics comparing Forex and futures prop firms. Forex prop firms have a challenge pass rate of approximately 5-10%, while futures prop firms have a higher pass rate of around 15%, possibly due to the single-phase evaluation process in futures. However, the payout rate for funded traders is about 20% in Forex, but only 7% in futures. The overall success rate, which is the percentage of all traders achieving a payout, is about 7% for Forex and only 2% for futures. These statistics highlight that while it may be easier to pass the challenge with futures, it is harder to get payouts.
Trading Conditions and Pricing
The video compares trading conditions and pricing between Forex and futures prop firms, focusing on 50K accounts with a one-step evaluation process. Forex prop firms are known for manipulation, varying spreads, and slippage, making them challenging to trade. Futures, on the other hand, operate on a centralised price feed with no spread, offering a smoother trading experience. Forex prop firm accounts cost around $300 with a potential refund on the first payout, although this is becoming less common. Futures prop firms have varied fee structures, including upfront fees (up to $250), activation fees, or monthly fees (around $70-$130), but often offer significant discounts.
General Rules: Profit Targets, Drawdowns, and Profit Splits
The video outlines the general rules for Forex and futures prop firms. Forex firms typically have a 6% profit target and a 3-4% daily drawdown. Futures firms often have no daily drawdown, but instead use a trailing drawdown. Forex firms usually have a 6-8% maximum drawdown based on balance or equity, while futures firms generally have a trailing drawdown of about 4%, often with end-of-day or on-equity-high calculations. Forex firms offer profit splits of 80-90%, while futures firms offer 50-90%, but with stricter withdrawal conditions, such as hitting a specific profit target. Minimum trading days are typically 1-5 for Forex and can range from zero to ten for futures, often with consistency rules.
Drawdown Types and Withdrawal Rules
The video explains different types of drawdowns in futures prop firms, including on-equity-high and end-of-day drawdowns. On-equity-high drawdowns adjust throughout the day based on the highest equity reached, reducing the buffer as profits increase. End-of-day drawdowns are calculated only at the end of the day, providing a more stable buffer. The video also highlights strict withdrawal rules in futures prop firms, such as needing five profitable days between $200 and $500, a minimum of $1,000 profit, or consistency rules where the best day's profit cannot exceed a certain percentage (e.g., 30-50%) of the total profit.
Building Your Buffer and Recapping Futures Prop Firm Strategies
The video explains that after passing the initial challenge, traders must build their own buffer in their live accounts before making withdrawals. The drawdown follows the equity, so traders need to exceed the initial profit target to lock in the drawdown and create a buffer for withdrawals. The video recaps that futures prop firms attract traders with appealing fees and deals, but then impose activation or monthly fees. Firms with easier challenges often have stricter payout rules, and vice versa. Consistency, confidence, and profitability are essential for success.
Account Size and Payout Strategies
The video explains why the 50K account is the most popular in futures prop firms, citing its optimal profit-to-drawdown ratio. Larger accounts have a higher ratio, making them harder to pass. The video advises that with futures prop firms, it's important to hold onto profits to build a buffer, unlike Forex prop firms where traders aim for quick payouts. The presenter revisits the earlier statistics, explaining that single-phase evaluations in futures make it easier to get funded, but activation or monthly fees and difficult withdrawal conditions make payouts harder to achieve.
Final Recommendations and Blue Edge System
The video concludes by advising traders to choose futures prop firms if they are experienced with futures and indices. Those new to trading and seeking quick payouts should stick to Forex. Consistent and experienced futures traders can benefit from futures prop firms due to the potential for multiple accounts and copy trading. The presenter notes that all prop firms aim to minimise payouts, but success is possible with a system that takes small profits across multiple accounts. The video introduces Blue Edge's system for passing prop firm challenges and achieving multiple payouts, inviting viewers to visit propfarming.com for more information.
