Respectfully disagree, Matt. You could have done 10mins of research to know that prop firms are as old as the markets. They used to be called 'bucket shops' back in the early 1900s. They've changed their structure and barriers to entry over time and that will be constant. Before the GFC investment banks used to house huge prop desks until they were banned by the Volcker Rule. That does not mean any individual prop firm has infinite life. As we know from the past year at least two shops have ceased to exist. The correct advice should be: use the prop firms to your advantage to build capital and diversify your capital. Never keep your funds with one single prop firm or broker. EVER. So long as there is speculation there will be a prop firm willing to seed capital and take their share of profits. GL
You're referring to conventional prop firms there VS the latest round of the 'retail' prop firms. Conventional props in most areas require accreditations of some level and are linked directly to live capital. Those cats are already going through the necessary protocols, both on the financier and trader side. And that has been the same, as you say, since day dot. Retail props most definitely don't fall into that category, especially from a legality and compliance standpoint. And my point is not around whether there we will be companies who stick around with capital who will provide funding to independent traders who are vetted and accredited (conventional props). My point is more along the lines of the retail niche that has allowed any bod to buy a challenge and trade with demo capital. And I couldn't agree more on the advice surrounding leveraging prop firms for personal accounts and onward growth etc. And that's something I outwardly encourage. Valid points, delivered respectfully - I do appreciate it. If only all comments were so constructive!
@@MatttoMillion I see what you mean. I still think it's a natural evolution of the markets and digitization. Prop shops for retail (there's still a few dotted around London) use a similar process - they charge a 'desk fee' or course fees to join then put you on simulator until they feel you've earned the right to trade real capital. The regulators care as much about people losing money to prop firms as they care about FX brokers offering 1000x leverage to allow retail to self-destruct. Retail is such a tiny part of the market they are barely worth regulating imo. My pleasure! You make good content mate, keep it up.
'true' proprietary trading businesses are regulated, where due to these being a demo cap work around, it's opened the door for anyone to have access. Businesses are still regulated by country/continent laws and so if there are enough complaints being brought to the eyes of the consumer rights boards, they will look further into it and likely compare it to 'true' prop trading and then start placing additional steps in place. There was an FTMO competitor in Australia that got burnt last year and I believe they're still fighting a court case. I hope it doesn't happen this way but people who lose/get bitter, tend to throw their toys out the pram and that impacts the people with their head screwed on!
If offshore binary options can last this long and still be active specially when the FBI came in shut down alot of brokers who was scaming and not paying out...trust me prop firms not going nowhere there are plenty companies popping up every others week ...and even the regular forex brokers like kot4x who been out for yearss are now doing funding accounts following the same trend as others ...Soo I don't see it ending noooo time soon it's just going too get bigger!!! This just the beginning!!!
I think it can be sustainable but it's going to go through phases where you have new companies pop up and then die out,I mean at the end of the day they are running a business and not a broker and if you are a trader associated with them you should look at it from an employee point of view, yes they give you an account but it's their fund at the end of the day, so if one runs out of business you move onto the next,you may loose the account but you won't loose the skill
Interesting video, I have two comments 1) off the top of my head, there are firms based in Israel, UK, EU, Switzerland, US, Canada and Australia. The international community hasnt a good record on financial regulation agreements. If one area goes for it, another will welcome them with open arms. EG EU vs UK. Look at how many brokers now have an arm based in the virgin isles and elsewhere. 2) The parent fund to Lux is already regulated by the Swiss, so theyre ahead of the curve.
Absolutely - on both points. I think it's the forward thinkers, as you say, who are laying the legal routes now, who aren't as 'famous' but ultimately, when the hammer comes down, they'll be the ones in prime spot to keep the space moving in a similar vein. Thanks for the comments too - diligent points, shared respectfully - appreciate it 🙏🏻🙏🏻
I could see different countries adopting different rules which in effect would bar some people from entry. Very likely they'll need to post some stats on pass rates and disclaimers as well.
I think just like the ESMA regulation that was brought it to curb leverage available to retail traders in the Uk there will always be loopholes to exploit to get around regulation 😜
One of the most interesting aspects of the human species is the ability to adapt and transform in the face of a change-event. This has happened for centuries. In the event of a regulatory clampdown of the industry, I believe Prop firms will adapt and evolve rather than folding as you are predicting. In addition, more technological advancements will make the industry a completely different landscape in the future than it is today. This is already playing out. Meanwhile, Good analysis Matt, but you are leaning too much on the pessimistic scenario, ignoring the fact that the prop firms that have succeeded thus far have the financial power to endure even the stringent regulatory changes for the industry. #foodforthought
Great comment! No you're right - of the two I definitely side more with pessimism when it comes to that side of things! And like I say, I hope I'm wrong for sure! One thing you're spot on about, is institutions finding ways around! For me it comes down to motivation of the company. At the moment it's a relatively 'easy' route to market with very high margins. With all the white label products too, it's become a cash cow. So should they get stumped with further regulations and higher operating costs as a result etc. it may prompt a bit of a mass exodus from the market when too much 'effort' is required on them - though to your point, this should leave the 'true' businesses who are there for the long term and willing to accomodate international jurisdictions. Long may it continue!
Hey Matt. Interesting topic. If there will be more regulations in the future for this kind of business or not, I dont know. I hope not. But, right at this moment it is kind of illegal to give any investment advice without being licensed by FCA. As far as I know, any prop trader gives investment advice, isn't it? How can we deal with this in UK? What SIC code should I use for my company to trade with one of these prop firms? It seems like nobody knows. If you contact the prop firms they say you are a "portfolio manager" contractor (which is illegal unless regulated by FCA). How do we deal with this?
Matt wanted to ask you about backtesting for a day trader that takes his entries mostly in the 5 min timeframe, how much do you suggest to go back in historical data ( day's , month's) to start backtesting from there.?
Hey man, it's tricky with 5m, as there's a limit to the data. My advice is as far as possible! But trading view won't allow you much in the way of history at that range. You're best off investing in something like softfx to work at that level. But I'm not the best person to ask surrounding those time frames!
Hi Matt, would you know if you can set up a company for your trading plus retail investments (rental income) combined? Or would you have to set up two companies?
Great video again Matt, my only comment I would like to leave here is assuming in 5 years things will change against prop firms and funded traders, my question is are we still gonna be able to trade on our private live acounts or been a day trader is not an option after 5 years if things do change?
@@MatttoMillion After posting a comment in your video, your boyfriend reached out to me, saying that you're a multimillionaire. Then I came back to check out the content of your videos (Yeah, I did not know who you were at the moment I commented, I was being a hater), and I realized that you do share good content in your videos. I want to apologize for my words!
@@MR-wk4po Big respect for commenting back man - appreciate it 🙏 I don't blame you anyway, 99% of the space is littered with nonsense. And LOL you gotta admit, the guy has some pretty wild shirts 😂 take it easy man - fingers crossed for a strong end to the month.
I believe prop firms will increase their capital availability for retail traders and evolve to brokers at the same time.
Let's hope so! 💪🏻🙌🏻
there are some already doing that like OspreyFx
Prop firms need to be investigated. There is too much shadiness going on behind the scenes!
Respectfully disagree, Matt. You could have done 10mins of research to know that prop firms are as old as the markets. They used to be called 'bucket shops' back in the early 1900s. They've changed their structure and barriers to entry over time and that will be constant. Before the GFC investment banks used to house huge prop desks until they were banned by the Volcker Rule.
That does not mean any individual prop firm has infinite life. As we know from the past year at least two shops have ceased to exist.
The correct advice should be: use the prop firms to your advantage to build capital and diversify your capital. Never keep your funds with one single prop firm or broker. EVER.
So long as there is speculation there will be a prop firm willing to seed capital and take their share of profits. GL
You're referring to conventional prop firms there VS the latest round of the 'retail' prop firms. Conventional props in most areas require accreditations of some level and are linked directly to live capital. Those cats are already going through the necessary protocols, both on the financier and trader side. And that has been the same, as you say, since day dot.
Retail props most definitely don't fall into that category, especially from a legality and compliance standpoint. And my point is not around whether there we will be companies who stick around with capital who will provide funding to independent traders who are vetted and accredited (conventional props).
My point is more along the lines of the retail niche that has allowed any bod to buy a challenge and trade with demo capital.
And I couldn't agree more on the advice surrounding leveraging prop firms for personal accounts and onward growth etc. And that's something I outwardly encourage.
Valid points, delivered respectfully - I do appreciate it. If only all comments were so constructive!
@@MatttoMillion I see what you mean. I still think it's a natural evolution of the markets and digitization. Prop shops for retail (there's still a few dotted around London) use a similar process - they charge a 'desk fee' or course fees to join then put you on simulator until they feel you've earned the right to trade real capital.
The regulators care as much about people losing money to prop firms as they care about FX brokers offering 1000x leverage to allow retail to self-destruct. Retail is such a tiny part of the market they are barely worth regulating imo.
My pleasure! You make good content mate, keep it up.
but they aren't brokers just businesses so how could they be regulated?
'true' proprietary trading businesses are regulated, where due to these being a demo cap work around, it's opened the door for anyone to have access. Businesses are still regulated by country/continent laws and so if there are enough complaints being brought to the eyes of the consumer rights boards, they will look further into it and likely compare it to 'true' prop trading and then start placing additional steps in place. There was an FTMO competitor in Australia that got burnt last year and I believe they're still fighting a court case. I hope it doesn't happen this way but people who lose/get bitter, tend to throw their toys out the pram and that impacts the people with their head screwed on!
If offshore binary options can last this long and still be active specially when the FBI came in shut down alot of brokers who was scaming and not paying out...trust me prop firms not going nowhere there are plenty companies popping up every others week ...and even the regular forex brokers like kot4x who been out for yearss are now doing funding accounts following the same trend as others ...Soo I don't see it ending noooo time soon it's just going too get bigger!!! This just the beginning!!!
Yep - fair point!
I think it can be sustainable but it's going to go through phases where you have new companies pop up and then die out,I mean at the end of the day they are running a business and not a broker and if you are a trader associated with them you should look at it from an employee point of view, yes they give you an account but it's their fund at the end of the day, so if one runs out of business you move onto the next,you may loose the account but you won't loose the skill
Yep for sure! 'trading' is a 'trade' 😉 I like it
Interesting video, I have two comments
1) off the top of my head, there are firms based in Israel, UK, EU, Switzerland, US, Canada and Australia. The international community hasnt a good record on financial regulation agreements. If one area goes for it, another will welcome them with open arms. EG EU vs UK.
Look at how many brokers now have an arm based in the virgin isles and elsewhere.
2) The parent fund to Lux is already regulated by the Swiss, so theyre ahead of the curve.
Absolutely - on both points. I think it's the forward thinkers, as you say, who are laying the legal routes now, who aren't as 'famous' but ultimately, when the hammer comes down, they'll be the ones in prime spot to keep the space moving in a similar vein. Thanks for the comments too - diligent points, shared respectfully - appreciate it 🙏🏻🙏🏻
I could see different countries adopting different rules which in effect would bar some people from entry. Very likely they'll need to post some stats on pass rates and disclaimers as well.
the legit ones like ftmo will be her forever
They'll just move headquarters to different countries. There will always be certain countries that will accept them.
Yeah that's true - the Bahamas tend to provide some nice solace
🤣
@@MatttoMillion 🤣👌
I hope not!
Me too!
I think just like the ESMA regulation that was brought it to curb leverage available to retail traders in the Uk there will always be loopholes to exploit to get around regulation 😜
Yeah will be interesting see how it's classed in the future - especially within the UK!
One of the most interesting aspects of the human species is the ability to adapt and transform in the face of a change-event. This has happened for centuries. In the event of a regulatory clampdown of the industry, I believe Prop firms will adapt and evolve rather than folding as you are predicting. In addition, more technological advancements will make the industry a completely different landscape in the future than it is today. This is already playing out.
Meanwhile, Good analysis Matt, but you are leaning too much on the pessimistic scenario, ignoring the fact that the prop firms that have succeeded thus far have the financial power to endure even the stringent regulatory changes for the industry. #foodforthought
Great comment! No you're right - of the two I definitely side more with pessimism when it comes to that side of things! And like I say, I hope I'm wrong for sure! One thing you're spot on about, is institutions finding ways around! For me it comes down to motivation of the company. At the moment it's a relatively 'easy' route to market with very high margins. With all the white label products too, it's become a cash cow. So should they get stumped with further regulations and higher operating costs as a result etc. it may prompt a bit of a mass exodus from the market when too much 'effort' is required on them - though to your point, this should leave the 'true' businesses who are there for the long term and willing to accomodate international jurisdictions. Long may it continue!
@@MatttoMillion I see where you are coming from Matt. If viewed from that perspective I agree 100%.
Hey Matt. Interesting topic. If there will be more regulations in the future for this kind of business or not, I dont know. I hope not. But, right at this moment it is kind of illegal to give any investment advice without being licensed by FCA. As far as I know, any prop trader gives investment advice, isn't it? How can we deal with this in UK? What SIC code should I use for my company to trade with one of these prop firms? It seems like nobody knows. If you contact the prop firms they say you are a "portfolio manager" contractor (which is illegal unless regulated by FCA). How do we deal with this?
Matt wanted to ask you about backtesting for a day trader that takes his entries mostly in the 5 min timeframe, how much do you suggest to go back in historical data ( day's , month's) to start backtesting from there.?
Hey man, it's tricky with 5m, as there's a limit to the data. My advice is as far as possible! But trading view won't allow you much in the way of history at that range. You're best off investing in something like softfx to work at that level. But I'm not the best person to ask surrounding those time frames!
3-6 months depending on the numbers of trades and what you want to find and research. Now, Matt answer it's one of the best options.
Will smith giving you shade eyes in the background
I spend my life in shade - Will's giving me immunity 🤣🤣
Hi Matt, would you know if you can set up a company for your trading plus retail investments (rental income) combined? Or would you have to set up two companies?
Usually this would require two, as each LTD tends to require 'similar' purposes
How is the £1,000 to £1,000,000 target going?
Have you reached 6 digit figures?
Yes sir, will aim to do an update video in one of the upcoming ones 🙌🏻
Great video again Matt, my only comment I would like to leave here is assuming in 5 years things will change against prop firms and funded traders, my question is are we still gonna be able to trade on our private live acounts or been a day trader is not an option after 5 years if things do change?
No - that will always be there! And like I say, I hope I'm wrong!
Hey Matt
Could you by any chance recommend some good accountants/tax advisors as well?
Hey man, drop me an email and a quick down of your situation/what you're after and I can make an introduction
@@MatttoMillion sure will do. I had emailed you 1-2 weeks ago but will write more in detail
What your thoughts on Traders Central ? ( Honest thoughts)
Not there yet. FTMO and MFF are better, in that order
@@MatttoMillion will they really pay . Or are they gonna rug pull every one ? I am thinking of purchasing their challenge model 🤔 So confused
💪👌
👊🏻👊🏻🙏🏻
I cant pass a challenge so let me record a video saying it wont last!
Guilty 🙋 it's not just challenges though, I can't trade in general. I really envy people who can though. Maybe one day 💪🏻
@@MatttoMillion After posting a comment in your video, your boyfriend reached out to me, saying that you're a multimillionaire. Then I came back to check out the content of your videos (Yeah, I did not know who you were at the moment I commented, I was being a hater), and I realized that you do share good content in your videos. I want to apologize for my words!
@@MR-wk4po Big respect for commenting back man - appreciate it 🙏 I don't blame you anyway, 99% of the space is littered with nonsense. And LOL you gotta admit, the guy has some pretty wild shirts 😂 take it easy man - fingers crossed for a strong end to the month.
Matt am a hater and am in the comments so come let's throw hands🥊🥊🥊🥋
🤣 excellent - you'll all have to form an orderly queue! I am British after all!
@@MatttoMillion ohh Matt is ducking me
They will last as long as fiat currencies last!
Let's see hey!