Are the prop firms scamming you?

Starting off simple, a prop firms is a business model based around giving traders the opportunity to trade with higher capital for a fee. Which when used, allows a trader to trade at a higher level and lily pad up with capital they may not have initially had. Sounds good, right?

Well, that is what we will investigate, because i find that in the argument of prop firms you have people on both sides that are incredibly bias. 

There are definitely many positives to trading via prop firms, the first being the simple fact that you get access to higher levels of capital that you may not have initially had. This is true no matter how anyone else phrases it, the difference is in the rules.

Another positive with prop firms is you get to trade with a lower risk, as the eval fee is much lower than if you were to trade live, meaning you minimize the risk. This also comes with its own set of problems but we will get to that.

Prop firms actual purpose get distorted by one thing, inexperienced traders misunderstanding what their actual use is, and why the gate is there to stop them. This may lead back to a get rich quick fantasy originating from courses, but the mentality of thinking your owed a spot in the funded stages is the thing that may be stopping you.

Don't misunderstand me, I am not fully pro prop firms, and I do believe that with all the positives there are definitely a set of rules in place to make them more difficult/almost impossible to achieve to some people.

The main part I see to be a scam, especially in a world of financial trading, is the fact they deliberately see the most benefit in you failing the challenges. Meaning they, as a business model, need to encourage you to fail in the best way they can. I never point fingers or name names, but there are definitely a few businesses that are far more focused on this than actual funded trades.

Secondly, the negative aspect so to say is the tightness of the rules. Beginner/intermediate/pro, the rules are tight no matter who you are, since they win when you lose. While tight, the insinuation that it is as far as "impossible" to achieve is completely inaccurate. I think you have to be willing to lose in order to eventually win.

While I have defended the prop firms previously, I feel like they definitely hold a certain level of "hiding in the shadows" if you will. Especially in a model like this, no matter how transparent you can be, your model still wins mostly when the traders lose. Meaning its like a gambling website. 

Well, IMO, I believe props definitely could readjust the model to take a higher cut from the end profits if a trader gets funded, and hitch less of their business on solely fees. 

Regardless though, in this specific scenario, it also not a blameless "scam", as the people who lose majority of the time are usually the beginner traders, who are opening accounts with the hope of hitting a gambling home run. So in that case, I do believe that the second part of the problem is the skill level of traders turning up. No matter how transparent or how little money they take, the props will always win if the traders using them cant properly trade.

I do agree with part of the argument, and can certainly say that this does not apply to ALL Prop Firms. 

So are the prop firms scamming you? It depends how you look at it in my opinion.