The Prop Firm Scam

Prop trading is an incredibly useful tool, if you consider loosing money for a while a handy tool. Prop firms are incredibly smart with how they operate, because they know the mentality behind new traders, gamblers.

This character trait that almost every trader holds is extorted, beginning with the prop firms eval fees. The business model they have operates off a trader losing, this means that on a purely financial level, for them to be constantly in profit, their business has to do everything it can to see the trader lose. 

This is an incredibly opinion based outlook, but if you were to ask me, to say its a scam all in would be a lie. If it was truly a scam, there would really be no way to make any sort of income. In prop trading, if your good at what you do, sometimes you could be payed out. 

For the beginners being almost automatically filtered there though, this is a different story. Since it takes a long level of experience to be able to properly trade under eval conditions, and then carry that same discipline over to funded trading.

This is arguably the part of prop firm trading I hate the most, and truly believe strives for scamming people. The affiliate promotion. Yes, I'm talking about your favorite traders that post links and almost direct you in the prop direction from the minute you've dipped your toes in the waters.

This is definitely where the scam gets intense, since the motivation isn't for YOU to be making money, its for you to be completely losing, as now a two tier system is created.

Depending on the size of the creator, they will be offered deals for percentages of fees, which means you losing, and being encouraged to lose, will actually benefit both the prop firms and the traders directing you there.

That's where the scam gets huge, because you are thinking that the prop firms are legit, because your favorite creator told you so right? WRONG, they benefit from pushing you in that direction just as much as the prop firms.

I truly believe that were now entering a time of extreme focus on transparency in business. The judgement day is coming for a lot of prop firms that have ran scams on traders for a long time, as you can see, there are a lot of people beginning to expose them. 

Even with all that said, I do think what will blossom is an era of prop firms that have remained through their authenticity. Since even for all the bad, there is some good in the ones that focus slightly more on traders.

With it all said and done, The Prop Firm Scam is a complex one. Is it a modern day ponzi? A meme rug? who knows, its all down to your opinion, and also your skill level within your trading.