Opportunists have developed several strategies to try and beat the system in order to profit on the tremendous growth of the online prop firm and funded trading account industry over the past few years. An expansion of businesses and people providing “prop firm passing services” has resulted from this exploitation and the frustration of many new traders. In essence, these services are created to handle prop firm difficulties on the trader’s behalf before giving the client an account that is financed right out of the box. Can these services possibly be this good? This article will cover all the information you want if you’re thinking of hiring a prop firm passing service to open a funded trading account on your behalf.
Prop Firm Challenge Passing Services
If you participate in the online trading community, you may have observed the recent increase in prop trading firms as well as the current increase in businesses that will take care of your prop firm challenges for you. To measure traders’ profitability, the vast majority of prop businesses in the sector will essentially ask them to succeed in one or both tests. The normal duration of this is 30 to 60 days, with each challenge requiring traders to produce an average profit of 8 to 10%. 90% of traders, on average, won’t achieve the necessary profit objectives without going over the drawdown and maximum loss restrictions.
There are prop firm passing services that are claiming to pass your challenge for you with a money-back guarantee. The plan is that you may pay a straightforward fee for stage 1 and an extra fee for stage 2. It’s as simple as connecting your account to their copy trading system after payment and letting it run. Although this might sound like a wonderful idea for those of you who don’t have the skills or time to pass a challenge yourself, it is not the best idea for numerous reasons.
Prop Firm Passing Service Disadvantages
If you are thinking about using a prop firm passing service to pass you funded trader challenge, there are some important things that you need to be aware of. Not only can you end up out of pocket, but you could also get banned from a prop trading firm and won’t be able to become a better trader in the process.
Against prop firm rules
The terms of service for the prop business you’re working with are most likely broken if you use a third party or, in some situations, automated trading. From their perspective, if you have been dishonest and breached their rules, they are unlikely to truly respect your compensation. If you do your research, you will see multiple cases where individuals received funded trading accounts, but rewards were rejected due to this. Some prop firms even specify in their terms that you cannot use a prop firm passing service.
Bo guarantee to pass the challenge
Simply put, there is no assurance that the company will be able to open an account for you with funds. Even successful traders who manage professional funds occasionally have terrible months, quarters, etc. and are unable to produce the evidence required to pass a challenge or verification. In light of this, there is a very little probability that a business appearing out of nowhere with a fictitious location and phone number possesses the necessary credentials to successfully complete a funded account challenge. Also, businesses who claim a “guarantee” should raise a big red flag because nothing is guaranteed in such a volatile environment. Let’s assume that the business is unable to help you with the difficulty. You gave the prop business $100 and the dubious company another $100. You are now $200 in debt and have nothing to show for it. You wouldn’t put your real trading account in the hands of a total stranger, would you?
The refund might not be granted
The prospect of a refund seems to have a strong hold on many inexperienced traders. First off, there is a very slim likelihood that you will actually receive a refund from these businesses. These are fully anonymous businesses that appear out of nowhere, with fictitious locations and phone numbers, and have no owners to be seen. Several businesses will encourage you to pay with cryptocurrency when purchasing challenge passes, thus diminishing your already slim chances of ever receiving a refund. You’ll see in the Terms and Conditions that they would never return the value of the prop firm account, even if you were to receive a reimbursement after the company uses up your funded account in 3 days. You will thus still have lost the money you invested on joining up with the prop business even if they do repay you.
You are not becoming a better trader
If you do pass a prop firm challenge using a prop firm passing service, you might be very happy at first. However, when the reality dawns on you that you will need to be manually trading by yourself, you might realise that you cannot achieve the objectives and stick to the rules of the prop firm. Without any trading experience yourself, you are probably going to lose the funded account sooner rather than later. You cannot keep on paying someone else to trade for you, they might be using dangerous strategies and poor money management. Not to mention, if they were to disappear then you would need to start from scratch.
How to Pass A Prop Firm Challenge?
If you are worried about the prospect of needing to pass a funded challenge by yourself and considering a prop firm passing service, there are some other things you can try before taking extreme measures.
Nothing can beat learning how to trade by yourself through trial and error. You can always practice your trading strategies on a demo trading account until you build enough confidence and consistently make a profit. This way, you rely on nobody but yourself and can learn from your mistakes, becoming a better trader in the process. You won’t have anyone to blame for your mistakes and can develop a suitable trading strategy according to your own style.
Use a good prop firm
The best prop trading firms will provide you with all the tools and educational resources that you need to succeed. They should give you free access to trading guides, tutorial videos, strategies and one on one mentorship from experienced traders. This can help you to improve your trading skills and knowledge of the financial markets. That way, you can organically become a professional trader and pass prop firm challenges by yourself.
You really should think twice if you are considering paying a prop firm passing service to get a funded account. There are numerous reasons this is a bad idea, primarily because it goes against the terms and conditions of most proprietary trading firms. You are also selling yourself short by not developing your own trading strategies and becoming a better trader. This is vitally important if you want to make a living as a prop trader. Granted, there are legit prop firm passing services that will be able to pass challenges, but they might use all sorts of underhanded tactics to do so. Just go careful and make sure you do your own research before making any hasty decisions.