"It's like déjà vu all over again"

"It's like déjà vu all over again", so said Yogi Berra and he was right.

A lot has changed or rather evolved since 1979 when I joined CompuTrac, the then leading futures trading group led by Timothy Slater. The number of futures traders in the world was minute compared to the millions we have today. My co-members were men like George Lane, Marc Chaikin, Walt Bressert and many of the other names you see today on names of of indicators in most trading platforms. CompuTrac’d Prof. Jim Schmit programmed what was the first day trading charting program. We used to run forests of Apple II computers to churn out our charts.

Today, I am told, we have a million users of Ninjatrader and some 10 million using Tradingview with millions more using a countless number of other charting and trading platforms. It seems that the big explosion cam with the so called “prop firms”, a great misnomer as far as I am concerned because they are anything but prop. It all started with Top Step (another misnomer as the top step in a pit was where the brokers stood so they could hand signal orders with their booths - locals were deep in the pit looking up at the brokers). Then Leeloo entered the game. I thought all the prop firms were quite predatory as they are even more now. But on the other hand, you can de risk yourself and get to CP sooner using these companies as long as they pay as promised.

Its interesting that the explosion in these “prop firms” was triggered by the heavy handed behavior of Leeloo. Darrel Martin was a Leeloo customer who had his profits capped after he made $300,000 trading Leeloo evals. He got mad and started Apex Trader Funding and began under cutting the eval prices the others were charging and the rest is history.

Trading “prop firm” eval accounts needs different techniques to trading your own money. Your focus needs to balance the prop firm metrics of draw down, renewal date and consistency within the other constraints (rules) that are also placed on you. Once you pass and have a sim paying account you need to fit a different set of constraints.

My take on how to trade once you have paying sim accounts is to get as many of them as you can and restrict your trades to very high win rate setups that only go for relatively small profits per trade. Trade the accounts in groups so that one catastrophe only impacts no more than, say, 25% of your accounts. There surely will be “catastrophes” whether due to technology or black swans or negligence so a plan is important.