Pratique du Shadowing: Trading Strategist: The Prop Firm Edge Isn't Your Strategy, It's How You Manage The Accounts! - Apprendre l'anglais à l'oral avec la vidéo

Now I want to talk about the profession of trading, finding alpha, discipline, execution, XYZ.

And then also the other side is making money.

Now, obviously, we assume it's all the same thing.

But off camera, we were kind of discussing specifically with the online prop model, which is like a casino.

The house always wins.

The odds are skewed kind of against you.

Plus, there's a bit of a conflict of interest in there.

And then also, there's also some gamification elements

because you have asymmetric game potentially because your challenge fee might be 100 but your payout could be $2,000.

So now you don't need an edge.

You just need a positive expectancy on the game.

So how do you navigate that?

Should you just take your edge that you have

and play it on the prop firm or should you modify it knowing

that it's a game and then kind of hijack the process?

All above.

But before this, I will say this.

I'm a huge prop firm fan, right?

Regardless of how rigged the game is.

for one very, very simple reason.

If you're new to the markets, or even if you're not good at the markets, if you've been in the markets for a very long time, but just not good, have not found any success with real money,

the ability to trade real markets,

real prices, real execution, and refine your skills for the cost of $100

and a potential maybe of $1,000 payoff somewhere down the road is so much better than burning $1,000 a week, $1,000 a week.

Unless you were a complete degenerate, you couldn't lose more money in prop front fees than you

would in two weeks' worth of bad trading on your own account, which I've done a million times.

So from that perspective, it's an incredible educational tool.

People, like you said, they take it as just a lottery ticket.

But if you stop taking it as a lottery ticket and actually think about it as an entrance to school, as a really cheap tuition, it's really cheap tuition, boy, could you learn a lot.

You could learn so much, both about your personality, about the markets, about strategies, about execution, all for very,

very little, with some potential eventually down the road for payoffs.

So I'm a huge prop firm fan from that.

But having said this, yes, prop firms all create.

Look, people understand they act like prop firms owe them money.

The whole model of the prop firm is an insurance company, right?

Insurance companies are not in the business of paying for your expenses.

They're in the business of covering whatever risk they want, but they're in the business of making money, which means they're going to capitate risk.

The very essence of it means that that's why your life insurance is capitated at X amount of money.

Even your health insurance is often capitated at X amount of money.

Nobody is going to give you unlimited amount of money

because you happen to be an amazingly lucky prop firm trader like you're entitled to all that fake SIM money.

No. So I respect their models.

The key thing is, as long as their models are just fair and reasonable.

And I think the thing is competition has forced most all of them, I think, to kind of create a relatively reasonable model at this point.

Yeah, I think just looking at it from a place of in a healthy competitive environment, the consumer wins because prices will be fair and conditions will be fair.

And especially when you look at prop firms, their goal is to make money.

That's the goal.

Their goal is not to scam.

So if their goal is to make money, then in their best interest is to serve for as long as possible.

But then there is the insurance policy side of like, they've also got to cover their costs and liabilities.

So it's that delicate dance, which is why we do see big players come and go.

But the area that I've found myself these days is, I just run simulations, like you were saying, with AI.

And I was running simulations with the same edge.

Or in fact, I even ran another simulation, which was good edge, average edge, terrible edge.

And I actually ran 12 equity curve types across 100 trades.

And one of them was like a slow climber, slowly makes profit.

Another one is like boom and bust and boom and bust, but ends positive.

Then you had the slow bleeder.

Then you had the crash and burn.

Two different equity curves, all totally different.

And obviously, you'd expect the guy that made 30% would make 30%.

The guy that lost 30, lost 30.

But if you cleverly orchestrate the accounts, all accounts made money.

All accounts made payouts.

And most importantly, made more payouts than the amount they spent on the evaluation fees.

So that's what I realized.

It's a game.

you're not incentivized to have the best edge because even on another model that I ran, the guy with the best expectancy, the best equity curve, didn't make the most money.

The one that was making the most money was someone who had a high trade frequency and locked in payouts quick.

That became the model that you incentivized for.

So I'm wondering what your thoughts is because I know you're deep into AI also.

Oh, no, absolutely, because think what you're doing.

You're basically modeling variance, right?

And over a short term, a lot of people can get lucky, right?

That's the whole thing.

How do you tell the difference between luck and skill?

time, really.

That's like time.

And the thing is, over a short period of time, a lot of people, you know, just got lucky.

And that's the thing with the guy who I think was the head designer of TradingView said something really brilliant.

I totally agree.

He said that basically when you look at the proper model, it is a contest.

That's what it is.

You know, they're running contests, right?

So if you think about it, you're entering into multiple contests with small variation on the rules

and you're just trying to win as many contests as possible right

and that doesn't mean that you know

that the strategy you're using is actually going to be the one

that survives or that is a viable trading strategy over a long period of time it's just simply

that strategy is optimal for that particular contest at this particular time you know

if you have a strategy

that like bets big on market let's say you you let's

just a stupid strategy i'm going to buy the first candle of the S&P for five days straight, right?

Maximum risk, right?

And that five days, the market was just soaring.

Boom, boom, boom.

You are funded, payout, collected, right?

Just that's it.

You hit that lottery ticket.

100

The thing is, and like you said, the great thing about prop firms, and a lot of people do game that, and that I actually, you know,

101

you can yell at the prop firms for sort of creating unfair rules, but you also, I think,

102

a lot of people take advantage of prop firms because they'll buy thousands of these contest tickets,

103

and they will just gamify that and see if they can get paid out more than what they pay in.

104

I think, I forget what it's called.

105

It's called prompt firm harvesting, which is also, if you think about it, that's as scammy as a prompt firm scamming you

106

because it's hurting everybody else who's trying to sort of honestly trying to trade the market

107

because the prompt firms are then forced to pay out a lot of money to people who have no skill.

108

They just...

109

But also introduce rules to stop that, which then harms the innocent participants.

110

They have all introduced, I think the most interesting thing in the prompt firm space

111

that has really put the brakes on all that nonsense is the consistency rule of making $150 a day, which seems very reasonable.

112

But actually, if you're gambling, it's much harder to do that.

113

And that's my whole essence of what we try to do is actually do make $150 a day.

114

If you can master that skill, you will master trading for life.

115

That's the skill.

116

The whole idea is when you're scalping, what you're mastering is the ability to trade for income, not for gain, but for income.

117

That means the ability to trade small but consistent moves despite all the variance of the market, surviving the variance of the market.

118

Is there also, I'm thinking of a sentence along the lines of two traders can have the same trades, same edge, but one can make a lot of money, one can lose money, all down to the trade management.

119

Basically how you risk, when you risk.

120

For example, if you risk up on a losing trade

121

and you're bad luck and then you risk down on a winning trade, obviously that's bad fortune.

122

But just kind of putting the mechanics of risk management and trade management around the profit arena, is there a way to maximize your equity,

123

maximize your gains simply through clever ways of approaching trade management and risk management?

124

So always coming back from my perspective, I will tell you there's ways to minimize your blow up by using trade management, right?

125

Yes, there's ways to maximize your thing just for something getting large, right? large,

126

the best way to kind of make profits is you're going through a trade, you're ahead on the trade, you add to the trade, and you keep adding until,

127

as long as it doesn't slip against you.

128

Now, that's like a one out of, you know, one of the prop firm founders who I'm close with said to me,

129

I have no problem taking a trade a hundred times a day

130

and just stopping myself at break even a hundred times a day.

131

Now, I would go nuts.

132

I would go nuts if I did.

133

But could you take 100 break evens, right, a day.

134

I get the logic, but hard in reality.

135

But yeah, there's no cost of break evens.

136

But this is a guy who made seven figures because he has the discipline to do that.

137

So that's like optimal.

138

But what I would say is, the

139

um how do you minimize you know blowing up

140

and the way you minimize especially in the prop space is

141

you trade lots of different accounts you know like i will i will trade one of the things

142

that we do here's a trick couple of tricks

143

that we do in my room i will trade one account

144

up to a hundred dollars like i was let's say we started zero today

145

or like you know we'll say it was the kind of 200 one of them right to 300

146

and then we move on to the next account move on to the next account And what that does is it actually, you know, the equity rises all across your portfolio.

147

But what happens is you don't get stuck.

148

Typically what happens is, you know, if you get stuck in one account and the market just doesn't, you know, cooperate.

149

Now the account, very often people will take an account up 1,000 in the morning

150

and then they're down 2,000 in the afternoon.

151

How did that happen?

152

That happened because you stayed in that same stupid account.

153

If you just simply moved on to the next account, you locked 1,000 in.

154

You would have yeah, you would have lost it in the other account who cares there's you know

155

Prop form accounts are cheap, you know, that's the that's that's the great advantage of prop firms versus real money is

156

that Prop form accounts are cheap relative to real accounts

157

So losing one account out of ten to bad market variance is fine.

158

That's excusable What's inexcusable is just constantly losing every one of

159

those accounts What I found again This is all thanks to AI

160

and maybe in my particular equity curve in my case

161

but I found the optimal way to do it was run an account for four weeks on one week off

162

but if you cross three percent only three percent in profit turn the account offline into the next online period

163

and when I was floating the same I could go through

164

that scenario I was able to squeeze out 30 percent more profits

165

so it's just crazy to me that same efforts same money

166

and the same everything it's just

167

when I decided to lock in payouts I went to how long to keep an out account offline

168

and how long to keep it online

169

because then after a winning period naturally losing period comes but

170

if your account is offline

171

and you put it on another one this account is preserved

172

this account is going trash bin it it cost me 100 bucks

173

and then you preserve this one locked in the payout this is paid for the loss

174

and it just becomes right clever floating accounts mechanics why is it hard for us to do

175

because we get so emotionally invested into

176

that i gotta win this one account like you know we get emotionally invested

177

because it's uh what is it i forgot the uh the uh psychological term it's like sunk cost fallacy yes

178

that we just get completely invested that we I got a win

179

or you know I got to come back from you know

180

from this losing it's very hard to let go really hard to let go

181

but that's the way to do it you're right and what does

182

that basically talk to it talks to the idea

183

that there is no strategy that's really giving you the edge

184

the edge is in you managing all of these different accounts

185

it amplifies it even to the point where a break-even strategy a your break even expectancy would generate payouts.

186

Now when you just think about that, it's like, man, I don't need to be a profitable trader to make payouts.

187

No. And there is a pocket of opportunity, and then you've got to be smart, what do you do here?

188

Take the payouts, reinvest it until you squeeze enough juice, and then go to Life Capital and figure out an edge for longevity.

189

You've got to be a good trade manager, not a good trader, right?

190

And that's the hardest part.

Qu'est-ce que la technique du Shadowing ?

Le Shadowing est une technique d'apprentissage des langues fondée sur la science, développée à l'origine pour la formation des interprètes professionnels. Le principe est simple mais puissant : vous écoutez de l'anglais natif et le répétez immédiatement à voix haute — comme une ombre suivant le locuteur avec un décalage de 1 à 2 secondes. Les recherches montrent une amélioration significative de la précision de la prononciation, de l'intonation, du rythme, des liaisons, de la compréhension orale et de la fluidité.

Pratique du Shadowing: Trading Strategist: The Prop Firm Edge Isn't Your Strategy, It's How You Manage The Accounts! - Apprendre l'anglais à l'oral avec la vidéo

À propos de cette leçon

Qu'est-ce que la technique du Shadowing ?