Exclusive: Havoc in Prop Trading Sector as Funding Pips Stops Services (2024)

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Exclusive: Havoc in Prop Trading Sector as Funding Pips Stops Services? ›

Exclusive: Havoc in Prop Trading Sector as Funding Pips Stops Services. The prop trading firm closed trading and stopped services for all traders. Blackbull Markets terminated its agreement with the prop trading firm as MetaQuotes forced the broker.

Prop trading firms have been shutting down or suspending their services, particularly to U.S.-based clients, because of a crackdown from MetaQuotes, the company behind the popular MetaTrader trading platforms.

The disruption of services occurred after Funding Pips' only brokerage partner, Blackbull Markets, terminated its partnership. A Blackbull representative confirmed that MetaQuotes, forced the broker to stop providing services to Funding Pips.

Following the recent service shutdowns experienced by Dubai based prop trading outfit Funded Engineer, and Hungary based True Forex Funds, another Dubai based firm called Funding Pips has also been effectively shut down.

Profits from trades are generally divided between the firm and the prop trader; however, the risk distribution is asymmetric. This means that in the event of a loss, the trader bears 100% of the losses, while they don't receive 100% of the profits.

The Volcker Rule is one of the more controversial pieces of legislation to emerge from the financial crisis. Attached to the Dodd-Frank Act, the rule was intended to limit banks' ability to make speculative investments that do not benefit their customers.

Actually, one could compare the 95% of prop companies to a pyramid scheme. They either set you up to fail or compensate you with other traders' losses.

cTrader is among the platforms launched by Funding Pips to address the evolving regulatory landscape. Funding Pips introduced the cTrader platform to respond to regulatory scrutiny affecting US traders.

However, Any Trading activities that are used to take advantage of trading platform inefficiencies (Gap trading, high frequency trading, server spamming, latency arbitrage, toxic trading flow, hedging, long short arbitrage, reverse arbitrage, tick scalping, server execution, opposite account trading) are all prohibited ...

Subsequently, Funding Pips' CEO, Khaled Ayesh, confirmed that the firm had completely migrated the existing servers and switched the service provider to Match-Trade Technologies, the operator of the Match-Trader platform.

What countries are banned from funding Pips? ›

Although the Funding Pips' CEO said that it has active US clients, its website now shows the US, the UAE, and Vietnam as three restricted countries.

#1 – Funder Trading

Funder Trading stands first in our list of the top prop trading firms in 2024 due to multiple reasons but notably it is the only prop trading firm that offers options funding and includes coaching for every trader signed up.

The implication is clear: MetaQuotes is striving to become a more regulated platform, favoring partnerships with thoroughly regulated trading platforms.

The salary of a prop trader can vary greatly depending on several factors such as experience, performance, and the size of the firm. On average, a junior prop trader can expect to earn anywhere between $50,000 to $100,000 per year, while a senior trader can make upwards of $500,000 annually.

Prop traders can operate under their own rules-based system using the fund's capital, not money from outside investors. Prop traders also get to keep a large portion of their profits, which brings up the next primary perk: compensation. Prop traders often get a base salary, a cut of the profits and performance bonuses.

People keep wondering how do prop firms make money, since Profit generation is a prop firm sole purpose, just like it is for any other business, these businesses make money through a mix of profit-sharing plans, membership fees, and challenge fees.

Today, MetaQuotes decided to abruptly halt services, due to… Blackbull, like a few other brokerages, took advantage of their MetaTrader license and grey-labeled them to prop trading companies. As confirmed by Lal, the broker only allowed Funding Pips to operate on its “demo servers via MT5.”

In summary, the online prop firm industry will be around for many decades to come. It's not going anywhere! However, there will no doubt be strong regulation coming in the following years, which is hugely positive. This will weed out all the prop firms that are scamming traders and should not be operating.

Historically, retail prop firm challenges have been designed to set traders up to fail. They're given harsh targets, limited time, no support, and huge leverage – a perfect storm! It's not surprising that 95% of traders fail their challenges!

There is nothing inherently scammy about the business model of prop firms. But how do they make money then? For starters, prop firms, of course, do not give money to just anyone who asks. Typically, they have a multi-stage evaluation process to make sure the traders they employ know what they are doing.