Welcome, traders and industry enthusiasts. Proprietary trading firms, or “prop firms,” are widely recognized for the opportunities they provide—lucrative rewards, promotional discounts, and endorsements from prominent figures in the trading community.
This has cultivated a dedicated, almost tribal following, with traders passionately aligning themselves with specific firms. However, beneath this vibrant surface lies a complex network of operational challenges that prop firms navigate daily.
In this discussion, we offer an authoritative yet approachable look at these dynamics, shedding light on the delicate balance prop firms strike to support traders while protecting their platforms.
Gamification and Integrity Challenges in Prop Firms: A Deeper Look
The Evolution of Perception
Years ago, as prop firms established their place in the trading ecosystem, the concept of gamification sparked significant debate. Some firms even considered regulation by gaming authorities—akin to casinos or online poker platforms—reflecting a shift in perception.
No longer viewed solely as hubs for skilled traders, prop firms began attracting individuals focused on exploiting their systems, setting the stage for sophisticated manipulative strategies.
Strategies Exploiting the System
A common tactic involves traders rapidly cycling through accounts to lock in net profits, often using oversized positions. This is especially prevalent among traders with large social media followings, who amplify their visibility through influence. Meanwhile, organized groups have exploited Know Your Customer (KYC) fraud to create multiple accounts, enhancing their ability to manipulate outcomes.
Influencers, too, have leveraged prop firms for personal gain, using hedging strategies with large lot sizes to secure payout certificates. These certificates are often showcased to promote unrelated services rather than to demonstrate authentic trading skill. While prop firms recognize these practices, addressing them publicly can provoke backlash, creating a complex dilemma.
The Complexity of Rule-Setting
When traders amass large payouts alongside significant losses, the knee-jerk response is to call for tighter rules. Yet, this oversimplifies a nuanced challenge. Prop firms must find a balance: overly lenient conditions invite abuse, while excessively strict rules may alienate genuine traders. The ideal framework fosters legitimate talent while deterring exploitation.
Sophisticated Cheating Tactics
Exploitation methods have grown increasingly advanced. For example, groups in Malaysia have been known to operate multiple virtual machines, managing numerous accounts simultaneously and employing martingale strategies with substantial capital. These efforts ensure a few accounts succeed while others absorb losses. Similarly, a Bulgarian group has perfected triangular arbitrage across multiple prop firms, exploiting predictable patterns to profit at one firm while failing at another. Detecting and countering such tactics is no small feat.
When firms attempt to address these issues, they often face public criticism, with accusations of unfairly targeting honest traders. This skepticism, rooted in the industry’s past struggles, highlights a tough reality: no matter the measures taken, negative perceptions and reviews persist, complicating efforts to maintain fairness and transparency.
The Limitations of A-Booking and B-Booking
One suggested solution is to “A-book” these traders—passing their trades directly to the market. However, this is impractical, as many lack consistent profitability, relying on luck rather than skill. A-booking such traders would expose firms to unnecessary risk without reliable returns.
The ATFunded Plus Program
At ATFunded, we have developed the Plus Program to identify and support genuine, skilled traders. This program allows us to leverage the talents of these traders to not only scale their own success but also contribute to the growth of our firm. Traders in the Plus Program can be confident in their ability to continue benefiting from our platform, as it provides a steady course for their trading journey.
While the Plus Program is not foolproof, it serves as an effective filter that provides us with significant data to understand whether a trader is genuine. Our goal, mantra, and motto at ATFunded is to have traders in the Plus Program, as it represents our alpha.
What is ATFunded Doing?
At ATFunded, we take a proactive and resolute stance to uphold the integrity of our platform. We have developed an internal proprietary set of tools to identify and address the “gamification guys”—those who seek to exploit the system. We do not hesitate to remove users who undermine the trading environment, prioritizing a stable and dependable prop firm experience for aspiring traders. Our aim is not to maximize sales but to cultivate the most successful traders on our Plus program.
In addition to our proprietary systems, we have contracted a team of professionals from the brokerage and prop trading industries. These experts bring unique algorithms and specialized skills to detect even the most sophisticated cheating groups. This collaboration ensures we remain ahead of evolving tactics, safeguarding a fair and transparent trading space.
To exploitative traders, our message is simple: If you are part of a group trying to game the system, do not purchase with us. Our commitment lies with genuine traders, and we are steadfast in protecting the integrity of our platform.
A Focus on Sustainable Profitability
The goal isn’t just to pinpoint profitable traders but to evaluate how that profit is generated. This discerning approach allows prop firms to sustain their business models while fostering an environment where skilled traders can thrive.
The Takeaway
The prop firm industry is a dynamic and intricate space, tasked with balancing the onboarding of new traders with the preservation of integrity and long-term sustainability. By understanding the challenges—from gamification and advanced cheating to the intricacies of rule enforcement—traders can navigate this landscape with greater insight.
At ATFunded, we are dedicated to setting a standard, prioritizing trader success and platform integrity above all. As the industry continues to evolve, staying informed and discerning will be key to thriving. We invite you to stay engaged, think critically, and approach your trading journey with wisdom.
