Legitimate Proprietary Trading Firms, According to Peter Brandt
Veteran trader Peter Brandt is warning fellow traders about scammers who pose as legitimate proprietary trading platforms. Brandt outlined the characteristics of what he considers to be authentic prop firms.
Here is how legitimate “we-fund-you” prop firms operate
-No fees charged to traders – EVER
-Actual real $ funding
-Set drawdown from initial funding level
-No restrictions on trading style or markets
Anything different than this is a scam IMO— Peter Brandt (@PeterLBrandt) December 29, 2023
According to Brandt, legitimate prop firms do not charge fees to traders and provide actual real dollar funding. They also have a set drawdown from the initial funding level and do not impose restrictions on trading style or markets. Brandt declares any prop firm that doesn’t adhere to these conditions as a scam.
Understanding Proprietary Trading
Proprietary trading involves a financial institution using its own capital for financial transactions instead of clients’ funds. This is typically done when institutions want to directly invest their funds. Legitimate prop firms allow investors to keep all the profits generated by proprietary trades, maximizing their earnings.
Brandt advises traders to thoroughly research prop trading platforms to ensure their legitimacy. He emphasizes the importance of finding firms that don’t charge fees, have real funding, and allow flexibility in trading style and markets. According to Brandt, anything that deviates from these standards should be considered a scam.
While many of Brandt’s followers appreciated his distinction between legitimate and illegitimate prop trading firms, some disagreed. One user challenged Brandt’s claim of no fees, expressing that fees are a common practice even among traditional prop firms. Another user acknowledged that although they may not agree with Brandt’s business model, as long as successful traders receive payouts, they don’t see the issue.
Hot Take: Brandt Warns Traders to Beware of Scam Prop Trading Firms
Peter Brandt, a veteran trader, has cautioned traders to be cautious of prop trading firms that present themselves as legitimate but do not adhere to his criteria for legitimacy. According to Brandt, legitimate proprietary trading firms do not charge fees, provide actual funding, have set drawdowns, and do not impose trading restrictions. Brandt categorizes anything outside of these parameters as scams. This warning has sparked mixed reactions among traders, with some questioning the feasibility of zero fees and others appreciating Brandt for distinguishing between genuine and fraudulent prop trading firms.
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