Turn cTrader into your prop firm’s growth engine
Recently we have started doing more review content on TradeInformer and it is truly some of the driest work in the world. The upside is that you do start to pick up on small nuances and differences between firms, even if we are—by and large—dealing with a highly commoditised product.
Something that stood out was some changes to FTMO’s legal language. Some of you may see me as a truculent character—an unfair characterisation—but there is something fun about the small legal wranglings used to package specific products.
The basic point is that FTMO seems to have moved away from using language about ‘funded accounts’ and profit shares. It’s like something happened where they have been told to constantly emphasise the fact that you are not trading with real money and that there isn’t a direct connection between your trading activity and any ‘profits’ you generate with them.
More specifically, the company has shifted to saying that trading payouts are ‘rewards’. These ‘rewards’ are for the trading data you create with them, not because of your profitability. Moreover, it is emphasised repeatedly that you are never—at any point—trading real money with them.
For example, the company’s terms and conditions, which were updated last month, now note (bold emphasis is mine):
If you successfully complete the Evaluation Process… you gain access to the FTMO Account and may receive a reward for the data you generate in your FTMO Account.
The language about ‘rewards’ is mirrored on the company’s homepage:
It is also used frequently in the FAQ section. For example:
If a trader is able to trade fictitious capital in a profitable manner, demonstrating their trading skills and the value of the data generated in the process, they become eligible to receive a reward.
This is different from the past. For example, here is FTMO’s homepage from 2020:
Even in 2024, the company was still using language that suggested you were getting a real funded account and receiving a share of profits generated from that trading activity. Why make this change now?
We can’t know for sure but my assumption is it’s tied to the acquisition of OANDA. No prop firm will have been subject to as much legal and compliance-based scrutiny as FTMO. If they have made changes, it is likely on the back of ensuring they can continue to operate without breaching any regulations, particularly those that could impact their highly-regulated brokerage business.
However, the switch is an interesting one as I think it fundamentally changes the value proposition of prop. The general concept for prop firms is that you get a funded account and are in some way ‘really’ trading the market. Profits you generate are a split of this real activity. This is what people like.
FTMO has moved to saying that everything you do is simulated and that your trading data may or may not be valuable. You are not being paid because you are profitable per se, you are being paid because the demo trading you do is creating data that’s valuable for the company. This claim is buttressed—in FTMO’s case—by the fact they have a real trading division, called Quantlane.
Obviously in reality the set up is exactly the same as other prop firms. But as I said, we are dealing with a highly commoditised product, where marketing matters. People like the idea of getting a funded account. If you start saying they are just getting money for valuable data, will it be as effective?
The flipside of this is that it does shield you from more regulatory scrutiny. You could also change the rules that govern the firm more easily. For example, a fixed payout on a ‘funded account’ could look a bit like a binary option to a regulator. If you talk about payouts reflecting the value of trading data created, it changes things.
Given that many firms do seem set to start capping payouts, maybe we’ll see this sort of language becoming more popular. FTMO is generally seen as the industry leader, so where they go, others could easily follow.
