Do prop firms actually copy your trades?

I have been hearing that prop firms generate income by copying trades of their customers but how true is this?

S
@sandy20 - 2 months ago

I don't think prop firms copy your trades, I mean why would they, when they generate so much income from selling challenges? Copying your trades involves a significant investment in technology and exposure to regulatory sanctions so I bet they just avoid doing that.

Prop firms do not copy your trades just the same way these prop firms do not allow you to use copy trading. The prop firm business model relies on the 95% of traders that will buy & fail the challenge. Prop firms pay the 5% winning traders with the income gotten from the 95% who purchased and failed a challenge. They only say they copy your trades to make you feel good and to make it seem like they don't rely on income earned from failed traders.

There is no evidence to support the claim made by some prop firms about copying trades of those who buy their challenges. This is why I hope regulation of prop firms will come fast so that some of these claims can be subject to regulatory scrutiny. Some people will say since the prop firms do a profit split it means they copy your trades, but there is no evidence to substantiate this claim. It could be that they prop firms make the claim of copying your trades to justify why they do a profit split with you.