is prop firm profit split a scam?
Profit splits are just a way to reduce the amount the prop firm would have paid you. This is why these prop firms be declaring huge annual profits.
I mean come to think of it, you are not trading real money, the prop firm only sells you a demo account. You trade on the demo account with simulated capital and manage to win against all the odds and they now reduce your winnings in the name of profit split?
If you were trading real capital then a profit split wouldnt have been out of place but since with a prop firm you trade simulates/fke capital, then the idea of profit split is out of place.
Most prop firms, for even their funded traders (who pass the challenge), they never send orders to any liquidity providers.
What this means is, even if you get funded after passing the challenge, you are essentially trading against that prop firm, because that prop firm is the market maker.
You are essentially trading a fake market. The broker can set any conditions they want, widen the spreads, bad fills etc.
Will the prop firm have any incentive to see you win, when they are on your opposite side? You can decide that.
If they did send orders for funded traders to actual market via LPs, you could make an argument that they are incentivized to see you win & share the spit, because they are not the counter party. In which case they will actually be funding winning traders.
But are they really?
Yes.
Prop firms are a scam and so the profit split is also a scam.
They will go to any lengths to deny payout, and even if a firm is paying out it will not be long before they shut shop.
Imagine a casino staying in business if all the patrons start winning. That is why they remove any consistent traders from their books using random clauses from their terms.
As a new trader you should get your own capital, learn to trade it and respect it. You will go far.