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The darkest hour has only sixty minutes.

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@MacroLeveraging c'est la vie

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I had been in Lanto’s Discord from early 2023 until earlier this year. I defended him from naysayers in the group and on X, distilled his content into guides early on, and built the chatbot that new members used. This weekend’s fiasco confirmed conclusively what OGs had been flagging for some time.

Fintwit prop firm influencers are “successful” through survivorship bias and volume, not edge.

Buy enough independent attempts and pure luck eventually produces large winners, even when the underlying approach has little or no positive expected value once net on the portfolio is established. Those big runs are the ones that the public gets to see. The average guy in the audience is running 2, 4, maybe 5 accounts on average while paying discord fees to "learn how to trade"

Recent public examples among many in the fintwit affiliate and influencer space:
@dhesi_trades - 170+ accounts
@thebrianstonk - 240+ accounts
@lanto_trades - 819+ accounts

5-6 in eval or S2F fees on just one firm.

Eventually something hits. The run gets screenshotted and turned into content that's used for the next 10 months of promotions for the group, or pushed in promo videos encouraging use of an affiliate code. The costs typically don't see the light of day. Screenshots get cropped (usually), account numbers are hidden, the actual PNL on the machine is kept private.

The machine:
1. subscription fees, course sales, and affiliate commissions fund more accounts
2. more accounts make a big winner close to inevitable
3. the big runs, sell more subscriptions, courses, and garner more aff code use

Repeat.

The prop firm space is inherently dirty, relies on ponzinomics, and is unfixable; it's by design.

But the affiliate and furu space - that props implicitly encourage - is dirtier.

Fresh cash from courses, subs, and affiliate payouts keeps the account volume flowing so the occasional big payouts can be marketed as a skill taught to their followers.

The trading can lose money, but the machine still wins, because the audience pays for step 2 of the machine.

Now look at what's sold. Courses, discord subs, mentorships, and an implied promise to teach a skill to escape the rat race.

Learn this IFVG. Take this unicorn. Manage your risk. Trade the system. Don't forget to like, subscribe, and use code DUMB.

The average member can't play the volume game and nobody tells them that is in fact their mentor's game.

I left for three reasons: the quality of members in the group declined after the TPT run-up and subsequent repeat promotions leveraging that run, OGs who asked questions were treated poorly, and some kept raising exactly the disclosure issues that surfaced this weekend.

Buy enough attempts.
Hide or minimize the cost.
Market the winners as skill.
Accept money from people who cannot realistically replicate the process.

You can pick whatever word or phrase you want for this machine that is pervasive in this "industry."

Mine is "fraud."

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@Sleepy_Tradez @Topstep Agreed.

Props won't do this. They get to hide behind FTC violations their affiliates engage in, and their aff terms protect them from any responsibility.

But agreed in principle.

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@itsjustjamesNQ You missed it. That's okay. Appreciate you feeding the algorithm anyway.

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@itsjustjamesNQ I appreciate that you and half a dozen other people in replies are here to tell everyone all of this is obvious, easy to see, that we're tards for not seeing it immediately, etc. The victims appreciate the reminders that they should have done better.

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@ForensicQuant Good thing you're here to remind everyone

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@boy9191x His strat changed up a little more than a year ago.

He also obfuscates very well for those of us who cannot sit in front of the screen every second, taking notes, compiling inconsistencies.

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@A73548Andrew You're a child

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@tradingdaily25 @VClouette Counter offer: $819,000

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@VClouette Only took me 18 years 😂 stick around another decade for post #2 😆

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@ChartVisionNYC And with that you're out

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What a weird, goofy ass take. OGs had a falling out that was isolated to discord in June premised in part on assumptions, not conclusive evidence.

Secondly, this was the first time clear cut evidence was put forth. Evidence. Not vibes. Not feelings. Not hunches.

Third, calling those of us whose trust he lost "as guilty as he is" is low IQ moralizing jackassery.

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@9Midnight30261 I don't really pay attention to him but the point I made is generally applicable to the influencers in the space. They all use the machine. Subs, accounts, run it up, market the run, rinse and repeat.

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@nickytrades_ @nixtrades Nix is good people afaik

What he said there was me 2023 thru june. I said the same in different words over the years

All good

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@DodgysDD You missed the point of the post.

And you're simultaneously unintentionally proving it

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Check out @MAGNUS_FUTURES content

He speaks to the mathematics behind coin flipping prop accounts. The math is generally favorable. I think most influencers are using - unintentionally imo - similar principles..less organized and strategic but generally aligned. Stat in the game king enough to reach positive expectancy.

For context, lantos 53k on 320k+ spend is roughly coin flip trading. No statistical edge from what is known publically right now.

Generally I like props as a cheap means to practice, but I've always viewed them as being the stepping stone. One step above paper so emotion and actual cash is at risk, and a step before trading your own actual cash.

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@orderflows2me Obviously not everyone, not even remotely "most" people. Hindsight is 20/20

Trust but verify only goes so far when verification is hidden or obfuscated.
Lessons learned.

[Matt Hensley @TiresiasTrading]

Just got back from my honeymoon so I'm a little late to the party, but some thoughts on recent events:

About 7 years ago I was hired on at TradeStation as one of four coaches for their new education department. We did free content, paid rooms, and live events all over the country. Before they even let me fill out my paperwork, they asked for 3 years of account statements (in addition to the brokerage account I'd had with them for years), and an affidavit that I wasn't hiding any losses from them.

Once all that checked out, they flew us down to Florida for 3 days of legal training with their head of legal, who had been a lawyer since before I was born.

I was always a bit surprised this wasn't the case when I did education/entertainment for the props I've worked for over the years. Granted, they weren't broker/dealers, but with most of the big boys now in the brokerage business, they simply need to be more careful.

I don't follow the influencer/affiliate drama much since leaving my last job in the business, and I know next to nothing about the Perp side of things, so I don't know who this latest scammer did or didn't work for. But in this day and age, there's no excuse to not be aware of the trading habits and successes (or lack thereof) of those who carry your brand.

Props are no longer small businesses of 5-7 people working out of home offices. The biggest ones have hundreds of employees all over the world. Ignorance is not an excuse.

I doubt firms make many changes in response to this besides cutting the scammer off, but they should, and here's a couple ideas:

1. Require all affiliates to sign an agreement that they will not misrepresent their trading income in any way. If found to do so, they have to not only forfeit future earnings, but pay back EVERY dime they've received up to that point.

2. Do not allow affiliates to sell courses, Discord access, etc. (I realize this has 0% chance of happening, but it's a YUGE conflict of interest)

You're never going to completely weed out scammers. They've always been around. From the Tim Sykes/Jason Bond era to Lando, some form of this will always exist. But it's time for firms to be active in vetting the trading success of their affiliates.

I've long said that eventually a non-frivolous lawsuit is going to hit one of the bigger names in this space with serious money behind it. When it does, Discovery could break the industry in ways we can't see yet. Associating with people who misrepresent themselves may be the way it happens. These businesses are now big enough that a blue state AG could see bringing them down as a huge feather in their cap on the way to higher office.

It's a new era now.

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@kyltp I appreciate you taking the time out of your day to stop scrolling, hit reply, and type something on a post you didn't read. Stellar contribution. A++

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@ThomasSassie meh. some people weight the "trust" side of "trust but verify" a little too much. These situations are reminders for us glass half full types.