Hello, this is Ali from Prop Connect and I’m delighted to welcome you to today’s interview. We have a special guest with us, Samuel Youngen, the founder of Traders with Edge. Thank you, Samuel for joining us today. We appreciate the effort that you put in to share your insights and experience with our audience.
Welcome. Thank you for having me. All right, so I’ve got a bunch of questions for you. First, let’s start with how did Traders with Edge come into existence as a company, and what were the biggest challenges that you faced during its establishment? So we used to have a funds management company in the Forex trading space.
And we, it was predominantly an algo trading company, so we used to build algorithms. Test them and then go live and manage clients’ funds for high net wealth individuals. What we found is the, cost and the time that it would take to build these models back, test them forward, test them get through compliance before we could actually put them was such long lead time.
It was so expensive and so we thought there must be a better way. To recruit more strategies to put into our portfolio. And so that’s when we started looking at the prop firm model back in 20 I think it was. And that’s where it all started was that idea of wanting to bring in more strategies to the company.
And yeah, I guess in terms of biggest challenges, there’s always challenges with starting up new business new technology, sorting out all your systems and processes. One of the challenges is being a new company in the space. Most prop firms are new in the space, so it’s really funny.
When we first opened the doors in 22, the start of 2022, people said, oh, you’re too new. We don’t trust you. Blah, blah, blah. And then really, there was so many prop firms starting at the same time, and we’re all the same age. And then you fast forward till now, people are still saying the same thing.
They’re like, oh, but you’re just so new. It’s no, hang on. We’re not new. Like pretty much everyone’s new except just a couple other firms out there. So it’s really, it’s I guess it’s not really a challenge, but it’s just an interesting insight into how people think about it. Of course. What makes traders with Edge stand out from other prop firms in the industry?
I guess our biggest point of difference is that we allow traders to customize their challenges based on their trading style. So we have the traditional one phase, two phase and instant funding models, but then we allow traders to increase their draw down change some of the parameters on their challenge to suit their trading style because someone might.
It gives people a chance to pass easier and manage an account in the way that they want to manage it, as opposed to being forced into this set of rules that they may not may not suit their trading style. So that’s probably the biggest point of difference in what we do. But aside from that always focused on customer service, getting back to people really quickly and, working with the trader.
Cause our long term vision is to build a big pool of traders that we can work together in the long term on managing funds. Customer service is very important for any business. So that is. Fantastic that’s the main focus of your company. Could you elaborate on the funding programs that Traders with Edge provides for traders?
Yeah, sure. So as I mentioned, we’ve got the traditional one phase, which is, we call it a turtle challenge cuz you’ve got a whole year to pass. It’s got a 5% drawdown with the 10% target. So typically this is for your traders that might go into a position and hold that position. Longer term, they manage their risk typically better than the two phase guys do.
Just because they have a smaller drawdown. They’ve gotta take smaller risks and still get to the target, but they might not wanna be trading every day. It’s. The, long-term traders who want to find a position, hold it and and ride it through. Then we’ve got the two phase challenge which is your traditional type two phase challenge.
And again, you can customize that to suit your suit your trading style percent draw down 10% target that, that traditional type model there. And the last one is instant funding model where. You come in and you get access to instant funding. There are some limitations around that. I won’t go through all of the all the terms and conditions on the call because we take up the whole call with just that.
But it essentially allows people to start earning straight from day one as long as they can manage their risk and still get the profit targets for us. We may be coming out with another instant funding model for much larger accounts in the. All the accounts have accounts scaling, so anywhere from your traditional type scaling, which is make 10% within four months, and we’ll increase the account by 25%.
We also have a rapid scaling, which is quite rare in the industry where if the trader leaves their profits in the account, we’ll also leave our profits in the account and we’ll top it up. And that allows people to exponentially grow. They could start off with, 50 account on day one in the eight mark up to million dollar account if risk.
A unique spin. This is how traditional prop firms, like we’re talking like old school, 500 people sitting in a, in an office kinda operate. And that’s how we’ve adopted that model and brought that in. And some of the traders love it because it allows ’em to start off that small risk small account and then scale it really quickly.
That’s great. So let’s talk about some of your traders. Can you share a compelling story of one of the traders who joined traders with Edge? Sure. So not giving away personal details, let’s just call him Jim. But Jim came through probably around the start of this year and we, first saw him, he took a challenge, he didn’t make it.
I think he subsequently took two other challenges and didn’t pass. He then passed a challenge, I believe it was on a 200 k two phase account. He’s now gone on for multiple payouts and just this week we paid him he took a withdrawal of $9,000 us. It just goes to show that just cuz you fail once, it doesn’t mean that you know that you’re, a failure or you’re, a loser or you’re not made out, you’re not cut out for prop trading.
It’s a difficult industry. It’s a difficult skill, but if you just focus on yourself. Journal, your trades improve step by step. You’ll eventually get there like this guy has, and he’s he is now doing really well and receiving regular payouts from us. It’s hard starting out. There is a lot on the line, but you do need to learn somehow.
So that’s great to hear that you have plenty of traders who are are making it and finding success. All right, now let’s move on. Talk about some key statistics about traders with Edge. So I’m curious to know if you can talk about the number of traders you have and also what is the most popular program?
Yeah, sure. So we find a few interesting things. One is the two phase challenge typically has a higher pass rate than the one phase. But what we do find is on the lower end, like on the five and 10 K, one phase challenges that we get, a lot more people come through there and pass and keep their account.
So it seems like the people that are taking the smaller challenges, Passing and then they keep their account as opposed to some of the big ones where people just swing for the fences. They place one massive trade when they when they get funded and then they blow their account. What we’re seeing is a trend in the, smaller accounts, they manage their accounts better and ultimately they’re more successful.
So they might not be successful on a much bigger account. I dunno if it’s the pressure that gets to some people managing larger sums of money. Or if it’s just the type of trader who doesn’t, go all in on buying the biggest account they can. They are a little bit more conservative.
Therefore, that mentality of being more conservative flows through to how they trade, which is preferable for traders starting with a conventional Forex broker or a prop firm like Trader’s Edge, and why you could approach this from a number of different perspectives, everyone should start trading on a demo account.
From the start, at least like six, minimum six months, if not 12 months or more. It should be trading on a demo account, ideally a demo account with live conditions, if you can find one that has slippage and spreads and changing market conditions. Many demo accounts, they don’t have any slippage.
They don’t have, they don’t have. Let’s say normal spreads, they’re very thin spreads, and so that means that the trader has a big advantage. And then when they go live, they’re now at a huge disadvantage. So it’s practicing on the demo accounts first. Then really it’s just a numbers game. So if you consider you have a thousand dollars and you put that in your traditional Forex brokerage account, you putting at risk potentially if you holds risky.
Your downside is to lose a thousand dollars with some brokers, you could lose more than that thousand dollars and you then owe them so you could end up losing $10,000 on an account that you only deposited a thousand dollars in. Luckily, regulators have stamped that out in, many countries, but it still is prevalent.
But if you put a thousand dollars in you, and you make, let’s say you make 10% on a thousand, your upside is making a hundred. Your risk is a thousand dollars, so you potentially lose a thousand, but you’re potentially only gonna make a hundred. Let’s say if we’re using 10% as your default.
If on the other hand you took a challenge and you passed that challenge, a thousand dollars is probably equivalent to a $200,000 account. So if you made 10% on a $200,000 account, that’s 20 k profit that you would’ve made minus our profit split, they end up with 16 K. So you’re risking the same thousand dollars, but then you know, you’re comparing a hundred dollars potential profit to 16,000 potential profit.
So I know which one I would like. Likewise, pretty easy choice. In your experience, what are some common mistakes that traders tend to make? Good question. So typically what we see is a couple things. One, people too impatient. They want money in the bank now they want to pass the challenge now and get funded.
And I think the, industry as a whole is partially responsible for this. They placate to what the traders want and they want this fast money. They want the Lambo they want the the holidays and all this sort of stuff. It, causes people to take trades when there might not be trades available.
So there’s not good opportunities in the market, but people try to force the trade. It’s like, all right, I gotta pass this challenge by Friday. They, try to, Enter trades, they would not normally enter in an effort to pass faster, which is not the way. With all of our challenges, we offer plenty of time, even on our two phase challenge.
I didn’t mention this before, but we offer 60 days to pass phase one when the industry standard is pretty much 30 days. So we take more of an approach like, come in, take your time, and just do things properly. But, so that’s the first one. The second thing is not understanding their risk. It’s amazing to see how many people don’t understand how to manage their risk.
So if you’ve got a 10% drawdown, for example, and you’re risking 5% per trade, what it means is you only need to have two losing trades, and you’re out of the, you’re out of the test. That’s it. And doesn’t matter how good your strategy is, you are absolutely going to have a losing streak of two trades, most likely more.
It’s more like you’re gonna have a losing streak of five trades on average. People don’t consider how much they’re risking per trade to be able to focused on passing as opposed to managing their risk. And this is where we see the ones who pass and then keep their accounts. They’re really good at managing their risk, and they might only risk half a percent per trade or maybe 1% per trade if they’re really confident.
All right, so going off that, you’re talking about challenges. What do you consider to be the major challenges that traders face in the industry, and how does traders with edge assist traders in overcoming these challenges? Good question. So I think that it flows on from what I just mentioned, is the biggest challenges that traders face in the industry is, one, they don’t have enough capital.
And that’s why a prop firm is more attractive than a traditional type broker. But then They, try to bridge the gap between not having a lot of capital to to making it big time too quickly. The industry I guess it’s no surprise to a lot of people that a lot of prop firms just make money from selling challenges.
So they want people to come in, do a challenge and fail. That’s not our focus. We want to bring people in, screen them, and then build a, really big portfolio of talented traders that we can work with for the next 10 years. What happens in the industry is that some prop firms come out and they’re trying to make their offering more attractive.
So they say zero minimum days you can pass. So you can take a challenge and then you can pass on day one. No one trades like that professionally, anywhere, ever. Like you go to all these professional fund managers around the world and they just laugh at you. They just think it’s a joke, right? But in the prop firm space, there are some actors that go, come in, you pass on day one and you get this massive account.
So the traders thinking, wow, that’s amazing. That’s really exciting. I’m gonna get funded. I’m gonna be a millionaire when it’s completely not the case. You’ve not had to stick to your disciplines. You’ve not had to stick to your trading plan and do things. You could basically come in, flip a coin, get lucky and pass, and so the industry as a whole, or some players in the industry, I won’t say everyone, they create this environment of gambling where people are like, come in. Swing for the fences, try to get rich, and they know that most people are not, and that the prop firm’s gonna make money from that.
So we’ve tried to steer away from that at the same time while trying to still be attractive to traders where they can come in, we’ll nurture them, look after them. What we’re rolling out soon, actually more, we’ve rolled out some of an education component. Courses where it’s like an open source.
If you’re familiar with ude, Demi experienced traders can come in, create their courses and sell their courses on their platform and mentor other traders. Now we vet them very strictly to make sure that they’ve got a proven track record and actually know what they’re talking about. But it gives experience traders a platform to be able to educate and help other people.
And also the traders who. To get experience and really compressed time. Instead of them going out and making all mistakes, they can come in and get mentored and, coached by people that are experienced. So that’s how we’re trying to solve this, issue. It’s people that want to come in and have a, long term career in the industry and not so much just.
Put it on black or red and hope they win. I like that approach. What is the most valuable advice that you’d give someone who’s considering starting a career in trading? Just getting familiar with the setup, the technology, and knowing it really like the back of your hand. Once they’ve done that, it’s finding a strategy that suits their style.
There’s some personality tests out there that people can do specific to trading to figure out where their strengths and weaknesses are. Some people the shorter term, they just want to get into a short trade and be out in less than an hour. Other people their behavior is more long term.
They’re a bit more patient and they can enter a trade and they don’t care what happens and they can leave it for a couple weeks. They’re two completely different personality types and there’s many others in between. And it’s not to say that one’s better or worse, it’s just that if you are more of an in inpatient type person or, shorter term person, like you, like scalping, but then you’re trying to trade a strategy that’s suited for more long term you’re never gonna be successful with that strategy.
The second step is really understanding yourself and understanding what your, strengths and weaknesses are, what your preferences are. So it is finding a strategy and it’s also finding the instrument that you wanna trade on. So is it trading just on gold? Is it picking an instrument just like Euro u s D or is it trading stocks?
And the, inherent part within that, that I think most people don’t talk about, One strategy doesn’t work across all instruments and it it definitely doesn’t work across all instruments the same. So you might have a great strategy for gold, but it doesn’t work on Euro. USD, for example, completely won’t work on stocks.
So it’s finding a strategy that works on one instrument and just like getting to know yourself. It’s also getting to understand that instrument and really become the specialist in that one instrument. And that’s what’s going to help you become a successful trader much faster. Aside from that, it’s obviously learning about risk management, understanding your numbers.
Cause if you don’t understand your numbers, like I mentioned before, if you lose. And you’re out of the game then, that’s it. The you can go and buy another challenge, right? You can go on work and get some more money and deposit it into a broker, but at the end of the day, you’ve gotta understand your numbers and the impact that they have.
One simple statistic around losing money in an account, if you start with a thousand dollars account and you lose 20%, people go, oh I’ve just gotta make 20% to get back to zero. No actually now you’ve gotta make 25% to get back to zero. So you lost 20, but now you’ve gotta make 25 back.
Most people don’t even realize that. And so it’s simple maths that are stacking the deck against you if you don’t know these things. So you really need to know your math to be successful. Trader. Absolutely. Except for some people, cause they just see the money in it and they don’t really focus on building those skills.
So that’s, I think, incredibly valuable advice that our viewers will enjoy. From your perspective, what steps should a prop firm take to establish trust with traders? From our experience, it’s just been it’s been time obviously, People posting reviews video reviews. We we have a lot of traders leaving video reviews for us.
That’s different than other companies. I think what the trader doesn’t realize sometimes is that it’s easy to go and buy fake reviews. So there’s a couple companies out there, and I’m not gonna name names, who have thousands upon thousands of reviews, and they’re not necessarily real reviews. So you can go buy reviews on some fake sites.
And, get those bolstered quite quickly and easily. We haven’t done that at all, even though it’s detrimental to our business because it means that people look at us and they’re like, why do you only have few hundred reviews as opposed to a few thousand? I think fundamentally it’s doing the right things, whether you get rewarded for it or not only traders who have actually traded with us can leave us a review.
Whereas what some, other companies do is they say, Leave us a good review, and then I’ll give you a discount code even if they haven’t traded with them. There’s, stuff that goes on like that, which traders don’t really know. But in terms of the prop firm establishing trust, it’s really providing the transparency and building up the reviews and good customer service.
People also talk aside from having reviews that people can go and look at in different communities, people are talking about things behind the scenes. So some prop firm might have a big flashy storefront and great specials of the week or whatever it might be, but then people that have actually gone and traded with them are talking by, and the scenes going hang on, these guys are really dodgy, or whatever it might be.
So that reputation thing, and unfortunately it just does take time. It definitely takes time, but eventually word does get out and you know when people are purchasing fake reviews, it gets back to ’em. So it’s very respectable that you’re not, because it’s so easy to do. So these days. Long term, that will be a very smart choice.
Moving on, I’m curious to know what are your insights about the future of the prop room industry, and do you believe that it’s a stable industry in the long run? It’s we see a number of different prop firms coming in. They try to make really good trading conditions or, really good challenges, again, to try to make it attractive for the trader to come.
And I guess a word of advice for traders is you see a new prop firm pop up and if they have trading conditions that are too easy or you think, oh, this one’s gonna be really easy to pass. It’s just being very mindful of. Someone’s going to lose in the transaction. Either the traders it’s not as easy as they make it appear and the traders are not gonna pass, or they make it really easy.
They make it seemingly look easy, but then they’re failing traders on some technicality that is hidden in print. So I went off there a little bit, but I. In terms of where the industry is going we’re gonna see more and more prop firms pop up, but we’re also gonna see consolidation and people figuring out who really are the businesses that are gonna be there for the long term, and understanding the attributes of when a new prop firm pops up.
The ones that are not gonna be around because you don’t know. It’s like you don’t know when a prop firm’s going to fold for some of the ones that, that pop up, they look amazing, and then two months later they’re not there. So I think traders are getting smarter and they’re talking in the communities and figuring out, okay, this one looks amazing, but hey, it might not be around.
So I think that community knowledge is, starting to grow. I actually haven’t thought about too much. Where is industry gonna be in the, I think this distributed model of having traders trade for you around the globe is, Certainly a trend that’s not going to change. That’s exactly why we started it.
To have an office with and, big floor space with 500 traders is very expensive. You’ve gotta have insurance and all these all these other things your, rent and overheads are, ridiculously high. So I think the future of prop firm trading is definitely this distributed model where you can have someone in in India or China or wherever.
Sitting behind their computer and trading for you as a company that’s not going to go away. I think the more the world becomes fragmented more and more people are wanting to work online. I think the disruption of technology more recently is pushing more people to want work online.
We still have in India, I mean it’s only like 40% of people actually online in India. And you’ve got 1.3, 1.4 billion people, so they’ve still got a massive amount of people to come online and they’re all gonna want jobs or ways of making income. There’s so much potential that has not been realized yet.
All right. Going off that, can you share any upcoming plans or initiatives that Traders with Edge has in store as a platform? Sure we have actually have a lot rolling out over the next few months. Some of it I can talk about, some I can’t. As mentioned before, we’ll probably have a new trading challenge coming out.
We’ve built a one phase challenge that no one else is offering. Which, is allows traders to get access to much more capital for a one phase challenge. Typically, your one phase challenge is, are capped at under your 50 K, maybe 80, 90 k. Whereas we’re potentially gonna be able to offer much much higher limits on those.
We’re working on some AI that is that’s very cool. That’s gonna assist all of our traders. I can’t tell you too much about it, but it is very cool and it will help all of our traders in our community. So we have a we have a community, like a Facebook, but it’s just for traders within our platform.
They can download our app and there’s gonna be some cool features rolling out there over the next few months as well. Wonderful. And finally, where do you envision traders with Edge in the future and what are your expectations for the prop firm industry as a whole? I really wanna see traders with edge grow to having a consistent portfolio of traders that we can back for the long term.
It’s not so much just about bringing people in the front door and then having them leave out the side door. It’s bringing traders in that we can work with and nurture and build a long term relationship with over the next five to 10 years. That’s really where we want to see the company.
Do you have any other advice that you’d like to leave our viewers before we sign off? I think just reiterate what I mentioned before, which is just get educated, practice, find your, niche, find what’s comfortable for you. You gotta find the fits you first. And not put pressure on yourself as hard as that is, and just take your time and take it step by step.
You think about going and becoming a doctor. You don’t go and download an app, and then you become a doctor tomorrow, right? You go and you study and you focus on your practice and you find your area of specialty, and then one day you become a very successful, highly paid doctor. And that takes a PR a period of time.
But traders come in with this expectation of I download this thing, I push a button and I’m a millionaire, which is just completely not right. But Wall Street bets come on. It’s super easy. We see success threes all the time. Yeah, that’s it. I think that’s really good advice to leave with. It takes time, it takes patience, it takes a lot of practice.
So we need to reiterate that because in this industry, things get out of hand really fast. That is wonderful advice. I hope that everybody’s listening. If they are, then they will 10 years down the road. Thank you for that. Samuel, thank you so much for the time. It was a pleasure meeting with you today and this was a great interview.
