My Thoughts on AxiTrader’s Million Dollar Trader Competition

By | December 16, 2015

Million Dollar Trader is more of a chance for the next generation of talented traders to show what they’ve got, measure their performance against their fellow traders and, if theyre a top performer, get access to external funds that can help take their trading to a higher level. – AxiTrader General Manager Alex MacKinnon via LeapRate

If I were to make a parallel, I think this whole AxiTrader deal is like a rotten food product wrapped up in a nice, shiny box that just makes your mouth water. But when you open it up, the sight and the smell coming out of it leave you no choice other than to throw it in the trash can.

So here’s how the packaging looks like: open a minimum $5,000 account with Axi, trade for three months (February – April 2016) and if you have the highest return, you get to manage a $1 million account. There are also secondary prizes: $500k, $250k and 2 $100k accounts. You’ll get a 25% cut of all trading profits, paid quarterly, and subject to a high watermark. You’ll also be a part of what Axi calls ‘next generation of talented traders’ and receive a pathway to a career as a professional trader.

Now, the attentive observer has already noticed an important issue with this packaging, namely the assessment criteria – highest return over three months. If we go back to our food parallel, that’s like noticing on the box that it’s 6 months past its sell-by date.

Why the content stinks: in a nutshell because it’s just an advertising campaign masquerading as a search for talented traders. Going into more detail:

  • you can’t assess trading skill by measuring the highest return over a three month period. That’s a filter for leverage and luck, not talent. Someone using a martingale strategy for instance, where it’s just a matter of time till the account is ruined, might get lucky and win this competition.
  • the draw-down limit on AxiSelect accounts (the ones with the prize money) is 10% (see terms-and-conditions) not 20% as shown on LeapRate and Million Dollar Competition page.
  • Axi will act as principal ( counter-party) on each client’s trade. In other words, they’re prepared to take the money of the over-leveraged, over-trading, EA running cowboys blinded by this offer.
  • The company risks 10% (draw-down limit mentioned above) of $1M + 500k + 250k + 200k = $195k. If we divide this by the minimum $5k needed to enter the competition we get 39. Axi needs just 39 guys to blow up their accounts in order to cover all the prizes. This part is the one that reeks the most to me. Here they are, deliberately misleading people that what it takes to be a talented trader and go professional is to score the highest return in a 3 month period. They know very well that going for this goal in such a short period of time means over-leveraging and/or over-trading. And while you, with bleary eyes from that $1 million, deposit the $5k in an AxiTrader account, they’re laughing at you all the way to the bank.

Update May 2016: the winner has been announced, so I wrote a follow-up article.