Due diligence and reputation signals

Everything in this course assumes the firm will honour its own rules and pay. Since 2023 that assumption has failed often enough that firm selection is a risk decision on the same footing as position sizing. This lesson gives you a checklist you can complete in an hour, and a set of signals that separate firms which have paid consistently from firms which have not.

The checklist

Work through it in order and write the answers down. A firm that fails any item in the first group should not receive your fee.

Group 1: existence and identity

Group 2: the rules, in the firm's own words

If the rules page, FAQ and terms disagree, the terms win, and the disagreement itself is a signal.

Group 3: money

Key idea: Due diligence is an hour of reading the firm's own documents and one search of what people say happened at payout time. A firm that cannot pass that hour has not earned a fee, however good the discount code.

Reputation signals

No single review site is reliable; affiliates post positive reviews and failed traders post negative ones. Look instead for patterns over time.

Signals that a firm has been paying:

• Payout reports from named community members over several years, including small ones, with the timeline from request to receipt.
• Rule changes that were announced in advance and applied only to new purchases.
• The firm publishing anything at all about pass rates or payout totals, even unfavourable numbers.
• Support that answers rules questions specifically, in writing, before you buy.
• A stable platform and data provider relationship of more than a year.

Signals to weigh heavily against a firm:

• Payout delays that cluster in time, with support citing "review" for many accounts at once.
• Rule changes applied to existing funded accounts, especially to drawdown type or consistency.
• A change of legal entity or jurisdiction without a clear explanation.
• Heavy discounting (60% to 90% off, permanently) combined with aggressive affiliate marketing. Fee revenue under pressure is a reason to tighten payouts.
• Terms that allow the firm to void profits for "any reason" with no appeal process.
• New firm, no track record, huge nominal accounts, unusually generous rules. Generosity that the funnel in Module 1 cannot support is not going to last.

Weighting the signals

You are not looking for a firm with no complaints; every firm has failed traders with grievances. You are looking for the absence of payout-time patterns and rule-change-on-existing-accounts patterns over at least a year. Read the community forum at /f/prop-firm-reviews for the specific firm, sort by date, and look for what changed when.

A simple scoring approach: give the firm one point for each "paying" signal and subtract two for each "against" signal. Below zero, do not buy. Between zero and two, buy the smallest evaluation only. Three or more, proceed with the plan from Modules 3 and 4.

Try it: Complete Group 1 and Group 2 for one firm and time it. Then post or read the firm's thread at /f/prop-firm-reviews and note the three most recent payout reports with dates and request-to-receipt times.

Recap

• Due diligence covers identity (entity, age, platform, jurisdiction), rules in the firm's own words, and the full cost and payout path.
• The terms override the rules page; disagreement between them is itself a warning.
• Positive signals are dated payout reports over years, rule changes applied only forward, and specific written support answers.
• Negative signals are clustered payout delays, changes applied to existing accounts, entity changes, permanent deep discounting and unappealable discretion clauses.