"Beginning of the End": Axi Predicts Collapse of Demo Account Prop Trading Model

Axi Select, the proprietary (prop) trading platform run by the brokerage firm Axi, has revealed that the number of active traders on the platform jumped 40 percent month-over-month. These metrics coincided with the broader proprietary trading industry facing scrutiny following an alleged crackdown by MetaQuotes, the developer of two popular MetaTrader platforms.

The Australia-headquartered company also questioned the widely used demo trading models by prop firms. Axi Select, on the other hand, offers live trading to its prop trading clients.

“Unfortunately, this could be the beginning of the end for the demo account prop firm model,” said Greg Rubin, the Head of Axi Select.

Chaos in Prop Trading

Most prop trading firms only offer services in demo trading environments. Based on their risk controls, these platforms take positions in real markets, taking signals from the traders' positions. This model additionally creates trouble in payouts to traders in many cases.

In the last two weeks, the vulnerability of most of the prop trading industry surfaced, as many were forced to suspend services after losing their brokerage partner. Several others were either forced or voluntarily restricted services to their existing customers in the United States, allegedly due to a crackdown by MetaQuotes. Many prop trading firms are now looking for alternatives to MetaTrader platforms.

“We foresaw this, which is why we’ve developed a capital allocation programme which is built on our live trading account model and has been available in over 100 countries for more than 16 years,” Rubin added.

“This has given us the confidence that Axi Select is a long-term solution to the prop trading community, and is not subject to the issues now faced by prop firms who offer the demo account registration fee model and are under constant pressure from regulators and their tech partners.”

Prop Trading Services by Brokerages

Axi launched its prop trading services last September, offering up to 90 percent profit split to traders. Although the broker holds holds licenses in reputed jurisdictions like Australia and the United Kingdom, it offers the prop trading services under its St Vincent and the Grenadines-incorporated entity.

Axi was the first established broker to launch prop trading services, while OANDA and Hentec Markets followed suit. Interestingly, these brokers offer prop trading services under their offshore entities. OANDA also clarified that it treats its prop trading customers as signal providers.

“Our Axi Select account has all the controls we offer to our live account holders globally,” added Rajesh Yohannan, the Group CEO of Axi.