Choosing the right
Prop Firm
A proprietary trading (prop trading) firm is a financial company that invests its own capital in financial markets, including stocks, forex, commodities, and derivatives. Unlike traditional brokers that handle clients’ money, prop trading firms trade with their own funds to generate profits. They often recruit skilled traders or provide training to new traders and allow them to trade the firm’s capital in exchange for a share of the profits.
How Does a Prop Trading Firm Work?
- Funding Traders: Prop firms provide traders with capital to trade on financial markets. Traders typically start with a smaller account and can scale up based on performance.
- Profit Sharing: In exchange for using the firm’s capital, traders receive a share of the profits they generate. The split can vary by firm, with common profit-sharing ratios being 50-80% to the trader.
- Risk Management: Prop firms impose strict risk management rules, such as daily drawdown limits or stop-loss levels, to protect their capital.
- Training and Resources: Some firms offer training programs, mentorship, or access to advanced trading tools and platforms to help traders succeed.
- Fees: Many prop trading firms charge an initial fee to cover evaluation or training costs, and others may take monthly fees for software or platform usage.
Pros of Trading with a Prop Firm
- Access to Capital: Traders get access to large amounts of capital, allowing them to trade with more significant positions than they could with personal funds.
- Reduced Risk for Traders: Traders risk only the capital allocated by the firm, so they don’t lose their own money in the event of a bad trade.
- Leverage: Prop firms often offer higher leverage than retail brokers, allowing traders to control more considerable positions with less margin.
- Profit-Sharing: Traders can earn a substantial portion of the profits generated, often with a more generous split than in other financial roles.
- No Personal Liability: If a trader incurs losses, they generally aren’t personally liable beyond the firm’s capital.
- Support and Resources: Many prop firms provide access to high-end trading software, data feeds, and research tools. Some offer mentorship from experienced traders.
Cons of Trading with a Prop Firm
- Profit Sharing: While the firm provides the capital, the trader must share profits. This limits the amount traders can keep compared to trading their own money.
- Risk Management Rules: Strict risk limits and drawdown thresholds can be restrictive. If a trader violates these rules, they may lose their account or get penalised.
- Upfront Fees: Many prop firms charge an initial fee for training or account evaluation. If a trader fails to perform well, this can be a sunk cost.
- Evaluation Process: Some firms require traders to pass a rigorous evaluation process before being funded. This process can be stressful, and not all traders pass.
- Job Security: Prop traders are often considered independent contractors, so there’s less job security than in traditional employment. If a trader performs poorly, they may lose their account.
- High Pressure: Trading with a prop firm’s capital can be stressful, especially under strict risk management and profit expectations.
Is Prop Trading Right for You?
Prop trading is one of the most attractive ways to trade because high-quality traders want to trade with access to capital but without losing their own money. It needs discipline, the ability to cope with pressure and the readiness to act within the risk parameters of the firm. Before deciding to join a prop trading firm, it is important to assess its terms and reputation because they might be drastically different. Comparing between forex prop firms looks into their trading terms, risk management schemes and payout packages.
Search the best forex prop firms that match your trading style and present the best terms. Research on prop firms forex and the rankings of the top prop firms forex will assist you in locating a suitable firm in order to improve your chances of trading. To have a vivid picture of different brokers, you can refer to our comparison of forex brokers to make a wise choice.
Top Prop Firms Globally
OANDA Prop Trader
Pros:High liquidity; wide range of cryptocurrencies; low trading fees. Cons:Regulatory issues in some regions; not always beginner-friendly.
Additional Information:
Cost of Challenge: Varies (depending on account size)
Year Founded: 1996
Country of Origin: USA
Alpha Capital Group
Pros:Flexible trading conditions; supportive community. Cons:Newer in the market; limited brand reputation.
Additional Information:
Cost of Challenge: Approx. $400 for 100K challenge
Year Founded: 2020
Country of Origin: UK
Funded Next
Max Funding:up to $4 million in funding Profit Share:Up to 90%. Regulatory:Under the UAE Juristriction.
Maven Trading
Max Funding:up to $200 000 in funding Profit Share:Up to 80%. Regulatory:Reputable brokers regulated by recognized financial authorities.
Funding Pips
Pros:Lower challenge costs; simple evaluation process. Cons:Less established compared to competitors; smaller account sizes.
Additional Information:
Cost of Challenge: $300 for a 50K challenge
Year Founded: 2021
Country of Origin: USA
Audacity Capital
Max Funding:up to $2 million in funding Profit Share:Up to 90%. Regulatory:Under the UK Juristriction.
E8 Funding
Max Funding:up to $400 000 in funding Profit Share:Up to 100%. Regulatory:Under the United States Juristriction.
TopStep FX
Pros:Reputable and well-established; no time limits to complete the evaluation. Cons:Subscription fees can be expensive; profit splits start lower.
Additional Information:
Cost of Challenge: $165 per month for a 50K challenge
Year Founded: 2012
Country of Origin: USA
5%ers
Max Funding:up to $4 million in funding Profit Share:Up to 100%. Regulatory:financial authority, they implement AML (Anti-Money Laundering), KYC (Know Your Customer), and KYB (Know Your Business) policies
FTMO
Max Funding:up to $2 million in funding Profit Share:Up to 90%. Regulatory:FTMO has emerged as a prominent proprietary trading firm.
My Forex Funds
Pros:Competitive pricing; rapid scaling opportunities. Cons:Strict rules; tighter evaluation processes.
Additional Information:
Cost of Challenge: $499 for a 100K challenge
Year Founded: 2020
Country of Origin: Canada
Blue Guardian
Pros:Lower fees; reasonable challenge requirements. Cons:Newer in the industry; smaller funding available initially.
Additional Information:
Cost of Challenge: $299 for a 100K account
Year Founded: 2021
Country of Origin: USA
SurgeTrader
Pros:
No time limits on challenges; competitive pricing.
Cons:
Limited profit splits; lower maximum leverage.
Additional Information:
Cost of Challenge: $400 for a 100K challenge
Year Founded: 2019
Country of Origin: USA
Lux Trading Firm
Pros:
No time limits on challenges; competitive pricing.
Cons:
Limited profit splits; lower maximum leverage.
Additional Information:
Cost of Challenge: $500 for a 100K account
Year Founded: 2019
Country of Origin: USA
City Traders Imperium
Pros:
Educational resources included; flexible profit splits.
Cons:
Higher initial fees; requires high levels of discipline.
Additional Information:
Cost of Challenge: $400 for a 100K account
Year Founded: 2018
Country of Origin: UK
The Trading Pit
Pros:
Fast payouts; diverse funding models.
Cons:
Strict risk parameters; newer entrant to the market.
Additional Information:
Cost of Challenge: $350 for a 100K challenge
Year Founded: 2021
Country of Origin: Germany
Fidelcrest
Pros:
Up to 90% profit split; global reach.
Cons:
Complex challenge structure; mixed user reviews.
Additional Information:
Cost of Challenge: $549 for a 100K challenge
Year Founded: 2018
Country of Origin: Cyprus
Leveled Up Society
Pros:
Low challenge fees; fast scaling.
Cons:
Smaller starting account sizes; high competition.
Additional Information:
Cost of Challenge: $250 for a 50K challenge
Year Founded: 2022
Country of Origin: UAE
Bespoke Funding
Pros:
Low challenge costs; simple and transparent process.
Cons:
Limited track record; smaller community.
Additional Information:
Cost of Challenge: $300 for a 100K challenge
Year Founded: 2021
Country of Origin: UK
OneUp Trader
Pros:
Flexible trading styles allowed; no time limits.
Cons:
Higher monthly subscription fees; evaluation phase required.
Additional Information:
Cost of Challenge: $150 per month for a 50K challenge
Year Founded: 2016
Country of Origin: USA
Axi select
Max Funding:up to $1 million in funding Profit Share:Up to 90%. Regulatory:AxiCorp Financial Services Pty Ltd, which is authorized and regulated by the Australian Securities & Investments Commission (ASIC) under AFSL number 318232.
Master Funders
Pros:
Funding on a live trading account.
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Funding upto $1 million
.
No registration fees and monthly fees, 100% free
Cons:
No profit sharing for 30 days
My Funded Fx
Max Funding:up to $1.5 million in funding Profit Share:Up to 80%. Regulatory:While My Funded FX is not regulated by major financial authorities, it emphasizes secure trading environments and adheres to industry-standard practices to protect trader data and funds.
Fxify
Max Funding:up to $4 million in funding Profit Share:Up to 90%. Regulatory:Regulated Broker Partnership & Trader Protection
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