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Eduardo Montero

Author: Eduardo Montero

Last Updated on April 17, 2024

Prop Trading Firms Comparison

Choosing a Proprietary Trading Firm is never easy, whether you are beginner or professional. You want to get the most for your money and also matches your needs. The easiest way to do this is by comparing the table below. This will make you much easier, especially when searching online which overwhelms with so many results! We’ve compiled a quick-easy comparison list of the best prop trading firms to help you choose be it forex, futures or stocks. They offer funded trading account from little as $10k to all the way up $1M and even $2M too.

Prop trading firm Initial balance Features  
BASED IN CHICAGO, HIGHLY TRUSTED FUTURES PROP FIRM.
50k bp for $165 $49/month
100k bp for $325 $99/month
150k bp for $375 $149/month

bp=buying power
  • For trading Futures only
  • You can trade futures on indices, foreign exchange, cryptocurrencies, crude oil, natural gas, gold, silver,…
  • Keep your first $10,000 in profits and 90% after that!
  • 1 step evaluation, 1 rule (do not exceed the Maximum Loss Limit)
  • Reset your challenge if you hit MLL.
  • Platforms like TSTrader, Quantower and more.
More info at https://www.topstep.com
60%
to
70%
OFF
Coupon

60% to 70% Off on Topstep

70% discount on $50k account
69% discount on $100k account
60% discount on $150k account

No code required. Discounts are already applied on the Topstep website.

 

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BASED IN TEXAS. EXCELLENT USER RATINGS.
50k balance for $289
100k balance for $489
200k balance for $939
300k balance for $1,399
400k balance for $1,869

Prices for Royal Challenge (More programs available)
  • Up to 90% profit split (80% default)
  • 5 different programs with 1, 2 or 3-step evaluation and features adaptable to all types of traders.
  • Can use EAs, scalping, news trading,…
  • Up to 1:200 Leverage.
  • Refundable registration fee. One-off payment (not monthly).
  • Low prices and frequent promotions and discount coupons.
More info at https://thefundedtraderprogram.com
15%
OFF
Coupon

15% Off Coupon Code on The Funded Trader

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BASED IN TEXAS. FUTURES PROP FIRM WITH A GOOD REPUTATION.
25k balance for $147/month
50k balance for $167/month
75k balance for $187/month
100k balance for $207/month
150k balance for $297/month
200k balance for $517/month
300k balance for $657/month

Prices for Rithmic/NinjaTrader plans (Tradovate/NinjaTrader plans available)


  • You can trade futures on indices, interest rates, currencies, cryptocurrencies, agricultural products, energies and metals.
  • Receive 100% of the first $25,000 and 90% after that!
  • One-step evaluation (7 trading days minimum).
  • No daily drawdowns (only live trailing threshold).
  • Trades must be closed before 4:59 PM ET. Trade on holidays or during news.
  • Real-time data and NinjaTrader license included in evaluation.
More info at https://atf.com
80%
OFF
Coupon

80% Off Coupon Code of any size Evaluation Account on Apex Trader Funding

Also One Day To Pass Eval and Half Priced Resets

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Expires on: 05/01/2024
BASED IN LONDON, UK. COMPETITIVE PROP FIRM.
$12,500 balance for $119
$25,000 balance for $199
$50,000 balance for $349
$100,000 balance for $499
$200,000 balance for $949


Scaling plan up to $2,500,000


Prices for Experienced Trader Program (One-Phase. More programs available)
  • Profit split of 80% from the start (90% after making a 20% profit and 100% after making a 30% profit).
  • 4 programs available with 1 or 2-step evaluation or with instant funding without evaluation (in Master Program).
  • Simple and transparent rules that are easy to comply with.
  • No time limits (no maximum or minimum trading days).
  • Simple scaling plan up to $2,500,000. Grow your account every time you reach a 10% profit.
  • You can withdraw profits from day one (minimum $50) and request new payments every 7 days.
  • The access fee is a one off charge and refundable (no monthly fees).
More info at https://www.fundedtradingplus.com
10%
OFF
Coupon

1O% Off Coupon Code on all evaluation accounts of Funded Trading Plus (not available for instant funding program)

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Instant funding without evaluation. HEADQUARTER IN LONDON.
$3,500 balance for $200
$10,000 balance for $550
$15,000 balance for $750
$22,500 balance for $1200

Scaling plan up to $5,760,000
  • 1 step evaluation program or instant funding program without evaluation.
  • Rapid scaling plan with 7 levels.
  • Profit split 50/50 (level 1) up to 80/20 (level 7).
  • Withdraw profits anytime from level 2.
  • All trading styles are welcome. Hold trades over weekends. No minimum trading days.
  • One-time fee. No recurring monthly payments.
  • Up to 1:100 Leverage. Trade Forex, Indices, Commodities and Metals.
More info at https://www.ftuk.com
30%
OFF
Coupon

30% OFF SPECIAL OFFER on FTUK

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Expires on: 04/27/2024
5%
OFF
Coupon

5% Off Coupon Code on FTUK

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In the following comparison table you can discover the most relevant features of these prop trading firms:

Prop Firm Balance / Fee Profit Split Profit Target Max. Drawdown Maximum Time Instruments Leverage Visit
50k balance for $165 $49/month
100k balance for $325 $99/month
150k balance for $375 $149/month
100% of the first $10,000 you generate and 90% from that amount.
6%
4% to 3% Maximum Loss Limit (the percentage varies depending on the account you choose).
No time limits.
Futures Markets: CME Exchange (22 instruments) NYMEX Exchange (7) COMEX Exchange (6) CBOT Exchange (14)
Up to 1:100
50k balance for $289
100k balance for $489
200k balance for $939
300k balance for $1,399
400k balance for $1,869

Prices for Royal Challenge
(More programs available)
80% (90% with scaling)
8% for Phase 1.
5% for Phase 2.
5% Max Daily Loss.
10% Max Loss.
No time limits.
Forex, Indices, Commodities, Metals and Cryptocurrencies.
Up to 1:200
25k balance for $147/month
50k balance for $167/month
75k balance for $187/month
100k balance for $207/month
150k balance for $297/month
250k balance for $517/month
300k balance for $657/month
100% of the first $25,000. 90% from that amount.
5.66% to 6.66% (6% in most accounts).
No daily drawdown.
6% to 2.5% Max trailing threshold (the percentage varies depending on the account you choose).
No time limits.
Futures Markets: CME Exchange (23 instruments) NYMEX Exchange (7) COMEX Exchange (7) CBOT Exchange (13) EUREX (11) ICE (8)
1:1
$12,500 balance for $119
$25,000 balance for $199
$50,000 balance for $349
$100,000 balance for $499
$200,000 balance for $949

Scaling plan up to $2,500,000

Prices for Experienced
Trader Program
(One-Phase. More
programs available)
80% from the start.
90% after making a profit of 20%.
100% after making a profit of 30%.
10%
4% Maximum Daily Loss.
6% Maximum Loss.
No time limits.
Forex, Indices, Commodities and Cryptocurrencies.
Up to 1:30
$3,500 balance for $149
$10,000 balance for $349
$15,000 balance for $449
$22,500 balance for $599

Scaling plan up to $5,760,000
50% (level 1) up to 80% (level 7)
10%
6% (of the balance of each level on scaling plan).
No time limits.
Forex, Indices, Commodities and Metals.
Up to 1:100

Top Proprietary Trading Firms

Topstep

Topstep

Topstep is a futures prop trading firm with a good reputation built up over more than 10 years of activity since its founding in 2012. It is based in the United States in Chicago and in that time has funded thousands of traders around the world and distributed millions of dollars in profits year after year.

It is a company in which I personally highlight its profit sharing scheme in which you keep 100% of the first $10,000 you generate and 90% from that amount. It offers accounts for trading futures up to $150,000.

To learn more about Topstep I recommend you to have a look at my Topstep review.

Features FEATURES:

Topstep has a one-step evaluation process called Trading Combine.

You can choose from several types of futures like equity indices, Forex, agriculture, energies, interest rates, metals,…

Futures accounts from $50,000 up to $150,000.

Depending on the account you choose in this proprietary trading firm, you must comply with a series of rules and objectives.

You can check the details on the company’s website: https://www.topstep.com.

The payment to access the evaluation process is recurring month by month.

Topstep does not impose a maximum time limit for completing the assessment but charges you monthly until you pass it.

Cons CONS:
  • Only offers futures trading.
  • The evaluation process involves a monthly recurring payment. You may be able to accumulate several fees.
  • 30 winning trading days to unlock access to 100% of your balance.
Pros PROS:
  • Prop firm with excellent reputation and more than 10 years of experience.
  • High profit split: 100% of your first $10,000 and 90% thereafter.
  • Good customer service.
  • Good training program and free coaching to improve your trading.
60%
to
70%
OFF
Coupon

60% to 70% Off on Topstep

70% discount on $50k account
69% discount on $100k account
60% discount on $150k account

No code required. Discounts are already applied on the Topstep website.

 

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Check here more information about the TopstepTrader discount coupon.

Open Account

The Funded Trader

The Funded Trader

The Funded Trader is a prop trading firm headquartered in the United States (Liberty Hill, Texas). It started its activity in 2021 and its founders have previous experience in the online trading industry in projects such as The Forex League and VVS Academy.

Despite its relatively short history, it has grown significantly over the years by funding profitable traders from all over the world and today the company enjoys a good reputation as evidenced by its excellent rating of 4.7 out of 5 on Truspilot with over 6600 reviews.

Much of the success of this prop firm is due to its simple trading rules, its 4 programs adaptable to any type of trader, its funded accounts up to $600,000 of capital that can grow up to $1.5 million with the scaling program and its profit split scheme of up to 90% for the trader.

Do you want to know more about The Funded Trader’s features? Check out this The Funded Trader review.

Features FEATURES:

The Funded Trader offers 5 different programs (Standard Challenge, Rapid Challenge, Royal Challenge, Knight Challenge and Dragon Challenge). In the Standard Challenge, Rapid Challenge and Dragon Challenge programs you can choose between Swing mode (allows you to keep trades open over the weekend) and Regular mode (not allowed). The Rapid Challenge, Dragon Challenge and Knight Challenge have no minimum trading days. In the Royal Challenge, Dragon and Knight Challenge programs you can use Expert Advisors. Strategies such as scalping are allowed on any account.

The evaluation stage is designed in 2 steps in all programmes with the exception of the Knight Challenge which has only 1 step and no maximum duration limit and in the Dragon Challenge which is designed in 3 steps and where access fees are cheaper..

TFT Challenge:

The maximum trading time is unlimited in all programs. You can advance to the next phase by completing the objectives.

Verification Phase:

Main rules:

  • Avoid a Maximum Daily Loss of 5% Standard Challenge / 5% Rapid Challenge / 5% Royal Challenge / 5% Dragon Challenge / 3% Knight Challenge
  • Avoid a Maximum Loss of 10% Standard Challenge / 8% Rapid Challenge / 10% Royal Challenge / 10% Dragon Challenge / 6% Knight Challenge

You can check the rules on the official The Funded Trader website: https://thefundedtraderprogram.com

After passing the evaluation you will get up to 90% of the profits you generate (80% by default and up to 90% with the scaling plan).

The Funded Trader allows you to trade all types of financial instruments (Forex, indices, metals, commodities and cryptocurrencies).

Cons CONS:
  • Shorter track record (since 2021) than other proprietary trading firms.
  • Trades will always be executed on a demo account (even after the evaluation process).
  • This does not affect your profits but they reserve the right at their discretion to copy or not copy trades in the real market.
Pros PROS:
  • Excellent rating of 4.7 of 5 from over 6600 user reviews on Trustpilot.
  • Fewer trading rules than in other prop firms and they are easy to understand.
  • Maximum leverage level is high: up to 1:200.
  • Allows you to choose between several brokers (Eightcap, Purple Trading or ThinkMarkets).
  • Profit withdrawals are processed quickly and there are multiple payment methods to choose from.
  • Challenge access fees are one-off, refundable and low compared to other prop trading firms.
15%
OFF
Coupon

15% Off Coupon Code on The Funded Trader

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Here you can see all the details of The Funded Trader discount code.

Open Account

Apex Trader Funding

Apex Trader Funding

Apex Trader Funding is a proprietary trading firm based in Austin, Texas (USA) founded in 2021. It is an established brand in the prop trading industry focused exclusively on futures trading and has clients in more than 150 different countries.

It stands out for offering simple trading rules, e.g. no daily drawdowns, a one-step evaluation process and a generous profit split scheme where you receive 100% of the first $25,000 per account and 90% thereafter.

Features FEATURES:

Apex Trader Funding offers 2 types of futures trading plans: Rithmic plans or Tradovate plans.

All plans in evaluation mode include a free NinjaTrader license (monthly or life time fee in paid/funded accounts) and access to real-time data at no cost.

  • Rithmic plans range from an initial capital of $25,000 to $300,000 and the monthly subscription price ranges from $147 to $657 (although this is often significantly reduced with the discount codes usually provided by this prop firm).
  • The Tradovate plans also range from an initial capital of $25,000 up to $300,000 and the monthly subscription price is slightly higher than the Rithmic plans and ranges from $167 to $677 (and is also often greatly reduced with the coupon codes offered by Apex Trader Funding which you can check on our website).

The evaluation consists of a single step. The profit target varies slightly from account to account but is usually around 6%. There is usually a minimum of 7 trading days and you can trade on holidays and during the news from 6 PM one day to 5 pm the next day. Trades must be closed by 4:59 PM ET. There is no daily drawdown (you must only comply with the Trailing Threshold).

With Apex Trader Funding you will receive 100% of the first $25,000 per account and 90% of the profits you generate above that amount. You can receive 2 payments per month and trade multiple accounts simultaneously up to a maximum of 20. You can also reset any demo account as many times as you like at a reduced price.

Apex Trader Funding offers a wide range of futures (from exchanges such as CME, CBOT, NYMEX, EUREX, ICE) to trade indices, bonds, currencies, cryptocurrencies, commodities, metals, agricultural products, energy,…

You can check all the details at https://atf.com

Cons CONS:
  • Only offers futures trading.
  • No leverage available.
  • The evaluation process involves a monthly recurring payment.
Pros PROS:
  • Generous profit split scheme: 100% of the first $25,000 and 90% thereafter.
  • Good reputation (4.8 points out of 5 on Trustpilot with more than 6000 reviews).
  • 1-step challenge.
  • Simple Trading Rules. No Daily Drawdowns. Trade any strategy that best suits you.
  • No scaling requirements.
  • Free NinjaTrader license in evaluation and free real-time data included.
  • Coupons and offers are often available that significantly reduce the price.
80%
OFF
Coupon

80% Off Coupon Code of any size Evaluation Account on Apex Trader Funding

Also One Day To Pass Eval and Half Priced Resets

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Expires on: 05/01/2024

Read more about the Apex Trader Funding Coupon Code

Open Account

Funded Trading Plus

Funded Trading Plus

Funded Trading Plus is a prop firm based in London, United Kingdom. It is a brand owned by FTP London Ltd founded in 2021 as an extension of Trade Room Plus, a live trading and training room with a track record of several years since its inception in 2013.

Funded Trading Plus provides a wide range of funded accounts with different modes to suit a variety of trader profiles: single-phase evaluation, two-phase evaluation or a no evaluation program where you can manage a funded account from day one.

The conditions vary slightly from one plan to another, but in general it is a versatile proprietary trading firm, with simple trading rules, no maximum or minimum time limits, with a profit sharing system that starts at 80% for the trader and can go up to 100% after exceeding a profit percentage of 30%. The scaling program means that your balance increases every time you reach 10% profit and you can trade a simulated account of up to $2,500,000.

Funded Trading Plus is also rated 4.9 out of 5 according to customer reviews on the Trustpilot portal, one of the highest in the industry.

Features FEATURES:

Funded Trading Plus offers 4 programs:

  • Experienced Trader Program: This is a one-step evaluation programme. The profit target is 10% and the risk rules you must not violate are a maximum daily loss of 4% and a maximum total loss of 6%. Account balances available range from $12,500 to $200,000.
  • Advanced Trader Program: This is a two-step evaluation program. The profit target is 10% in step 1 and 5% in step 2 and the risk rules are a maximum daily loss of 5% and a maximum total loss of 10%. Account balances available range from $25,000 to $200,000.
  • Premium Trader Program: This is also a two-step evaluation program. The profit target is 8% in step 1 and 5% in step 2 and the risk rules are a maximum daily loss of 4% and a maximum total loss of 8%. Available account balances range from $25,000 to $200,000 and the price to access the funded accounts in this plan are slightly higher than Advanced.
  • Master Trader Program: This is a no evaluation or challenge program. It offers instant funding from the start. There is no profit target. The risk rules are a maximum daily loss and a maximum total loss of 6% in both cases. Available account balances range from $5,000 to $100,000.

Details are available at https://www.fundedtradingplus.com

In all Funded Trading Plus plans:

There are no minimum or maximum trading days. Here you can see a comparison table of the best prop firms with no minimum trading days.

Profit split on your funded account is 80% by default, 90% on reaching a profit of 20% and 100% on reaching a profit of 30%.

The maximum leverage level is 1:30.

The scaling plan allows you to increase your account balance up to $2,500,000 every time you reach a profit of 10% (except in the Advanced Trader Program where you must reach 20%).

You can use EAs. There are no restrictions on trading strategies. In some of the plans you can keep positions open during weekends and in some of the plans stop losses are required.

You can withdraw funds from the first day (except in Premium Trader Program where there is a minimum of 7 days) as long as the request exceeds $50 and thereafter request weekly withdrawals.

The access fee is fully refunded in any plan, except in the Master program without evaluation, once you reach 10% profit.

Funded Trading Plus currently works with 2 regulated online brokers such as ThinkMarkets and EightCap and allows trading on a wide range of Forex currency pairs, indices, commodities and major cryptocurrencies.

Funded Trading Plus offers good quality and fast customer service, especially through its online chat.

Cons CONS:
  • The prices of the evaluation programs are slightly higher than other prop firms with similar characteristics.
  • Low leverage of up to 1:30.
  • Discount coupons are generally not applicable to the Master programme without evaluation.
Pros PROS:
  • High profit sharing percentage: 80% to 100% for the trader.
  • Programs for all types of traders: 1 or 2 step evaluation or instant funding without evaluation.
  • No time limits. No maximun or minimum trading days.
  • Increase your balance every time you reach 10% profit up to $2,500,000.
  • One of the best rated prop firms in the industry (4.9 out of 5 on Trustpilot).
  • You can withdraw your profits every 7 days.
  • Access fee is fully refunded (except in the Master program) once you reach 10% profit.
10%
OFF
Coupon

1O% Off Coupon Code on all evaluation accounts of Funded Trading Plus (not available for instant funding program)

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Check out this article on how to apply Funded Trading Plus coupon code.

Open Account

FTUK

FTUK

FTUK (Forex Traders UK) is a prop firm founded in February 2021 with headquarters in London, United Kingdom. It is a prop trading firm not as well known as Topstep or FTMO but it enjoys good user reviews and is trusted by a large number of traders around the world.

It offers an scaling plan based on 7 levels with a profit split scheme that starts at 50% at the lowest level, rises progressively and reaches 80% at the highest level. Your funded account balance also increases at each level and can reach up to $5,760,000.

FTUK allows any trading strategy like scalping, hedging, EAs (view comparison of best prop firms that allow eas),… There is no time limit for the duration of trades, you can keep trades open on weekends, you can trade news events and there is no minimum number of trading days in any of the programs.

Features FEATURES:

FTUK offers two different programs: Evaluation and Instant Funding.

In the Evaluation program the one-time access fees (no recurring monthly payments) to a funded account are slightly lower than in the Instant Funding program, but you start on a demo account and must reach the profit target to move to a live account.

In the Instant Funding programme you start directly on a funded live account and can make profits from day one.

The trading rules are quite simple. You can see them on the https://www.ftuk.com website.

Cons CONS:
  • FTUK’s profit sharing scheme is somewhat lower than other prop trading firms. It starts at 50% for the trader and can go up to 80% at the last level of the scaling plan.
  • At level 1 you start with a fairly low balance (between $3,500 and $22,500 depending on the account chosen) and must move to level 2 to manage between $14,000 and $90,000.
  • The one-off access fee for FTUK accounts is non-refundable after passing the evaluation.
Pros PROS:
  • Simple trading rules.
  • Rapid scaling plan with 7 levels.
  • You can choose between an evaluation program (more cheaper) or instant funding without evaluation.
  • All trading styles are welcome. Hold trades over weekends. No minimum trading days.
  • Withdraw profits anytime from level 2.
  • Good trader support by phone, email or online chat.
  • One-time fee. No recurring monthly payments.
30%
OFF
Coupon

30% OFF SPECIAL OFFER on FTUK

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Expires on: 04/27/2024
5%
OFF
Coupon

5% Off Coupon Code on FTUK

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Find out the terms and conditions of the FTUK discount code here.

Open Account

What is Prop Trading?

The definition of proprietary trading, or prop trading, refers to the trading operation that a company carries out with its own capital in order to obtain profits rather than with the capital of its clients.

In this context, the figure of the independent trader who manages the capital of the prop trading firm arises. The trader trades all kinds of financial instruments such as currencies in Forex market, stocks, bonds, commodities, indices or cryptocurrencies with the prop firm’s money, rather than with his or her own money, in order to make a profit that is usually shared between the proprietary trading firm and the trader.

This way of working has grown significantly in recent years thanks to the advance of new technologies, the emergence of online brokers and the possibility that anyone can trade in the financial markets from anywhere in the world at any time simply with an internet connection and a computer or mobile device.

There are many traders around the world, in countries such as the United States, United Kingdom, Nigeria, India, South Africa, Italy, Canada, Germany, Australia, Malaysia, Singapore, Indonesia,… who have developed profitable trading strategies but lack the capital necessary to generate significant profits to be able to engage in this activity on a full time basis.

This is where prop trading provides a funding solution for these traders to maximise their profits: It is much easier to reach profits of say $2,000 per month with a $50,000 or $100,000 account than trying to reach those same profits from scratch with a $100 or $200 account.


What is a Prop Trading Firm?

The Proprietary Trading Firm is the one that provides the necessary capital to the trader to trade in the financial markets and earn money for them in exchange for a percentage of the profits. Moreover, it is this prop firm that assumes any losses, as the trader does not risk his own capital at any time.

How proprietary trading firms work?

But there is a catch. In order to access a funded trading account, the trader must assume the initial payment of a certain amount and, in very rare cases, none at all. Prices depend on each firm and usually on the amount of balance available for trading. Some proprietary trading firms charge a monthly fee (subscription) and others a one-off fee that may sometimes be refundable (Here you can see a comparison table of the cheapest prop firms).

Most prop trading firms require you to pass a challenge so-called evaluation phase. This basically means that they will have set a profit target, loss limit, etc., which you will have to meet before you can move on to managing a live account. Once you prove to them that you know how to trade and can be profitable, then they will let you trade with their capital and refund any expenses in the process that you have incurred before (again it depends on the firm). But some firms will not bother you to go through the evaluation step, but will let you manage their capital once you pay the one-off fee or subscribe on a monthly basis: are those known as instant funding prop firms.

All prop firms use a more or less strict set of rules and tools to avoid a high level of risk or incurring large losses. They usually impose a series of requirements such as placing stop loss orders at a certain maximum distance, daily loss limits, overall account loss limits, maximum position sizes, maximum number of open positions, impossibility to use certain strategies or to keep open positions during the weekend,…

For success in this activity it is essential that you carefully read and understand the trading rules of your proprietary trading firm. The quickest way to lose your initial fee and have a bad experience with a prop firm is to break any of the rules and see your account closed.

You should also choose carefully the prop trading firm you work with. There are many such prop firms and new ones popping up every day with aggressive offers and a professional appearance but many are not aligned with the interests of their traders but instead try to profit from access fees and entangle you in an evaluation process that is either impossible to pass or full of traps.

How do prop trading firms make money?

These proprietary trading firms online make money in 2 main ways:

  1. Through the profit split scheme of the traders’ operations (we can find from prop trading companies that keep 50% of the profits to those that give up to 90% and keep only the remaining 10%).
  2. By charging fees for access to their funded accounts, which tend to be higher the higher the balance you want to have available in your trading account. Depending on the company, these fees can be monthly (recurring) or a one-off payment. In some cases the fee may be refundable once you have passed the evaluation process.

What is the Best Prop Trading Firm to use?

At 5bestproprietarytradingfirms.com we will try to help you find the best prop firms on the market. Based on my wide experience in this sector and the user reviews I have read, I have been testing and analysing in depth a multitude of proprietary trading firms over the last few years.

In the best prop trading firms comparison table at the top of this page you can see the ones that I consider to be the most reliable, have a proven track record and a good reputation. You can also see the main features of each of them and I recommend that you visit their official websites for full details of their offers. I hope you find this information useful and that you can find the best prop trading company for you that will provide you with the capital you need to make money as a trader.


What are the Pros and Cons of Being a Prop Trader?

PROS:

Access to more trading capital: As a prop trader you are not limited to trading with your own money and can profit from trading higher amounts.

Lower risk: You don’t risk your own capital as these companies require no capital contribution from the trader but you must worry about being consistently profitable or the prop trading firm will no longer allow him to manage his capital.

Lower commissions: Commissions and fees are usually lower than when trading individually due to the agreements these prop firms have with the brokers they work with.

Remote trading: One of the advantages of prop trading is that you can work remotely from home or anywhere in the world. Proprietary trading firms remote allow you to trade without having to go to an office and to choose the trading hours that suit you best.

Training: Many firms invest their resources in training and improving the trading skills of their traders as they rely on their success to increase their own profits.

CONS:

Experience required: To be successful you must have a good, consistent and low-risk trading strategy in place.

Initial payment and evaluation: In most prop trading firms you have to make a payment to access your funded account and pass a challenge or evaluation process that proves you are profitable before you move on to manage the prop firm’s capital in a live account.

Need to maintain long-term profitability: If you make losses or break the proprietary trading firm’s risk rules, your account will be terminated.It doesn’t matter if you have a good track record or if it was just a bad run. You will have to start over or change of prop firm.


How to Select a Proprietary Trading Firm?

It is very important to choose the right Prop Trading Firm to avoid wasting time and money.

These are the factors that I consider most important:

Factor 1: The reputation of the prop firm.

Beyond the percentage of profits or the capital that the prop trading firm makes available to you, the most important thing is to work with a reliable and professional company.

A proprietary trading firm with great profits on paper is worth little if it doesn’t pay you your share of the profits or disappears from one day to the next.

I tend to look at the opinions of other users about a particular prop firm. Even if I have personally tried it and had a good experience I like to keep up to date with the experiences of other traders and see their complaints or positive ratings to assess the commitment and level of service of the company.

It is important to look for well-reasoned reviews because it is often the case that, no matter how reputable they are, these types of prop trading firms always generate negative opinions. Many of the reviews are from disgruntled traders who usually have not even bothered to read the firm’s trading rules.

Factor 2: Profit sharing.

Although it is obviously the proprietary trading company that puts its capital at risk, it is the trader who must do all the work of having and maintaining a profitable strategy over time. It is therefore important that the percentage of profits he receives is high and that his daily work is rewarded.

It is essential that the prop trading company takes care of its profitable traders and makes them share most of the profits. I also consider prop trading firms that pay a percentage of profits during the evaluation process and those that reimburse the account access fee initially paid by the trader to be a positive aspect.

Factor 3: Simple trading rules

It goes without saying that the proprietary trading firm that puts up the money has a vested interest in establishing a set of rules to protect its capital, but this must be at odds with the fact that as a trader you can trade with comfort and a degree of flexibility. The fewer rules the less stress and the easier your day to day life as a funded trader will be.

There are prop firms with few rules (typically with daily loss limits and overall loss limits) and others that take it to the opposite extreme with limits on the size or number of positions, restrictions on leverage or financial instruments to be traded, impossibility to keep trades open at night or weekends, restrictions on certain trading strategies or operations in times of high volatility in the markets,….

I am particularly annoyed by those that do not provide clear information on all these rules.

Factor 4: Tradable financial instruments

Almost all prop trading firms are to a greater or lesser extent specialised in the Forex currency market, being also known as Forex prop firms, but I consider it important that they allow trading with other financial instruments such as futures ( you can find in this link a list of the best futures prop firms), cryptocurrencies (find out which are the best crypto prop trading firms here), commodities, stocks (best prop trading firms for stocks), indices, bonds,…

The more instruments available, the more versatile the prop firm is for the trader and the more options he has to execute his strategies, especially considering that certain strategies have more difficulties than others to get the right market conditions frequently. Being able to combine with other strategies in other instruments can be a must for some traders in such a demanding short and long term activity as prop trading.

Factor 5: Training and coaching

This is a business for traders with a certain amount of experience in which training or the tools provided by the proprietary trading firm are not usually valued at first glance, but rather the previous factors are given much more weight.

But I think it is still important to analyse the resources that the prop firm puts at the trader’s service because investing in these aspects shows a strong commitment and a clear alignment of interests between both parties.

There are proprietary firms that develop really interesting resources to analyse trades, improve performance, better control risks,… Others even opt for personal coaching sessions with their best traders.

Factor 6: Customer service

As with the previous factor, a proprietary trading firm’s resourcing of its customer service department is important and shows its commitment to quality and level of service.

There is nothing more frustrating than having a question or problem and not being able to resolve it in a timely manner or not getting the right response.

Before opening an account with any prop firm I usually ask their customer service department several questions usually via online chat and also by email to see the response times and information they provide.

Once you have found the right firm for you we recommend that you visit our section of Prop firms discounts to find the best promotions and coupon codes to reduce the access fees.


Is Prop Trading Legal and Regulated?

The activity of prop trading with funded trading accounts is legal but is not subject to a licence requirement or strict regulation as is the case, for example, when dealing with retail clients’ money in financial markets.

Proprietary trading firms are not brokers or financial agents and therefore avoid most international regulations.

In the case of brokers or agents who trade with client money, they must be regulated by the supervisory bodies of the countries where they are based or in which they offer their intermediation services. Examples of such regulators are the Security Exchange Commission (SEC) or the Financial Industry Regulatory Authority (FINRA) in the United States, the Financial Conduct Authority (FCA) in the United Kingdom, the Australian Securities and Investments Commission (ASIC) in Australia, the Financial Sector Conduct Authority (FSCA) in South Africa,….

Prop firms are limited to trading in the financial markets with their own funds and do not interact with retail investors or hold third party capital in custody. The terms and conditions with the traders who manage the funded trading accounts are private agreements between the two parties.

It is very common that even trades during the evaluation process are executed on a demo account and are not replicated in the market. Once the evaluation process is over, there are some prop trading firms such as FTMO that continue to keep the trader’s trades on a demo account and do not provide information on whether they replicate these trades in full or in part on a live account.

Most trade on live accounts after evaluation and there trading is usually done with internationally regulated brokers, the funds are kept segregated from the broker’s own funds and are only used to cover the trades that are made. In any case, the trader is trading with the proprietary trading firm’s money and not with his own. The risk to the trader is limited to the fee initially paid to open the account or that the company may go bankrupt due to poor risk management and he will no longer be able to continue trading with his capital.

That is why the prop firms we review and recommend here are the most reliable in the market, backed by the positive experience of thousands of traders, with solid track records, on-time payouts and currently enjoy a good reputation.


Eduardo Montero

Author: Eduardo Montero

I'm Eduardo Montero. Computer scientist by profession and passionate about online trading with more than 10 years of experience in the financial markets. I'm the author of hundreds of articles published in other websites about the online trading industry. Learn more about me here: About the author.


DISCLAIMER: All of 5bestproprietarytradingfirms.com contents posted on this web pages are based on "My" and "Our" opinions alone and are only for information purposes. You should not take any of this information as guidance for buying or selling any type of investment or security. "I","We" and "Us" are not a financial advisor and anything that have been posted here on this site should not be seen as financial advice. "I","We" and "Us" are only sharing biased opinion based off of speculation and personal experience. An individual trader's results may not be typical and may vary from person to person. It is important to keep in mind that there are risks associated with investing in the stock/forex market and that one can lose all of their investment. Thus, trades should not be based on the opinions and information of others that are put on the internet such as this page, but by your own research and due diligence. Any financial losses incurred will be at your own risks and the people behind this site will not be held responsible. The information about prop trading firms or Forex trading firms is indicative and has no contractual value and may be out of date or may not correspond to the current conditions of each company.