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Eduardo Montero

Author: Eduardo Montero

Last Updated on March 4, 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 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
+
150%
BONUS
+
4%
CHALLENGE
PROFITS
Coupon

15% Off + 150% Bonus based on challenge fee awarded on 2nd payout + 4% Challenge profits from each phase's target profit awarded on 2nd payout on all programs up to 100K  of The Funded Trader

1st Payout: 85% / 2nd Payout: 90% / 3rd Payout 95% / 4th Payout and on 80%

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Expires on: 03/16/2024
15%
OFF
Coupon

15% Off Coupon Code on The Funded Trader

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UNLIMITED FREE RETRIES IN STEP 1 OF YOUR CHALLENGE.
15k balance for €99M
30k balance for €199M
60k balance for €299M
250k balance for €999P
500k balance for €1,899P
1m balance for €2,999P

M=Micro Trader
P=Pro Trader

Prices for Normal Mode
(Aggressive Mode Available)


  • Manage up to $2M from the start – No scaling plan required!
  • Receive 80% of profits (90% on Aggressive Mode).
  • One time fee, no recurrent charges. Refundable with your first payout.
  • 2 step evaluation. Unlimited free retries in step 1 (if you have positive balance and no drawdown violation).
  • News trading allowed. Hold positions overnight and weekends. EAs under authorization.
  • Withdrawals via bank transfer, PayPal, Skrill or Neteller.
  • Up to 1:100 Leverage (1:200 with add-on). +175 assets available to trade.
More info at https://fidelcrest.com
15%
OFF
Coupon

15% Off Coupon Code on Fidelcrest

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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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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
25%
OFF
Coupon

25% OFF SPECIAL OFFER on FTUK

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Expires on: 03/09/2024
5%
OFF
Coupon

5% Off Coupon Code on FTUK

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SCALE UP TO $5M. COMPETITIVE PROP FIRM.
10k balance for $99
20k balance for $179
50k balance for $399
100k balance for $999


Scaling plan up to $5,000,000
  • One-time 100% refundable fee after passing Level 1.
  • 1-step evaluation. Scale up to $5M and get up to 80% profit share.
  • You can withdraw profits at each level (processed every Friday).
  • 8% or 10% profit target depending on the account chosen.
  • 5% daily drawdown. 10% max trailing drawdown.
  • No news trading, no high-frequency, no copy-trading. EAs and scalping allowed (more than 1 minute).
  • 1:30 Leverage. Multi-asset: Forex, Futures, CFDs, Indices, Commodities, Stocks and Crypto.
More info at https://www.thetradingpit.com

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 $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
15k balance for €99M
30k balance for €199M
60k balance for €299M
250k balance for €999P
500k balance for €1,899P
1m balance for €2,999P

M=Micro Trader
P=Pro Trader

Prices for Normal Mode
(Aggressive Mode Available)
80%
(90% in Aggressive Mode).
Micro Trader: 10% for Phase 1 and 5% for Phase 2.
Pro Trader: 10% for Phase 1 and 2.
5% Maximum daily loss.
10% Maximum loss.
60 days.
Forex, Indices, Metals, Commodities and Stocks.
Up to 1:100 (1:200 with add-on)
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
$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
10k balance for $99
20k balance for $179
50k balance for $399
100k balance for $999

Scaling plan up to $5,000,000
50% to 80% (depending on the account chosen and the level of scaling plan).
8% or 10% (depending on the account chosen).
5% (Daily drawdown).
10% (Max trailing drawdown).
90 days.
Forex, Futures, CFDs, Indices, Commodities, Stocks and Crypto.
Up to 1:30

Top Proprietary Trading Firms

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:
  • The Funded Trader does not offer a free trial.
  • 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
+
150%
BONUS
+
4%
CHALLENGE
PROFITS
Coupon

15% Off + 150% Bonus based on challenge fee awarded on 2nd payout + 4% Challenge profits from each phase's target profit awarded on 2nd payout on all programs up to 100K  of The Funded Trader

1st Payout: 85% / 2nd Payout: 90% / 3rd Payout 95% / 4th Payout and on 80%

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Expires on: 03/16/2024
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

Fidelcrest

Fidelcrest

Fidelcrest is a proprietary trading firm headquartered in Nicosia, Cyprus, founded in 2018. It is a brand already consolidated in the prop trading sector that positions itself as an alternative with years of experience compared to other competitors with less track record.

One of the main differences of Fidelcrest is that you can start from the beginning managing a $2M account avoiding the complex scaling systems with several levels that other prop firms have. Its profit sharing scheme is one of the most attractive: 80% of profits for the trader in normal mode or 90% in aggressive mode.

Check my Fidelcrest review.

Features FEATURES:

Fidelcrest offers 2 types of accounts:

On the one hand there are the Micro Trader Accounts with balances ranging from $15,000 to $60,000 and with more affordable prices (from €99 for the $15,000 balance account).

In all of them there are 2 modes to choose from:

  • The Normal Mode with a Max Daily Loss of 5% and a Max Loss of 10%.
  • The Aggressive Mode in which the risk levels are multiplied x2 (Max Daily Loss of 10% and a Max Loss of 20%) being one of the highest we can find in the main prop trading firms. On the other hand, the Aggressive Mode accounts have a higher access fee and higher profit targets.

On the other hand, there are the Pro Trader Accounts with balances, larger than the Micro Trader accounts, ranging from $250,000 to $1,000,000 from the start (without the need for an escalation programme). The access fees are also higher than the Micro Trader accounts.

In this case we also have 2 modes to choose from: Normal Mode and Aggressive Mode with the same risk parameters as in the Micro accounts.

In both account types there are no minimum trading days to move to the next stage of the challenge or to the funded account. In each of the 2 steps of the challenge, the maximum period is 60 days.

Once you have passed the challenge, the profit target disappears and you will receive your first payment after 11 trading days with a refund of the access fee. If you have chosen Normal Mode you will receive 80% of the profits you generate and if you have chosen Aggressive Mode you will receive 90%.

Fidelcrest offers several add-ons in exchange for increasing the price of the access fee. For example, there is an add-on that allows you to double the available leverage up to 1:200, another one is an insurance that allows you to receive a new challenge if you fail at any stage of the challenge or if you already have access to a funded account. Finally, there is another one that allows you to double your capital after passing the challenge.

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

Cons CONS:
  • If you want to use Expert Advisors, you must request a review from Fidelcrest.
  • Offer of instruments available for trading (+175) somewhat more limited than other prop firms.
  • There is a significant gap between Micro Trader and Pro Trader accounts in terms of both available balance and access fee prices.
Pros PROS:
  • Keep 80% of profits (90% on Aggressive Mode).
  • Up to $2m capital from the start without complex scaling plans.
  • 2 step evaluation. Unlimited free retries in step 1 if you have positive balance and no drawdown violation.
  • 2 Modes to choose from (Normal and Aggressive). Max Daily Loss of 10% and a Max Loss of 20% in Aggressive mode.
  • Fidelcrest is a proprietary trading firm with experience since 2018.
  • News trading allowed. Hold positions overnight and weekends. No stop loss required.
  • One time fee, no recurrent charges. 100% Refundable with your first payout.
15%
OFF
Coupon

15% Off Coupon Code on Fidelcrest

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Read more about the Fidelcrest promo code.

Open Account

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

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.
25%
OFF
Coupon

25% OFF SPECIAL OFFER on FTUK

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Expires on: 03/09/2024
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

The Trading Pit

The Trading Pit

The Trading Pit is a prop firm, founded in 2021, based in Lichtenstein and offices in Cyprus, Spain, and Canada. Despite its short history it is growing strongly thanks to the advantages it brings to its users such as its one-step evaluation process, the possibility to make your account grow up to $5,000,000 with no capital contribution and a sharing scheme where the trader keeps from 50% to 80% of the profits (depending on the account chosen and the level of scaling plan).

The Trading Pit’s business model is a bit different from other prop trading firms. The prop trader works on a demo account at all times, both in the challenge and during the scaling plan. When you pass the challenge you will sign a signal provider agreement with the company allowing The Trading Pit to copy your trades into their corporate account. This prop firm introduces its traders to the asset management, hedge fund and certificate industries in order to help them build a successful career.

From the first level of escalation you will start earning and growing your account keeping up to 80% of the profits.

The Trading Pit has a rating of 4.8 out of 5 according to customer reviews on the Trustpilot portal.

Features FEATURES:

The Trading Pit offers 4 packages, the most basic is the Lite ($10,000 account balance and $99 acess fee).

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

The payment to access the challenge is a one-time payment, it is not a recurring monthly payment.

The profit target for passing the audition is 8% or 10% profit target depending on the account chosen.

There is a minimum of 3 trading days and a maximum duration of 90 days. If you prefer, here you can see a comparison table of the best prop firms with no minimum trading days.

The main rules to follow are:

  • Daily drawdown: 5%.
  • Maximum trailing drawdown: 10%.

With this proprietary trading firm you can use Expert Advisors and Scalping (positions must remain open for more than 1 minute). You can also keep your positions open during the weekend.

News trading (2 minutes before and after events), high frequency trading and copy trading are not allowed.

You can request withdrawal of your profits as soon as you hit the profit target of your current level of the scaling plan.

In a very short time you can receive your first profit withdrawal (at The Trading Pit they are processed every Friday): the challenge phase can be passed in just 3 days and if you reach the level 1 profit target you will be able to withdraw the following Friday.

The Trading Pit offers good quality and fast customer service, especially through its online chat.

Cons CONS:
  • The Trading Pit does not offer a free trial.
  • Short track record (started as prop firm in 2021).
  • You always work on a demo account and once you pass the challenge you sign an agreement to allow The Trading Pit to copy your trades.
  • Some trading strategies are restricted or have limitations.
Pros PROS:
  • Fairly high profit sharing percentage: 50% to 80% of the profits (depending on the account chosen and the level of scaling plan).
  • You can withdraw profits at each level.
  • Scale your account up to $5,000,000.
  • 1-step challenge.
  • Fast profit withdrawals (processed every Friday).
  • You can choose from several brokers and multiple financial instruments (Forex, Futures, CFDs, Indices, Commodities, Stocks and Crypto).
  • One-time 100% refundable fee after passing Level 1.

Sorry, no coupons/deals found.

Check out this article on how to apply The Trading Pit discount coupon code.

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.


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.


What are the risks of prop firms?

While prop trading offers traders the opportunity to access capital and resources that would not otherwise be available, it is essential to be aware of the associated risks. Prop traders do not put their capital at risk (although they usually have to pay an access fee to access an evaluation process to demonstrate their skills and this fee is lost if the challenge is not passed).

In addition, prop firms often have specific trading strategies, rules or objectives that traders must follow. Deviating from these guidelines can result in the closure of the funded account. It is critical that aspiring prop traders have a thorough understanding of the company’s terms, conditions and risk management practices before committing to a partnership.


What is the difference between a prop firm and a broker?

Proprietary trading firms, commonly known as prop firms, are unique entities that engage in trading using their own capital. They hire traders to execute trades on their behalf, and these traders can benefit from the firm’s resources, technology, and expertise. Unlike individual traders, prop traders have access to larger amounts of capital, enabling them to take on potentially larger positions and capture more significant market movements. In return for these resources, prop traders share a portion of their profits with the firm.

On the other hand, brokers serve as intermediaries between traders and the financial markets. They facilitate the execution of trades by connecting traders to various markets and liquidity providers. Brokers do not use their capital for trading but rather provide access to trading platforms, market data, and execution services. In order to trade in the financial markets you must deposit your own capital in your account with your broker or in the case of proprietary trading firms it is the company’s own capital that is deposited and the broker is responsible for executing the trades requested by the prop trader.


Do prop traders make money?

The potential for earning money as a prop trader exists, but success is not guaranteed. Profits generated by prop traders are typically shared between the trader and the prop firm, often following a predetermined split. The trader’s ability to make money depends on their trading skills, market knowledge, and risk management strategies.

Successful prop traders exhibit a combination of discipline, analysis, and adaptability. They must be able to navigate various market conditions and adjust their strategies accordingly. It’s worth noting that prop trading is not a get-rich-quick scheme; consistent profitability requires dedication, continuous learning, and a solid understanding of market dynamics.

We hope that the prop firm comparisons and information on our website will help you to succeed as a prop trader.


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.