Introduction
For those looking to take up trading as a career but lack sufficient funds, prop trading can be the solution. This is one of the best methods to enter the trading industry. For many who wish to avoid the 9-to-5 corporate life, it has changed their lives forever. Let’s understand what it is and how you can start it right.
So, What is a Prop Firm?
A prop firm—short for proprietary trading firm—is a company that provides you the funds and lets you trade in a funded demo account instead of using your own funds. It’s like a partnership: you get access to the funded account, make profits, take a bigger piece of that pie, and share the smaller piece with the prop firm. But here’s the catch: these firms aren’t just handing over accounts to anyone. They want the best. Prop traders must prove their skills through challenges and make profitable trades while sticking to the firm’s risk rules. But when do you succeed? You get the funded account and after trading you get a nice chunk of the profits.
In proprietary trading, you’re using the firm’s money in terms of a funded account, not your funds, to make trades. So, think of it like this: you’re trading with a prop firm, and they reward you for your success by giving you a bigger share of your profits.
How Does Prop Trading Work?
Here’s the deal: as a prop trader, you get to trade various instruments—stocks, forex, crypto, and more in your funded account, depending on the instruments offered by your prop firm. You can choose among the profit split options offered by your prop firm. Usually, this split ranges between 50-90%, depending on the firm and your performance. For example, a forex prop firm might offer a 75% profit share.
One of the coolest things about trading with a proprietary trading firm is that you don’t have to risk your own money. All you need is your skill. And with firms offering MetaTrader 5, cTrader, and DxTrade, you’ve got access to some of the best trading platforms out there to make those profitable trades.
What’s the Career Path for a Prop Trader?
1. For Aspiring Traders
If you're new to the world of prop trading, there are lots of opportunities to get your feet wet. Firms like FTMO and Hola Prime offer trading programs that help you prove you’ve got the chops before you’re handed the funded accounts. You’ll go through an evaluation process where you’ll have to hit specific profit targets while managing your risk. If you make it through successfully, you’ll be rewarded with a funded trading account, where you can start making trades with the firm’s capital.
These firms are perfect for people who might not have much capital to start with but are serious about becoming experienced traders. They’ll give you a taste of real-world trading while helping you sharpen your skills.
2. For Experienced Traders
For those who’ve been around the block, prop trading can be a dream come true. Once you’ve got experience, many firms give you more flexibility to trade how you want. You can focus on your trading style—whether that’s scalping, day trading, or swing trading—without worrying about the financial risk.
Trading Prop firms like Hola Prime, Funded Next, and Alpha Capital Firm are known for working with experienced traders who want to grow in the long term.
The good news? The more consistent and profitable you are, the earlier the firm will trust you with larger accounts and help you scale up.
The Role of a Prop Trader
When you’re a prop trader, your job is simple: make profitable trades in your account. But there’s a catch—you have to follow their risk management rules. Firms are not in the business of losing money, so they set limits on how much you can lose each day or overall. For example, a forex prop firm might limit your losses to 5% of your account balance, in case of a balance-based drawdown.
This doesn’t mean you can’t take risks, but you’ve got to be strategic. Success comes down to a mix of discipline, strategy, and timing. And of course, if you’re good at it, the profits can be substantial. But remember—becoming a skilled funded trader isn’t something that happens overnight.
Top Prop Trading Firms to Consider
So, you’re sold on the idea of prop trading, but where do you start? There are a few solid prop firms you should consider, especially if you’re looking for a good trading experience with a prop firm with a good track record like access to funded accounts and solid profitsharing deals.
1. Hola Prime
If you’re into forex prop trading, Hola Prime is a great choice. This firm is known for offering the fastest payouts, a scaling plan that helps you grow your account up to $4 million as you prove yourself, and a profit-sharing model of up to 95% without any extra fees—one of the best in the business. With trading platforms like MetaTrader 4, cTrader, DXTrade, Match Trader, and MetaTrader 5 along with educational resources and Daily price transparency reports, you can trade using top-tier tools and make decisions based on reliable data.
2. FTMO
For many traders, FTMO is one of the most famous names in prop trading companies. They have a structured evaluation process that’s tough but fair. You’ll need to prove yourself with consistent profits before you can access a funded trading account, but once you pass, you’ll get the chance to trade with a huge amount of funds. They also offer a great profitsharing agreement of up to 80% and give traders access to, MetaTrader 4, DXTrade, MetaTrader 5, and cTrader.
3. Funded Next
The next option is Funded Next. They have a 24-hour payout policy, in which your payout requests are processed within 24 hours. They also offer a scaling plan of up to $4 million that can help you increase account size with time. In addition to this, they offer MT4, MT5, and ctrader to their traders.
4. Alpha Capital Firm
Alpha Capital Firm works together on a flexible and impressive profit-sharing plan and provides a great evaluation process. It does not matter whether you are an active trader or merely exploring opportunities; this firm offers something for you. They have incorporated tools and platforms like cTrader, DXTrade, and MT5 for their traders. You will be able to easily grow your trading account up to $2 million with the scaling plan as you prove yourself.
Tools You Need to Succeed
Having the right trading platform is key to succeeding as a proprietary trader. Many proprietary traders prefer advanced platforms like MetaTrader 5, cTrader, and DxTrade. These platforms boast optimal charting options, offer fast executions, and have powerful tools that enhance decision-making in the market.
Another essential tool is the economic calendar. Other events necessary for market analysis include the Forex Factory news calendar and the Trading Economics Calendar which allow you to intercept the most crucial events of the market and tailor your tactics around them.
Is Prop Trading Right for You?
So, is prop trading your ideal career? Here are a few things to consider:
• Discipline: You need to stick to risk rules and avoid the temptation to go wild.
• Patience: Success doesn’t happen overnight. It takes time to pass the evaluation process and prove your trading abilities.
• Adaptability: Markets change all the time, so you’ll need to adjust your trading style as needed.
Confidence: Trust in your strategy and your ability to adapt to the markets.
If you’ve got the passion and skill set for trading and want to skip the hassle of risking your capital, prop trading might be the perfect path for you. With prop firms like Hola Prime, FTMO, and Funded Next, there are plenty of opportunities to grow your skills and scale your profits.
Whether you’re just starting or an experienced trader looking to take your game to the next level, prop trading offers a unique and rewarding career. So, take the plunge, find the right prop firm that offers advanced trading platforms, and start building your future as a proprietary trader!