Finding the Right Prop Trading Firm: More Than Just Cheap and Easy (2024)

FAQs

How do I choose a prop trading firm? ›

Before joining a forex prop firm, traders should consider factors such as regulation, reputation, funding options, costs, trading rules, technology, support, profit split, risk management, performance, and compatibility with their trading goals.

Funder Trading stands first in our list of the top prop trading firms in 2024 due to multiple reasons but notably it is the only prop trading firm that offers options funding and includes coaching for every trader signed up.

Compensation for Prop Firm Traders

Base salary: Most prop trading firms offer their traders a base salary, which is usually paid on a monthly or annual basis. This salary can range from $50,000 to $100,000 for junior traders and can go up to $500,000 or more for senior traders.

Who are FTMO Top Competitors? FTMO 's top competitors in June 2024 are: FunderPro, the5ers and more. FunderPro is currently rank as the number one on the list of top Forex Prop Firms.

According to it, 4% of traders, on average, pass prop firm challenges. But only 1% of traders kept their funded accounts for a reasonable amount of time. While this result is not nearly as bad as the one discussed earlier, it still looks bleak for prospective prop traders. But why is the percentage of failure so high?

Among many other potential factors, the main disadvantages of prop trading arise from being classified as a market professional, unfavorable profit sharing, and whether your net trading profits are taxed as capital gains or ordinary personal income.

Topstep is that firm. During their 10 years in the prop trading business, Topstep has become a trader favorite for a number of good reasons. They fund thousands of traders and pay out millions of dollars in trading profits every month.

How much money to start a prop trading firm? ›

Some prop firms may opt to be regulated which puts costs significantly higher. One should expect to pay a one time fee of around $10,000 for company registration and payment options while regulation involves a minimum budget of $75,000.

Passing a prop firm challenge requires a combination of skills, knowledge, and discipline. It is crucial to have a well-defined trading strategy, stick to the rules of the challenge, and not rush through it.

In conclusion, it can take around 4-5 months to pass a prop firm trading challenge and become a funded trader. However, it can take much longer than that to become a profitable trader beforehand – which is a necessity.

One way to start prop trading without paying a dime is to enter trading contests, where you can compete with other traders and show your skills. These are great opportunities to test your trading strategies, get feedback, and win prizes. Monitor or research different prop firms to see who offers this opportunity.

Prop trading is one of the most lucrative activities as the money you earn is determined by a profit-sharing ratio. Unlike brokers, for instance, which generate money from commissions or spreads, the prop firm benefits from directly trading or investing in the market.

The Costs of Prop Firm Regulation & Company Registration

Some prop firms may opt to be regulated which puts costs significantly higher. One should expect to pay a one time fee of around $10,000 for company registration and payment options while regulation involves a minimum budget of $75,000.

It is typical to move from an 80/20 split to a 90/10 split or from a 50/50 split to a 25/75 split. The percentage of profits that a prop firm takes can vary, but it is usually somewhere between 10-50%.

Becoming a funded trader with a prop firm involves showcasing your trading skills and adherence to risk management during an evaluation process. While the difficulty can vary, it's achievable with consistency, dedication, and a solid trading approach.