Trading with your own capital can be risky and limiting. That’s where prop trading firms come in. These firms allow skilled traders to use company funds to trade and share profits. The better you perform, the more capital you can manage. Choosing the right firm can make a big difference in your trading career.
Table of Contents
What is a Prop Trading Firm?
A proprietary trading firm gives traders access to the firm’s capital, rather than having to trade only with their own money. The trader shows they can trade profitably (and manage risk) through an evaluation or challenge. If they pass, they get funded and earn a profit split.
When choosing a prop firm, you should look at: evaluation cost, rules (drawdown limits, trade style restrictions), profit-split, payout speed, instrument availability (forex, futures, crypto), and the firm’s reputation.
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How Prop Trading Firms Work?
- Sign Up and Evaluation – You pay a small fee and complete a challenge to show consistent profits while following risk rules.
- Verification Stage – Some firms have a second phase to confirm your trading consistency.
- Funded Account – Once approved, you trade live funds and receive a profit split on your earnings.
Types of Prop Firms
Prop trading firms generally fall into two main categories. Both offer access to company capital but differ in how you qualify for funding.
- Evaluation-Based Firms – These firms require traders to prove their skills through one or two challenge phases before receiving live (e.g., FTMO, MyForexFunds).
- Instant Funding Firms – These firms let you start trading with a funded account right away, no challenge required. Instead, you pay a higher upfront fee e.g., FundedNext, E8 Markets).
- Hybrid Models – Some firms combine both options. They let traders choose between a challenge-based or instant funding program. This flexibility helps traders pick what suits their skill level and budget (e.g., FundedNext, FXIFY).
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Benefits and Risks
Benefits
- Access to large capital.
- Low personal risk.
- Professional growth and discipline.
- Opportunity to earn a consistent income.
Risks
- Strict rules and limits can lead to disqualification.
- No guarantee of success, skill, and psychology matter.
- Some firms may lack transparency, so do your research.
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10 Best Prop Trading Firms
1. FTMO
- FTMO is one of the most recognised and highly rated prop firms globally.
- Traders first complete a “Challenge” stage, then a “Verification” stage, and get access to a funded account.
- The firm allows scaling to larger account sizes after proving consistency.
- They offer up to 90% profit split on funded accounts.
- Pros: Strong reputation, clear process.
- Cons: Strict rules (risk management, loss limits), so you need good discipline.
2. The 5%ers
- Good for traders who want a slightly lower‐cost entry and long-term scaling.
- They offer account sizes up to multi-millions for successful traders and high profit shares.
- Strong emphasis on trader growth, community support, and educational material.
- Profit share up to 100% in some higher-level programs.
- Pros: Low entry cost (evaluation fee), good for growth.
- Cons: Some rules might limit very aggressive trading strategies.
3. Topstep
- Specializes in futures trading (rather than just forex).
- If you trade futures (rather than forex/currency pairs), this is one of the strong choices.
- They emphasize risk management: maximum loss limits, daily loss limits, and end-of-day drawdown measures.
- Pros: Strong reputation in the futures space.
- Cons: Less focused on forex/crypto, perhaps.
4. Funded Trading Plus
- Mentioned as a prop firm for accessible evaluation processes.
- Good option if you want a slightly simpler entry and fewer restrictions.
- Many programs have no minimum trading days, unlimited evaluation time (in many cases), and weekly withdrawals for funded traders.
- Pros: High profit splits for good performance and good scaling potential.
- Cons: May have less robust scaling or smaller maximum accounts compared to the top tier.
5. FundedNext
- Offers a modern model including both instant‐funding and challenge‐based programs.
- High trader reviews: strong praise for customer service, payout speed, and transparency.
- Pros: Flexible programs suitable for different styles and risk levels.
- Cons: Newer firms may carry slightly more risk (less longer track record).
6. E8 Markets
- Offers customizable evaluation parameters (account size, drawdown, profit target), allowing trader-tailored setup.
- Profit splits up to 100% claimed in some plans.
- Also a contender for traders who want a fast setup and minimal hurdles.
- Pros: Flexible options make it good for a variety of traders.
- Cons: Possibly fewer educational resources than more established names.
7. Goat Funded Trader
- GFT is a relatively new prop-trading firm that allows traders to access firm capital via various challenge types.
- A more trader‐friendly model: emphasizes less strict deadlines, more freedom (depending on plan).
- Pros: Good for traders who don’t want heavy pressure.
- Cons: Possibly higher fees, less established. Always check the fine print.
8. True Forex Funds
- True Forex Funds positioned itself as a prop-trading firm that allowed traders to access the firm’s capital once they passed certain evaluation rules.
- Their marketing also emphasized a “trader-friendly” dashboard, transparency, and quick payouts.
- Pros: Good flexibility in trading instruments, multiple asset types, and leverage options.
- Cons: Might require more self-discipline because of less structure.
9. FXIFY
- A prop firm that emphasizes good support, fast payouts, and strong customer feedback.
- Profit-split can go up to 90% of the profits for the trader.
- Pros: Good service and modern interface.
- Cons: As always, check rules and ensure you understand the payout mechanics.
10. Funding Pips
- Another option focusing on forex/trading platforms and evaluation processes.
- Flexibility in account sizes and scaling. Funded accounts can grow as you perform; instruments offered include forex, indices, metals, and crypto.
- Pros: Good alternative if you’re comparing different firms.
- Cons: Might have narrower instrument choice or a smaller community.
Conclusion
Prop trading firms have changed how traders grow in the financial markets. They allow skilled individuals to trade large accounts without risking their own capital. By choosing the right firm, you can turn your trading skills into a real income source.
Before joining any firm, always research its rules, payout system, and reputation. Focus on building consistency and managing risk, these matter more than quick profits.
Whether you prefer forex, stocks, or futures, there’s a prop firm that fits your style. Start small, stay disciplined, and use every opportunity to learn and improve. With patience and the right mindset, prop trading can open doors to a successful trading career.
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Do I need trading experience to join a prop firm?
Yes. Most firms require you to show consistent results during an evaluation. Beginners should practice on demo accounts first before joining a prop firm.
How much can I earn with a prop trading firm?
Earnings depend on your performance and the firm’s profit split. Many traders earn between 70%–90% of their profits from trades.
Are prop trading firms legal?
Yes. Prop firms are legal businesses that provide traders with funded accounts under specific rules and conditions.
Which is better — instant funding or an evaluation model?
If you want quick access to funds, instant models are better but cost more. Evaluation models are cheaper and suitable for those willing to prove consistency.
