What are Best Prop Firms? Proprietary trading firms, also known as Prop firms, are entities that provide the trader with the capital to trade financial markets in exchange for a fraction of their profits. The firm enables traders to access large amounts of capital without putting their own at risk but essentially deals with performance and risk management. Traditionally, traders would have to undergo some form of assessment in order to prove themselves before allowing access to the firm’s capital.
Why Choosing the Right Prop Firm is Important
In the year 2024, the prop trading landscape has turned quite competitive and variant. Firms nowadays vary greatly in profit split, trading tool availability, and even their risk management rules. The reason choosing the correct prop firm is so important is that it may have a great effect on the trader’s success.
This can be dictated by a number of factors including, but not limited to, available capital, fee structure, regulatory transparency, and firm support systems. Going forward into the evolving trading platform arena with ever-changing market conditions, it becomes important that traders position themselves with the right firms matching their goals, while promising traders a sound platform for profitability.
How to Choose the Prop Firm?
Choosing the best proprietary firm is actually the first success towards trading. Some of the things that one has to look at include:
Reputation
One of the important things a trader has to consider is a firm’s reputation. This is because the reputation of the firm will determine a person’s financial success, in addition to keeping promises. For example, a company can boast of an outstanding offer with an extremely high drawdown, a low profit target, and a significant profit share. They fail to deliver on all of these promises. Reviews on YouTube and TrustPilot are some of the best forms of third-party verification one may have of the reputation the company boasts.
Also, check out the background operation and operational history. Mainly go for a company that has been in business for more than three years. Many prop companies have filed for bankruptcy after operating for about a year; therefore three years in operation gives them an upper hand on knowing what they are doing .
Basic Prop Account Conditions
Before investing in the account, know all the basic conditions for an investment to clear out the blurred lines. Do not concentrate on just the financial aspect but look at how the profits are divided, what the maximum draw-back is, at what target profit it is, and under what conditions the profit can be withdrawn.
You will have to analyze them and apply proper scaling techniques to see if their restrictions are reasonable and fair. Afterwards, before getting stuck in an extremely lucrative profit-sharing scheme, find out if the company pays its traders and prove they pay them.
You also have to know of the risk you can take when choosing the best prop trading company.
Additional Services of Trader
Top prop firms give so much more than just trading. The companies provide traders with additional options such as expert-led training, educational material, access to subscriptions to leading trading platforms amongst other software. The non-reputable firms do not walk that extra mile to make sure their traders are comfortable. Proprietary Account Costs
Often, prop trading companies charge a monthly subscription. Now, they let other traders utilize their money, eventually taking a huge risk; hence, the subscription fee covers that risk.
For access to the company’s capital, platforms, and real-time data, most of these participation fees range from $100 to $150 per month. On top of this, a number of these websites charge a one-time fee ranging between $100 and $1,000.
Trading Capital
One of the major selling points in a prop firm involves how much trading capital they will provide to the traders. Some firms might have different capital amounts for traders, depending on their experience and/or performance. Ascertain whether the firm provides enough capital with respect to your needs in its trading and whether expansion in capital with advancement is possible.
Profit Split
The profit split is defined as that portion of the profits that traders are allowed to keep. This obviously varies from firm to firm, but common splits are anywhere between 50% and 90% in favor of the trader. Consider firms with competitive profit splits, but take this in context with other advantages such as size of capital or flexibility over risk management.
Trading Platforms and Technology
A very important factor for success is a quality trading platform serving its intended function from a prop firm. Ensure the company provides user-friendly, reliable platforms with great tools, such as real-time market data, charting, and technical analysis tools. Ensure these will support third-party software such as MetaTrader or TradingView.
Risk Management and Rules
Prop firms do have strict risk management rules, including daily loss limits and maximum drawdown levels. A trader must be in full knowledge and in compliance with such rules. The account will either be suspended or deactivated as a result of such violations. Ensure the firm’s risk management guidelines align with your trading style and your risk tolerance.
Fee Structure
Some charge startup fees, others charge every month, and others still may have a per-trade fee. Be sure to check with any firm’s fee schedule so that you are not surprised with hidden fees of any kind. The firms that have straightforward, no-BS fee structures and modest charges are invariably more trustworthy than those that do not.
Support and Training
Every prop firm can provide training either through webinars, tutorials, or through mentors. Firms with robust support and educational content are able to create possibly more valuable traders in most cases, over time. Consider firms that provide ongoing support and development opportunities.
Top Prop Firms of 2024
The prop trading industry keeps developing in 2024, more firms offer new and attractive opportunities for traders seeking access to large portions of capital. So-called proprietary or simply prop trading firms are offering a chance to their traders to trade without risking their own funds and take a portion of the profits. With increased competition between firms, the top firms have excelled with friendly profit splits, excellent trading platforms, lenient rules of risk management, and exposing them to professional trading tools. This section explores some leading prop firms of 2024 and what puts them above peers in this competitive space.
1. BluFX
Most prop trading firms have an evaluation period, and trading challenges, while BluFX only has a monthly subscription-based model. They are offering only the cTrader trading platform, with a maximum Forex leverage of 1:30 and no minimum trading days, while BluFX prohibits algorithmic and copy trading. All accounts are US Dollar accounts, but BluFX pays profit share withdrawals in British Pounds.
This 50% profit share is the lowest in the prop trading industry, and once traders account for the monthly subscriptions, it can drop into single digits. To prop traders, however, this must be weighed against their strategy and expected profit potential.
Key features of BluFx Prop firm:
- No evaluation.
- A low profit share of 50%
- Only the cTrader trading platform.
- 5% profit target
- 10% trailing drawdown limit
- Daily payouts, but traders can only withdraw in 5% blocks.
- Only 29 assets consisting of CHF, USD, GBP, EUR, JPY, CAD, AUD, NZD, and XAU
- Maximum leverage between 1:5 and 1:30
- Only US Dollar trading accounts, but GBP profit share withdrawals, forcing currency conversions on each transaction.
- Two of the four funded accounts do not scale.
- Monthly subscriptions from $99 to $1,099
2. FTMO
This prop firm ranks highly with its transparency, profit-share, and trading conditions, placing it among the most competitive and honest prop trading firms. It pays its prop traders up to 90%. FTMO was the Deloitte Technology Fast 50 Winner for the past four years, starting in 2019, and traders can use MT4, MT5, and cTrader.
The trading conditions, while challenging, rank among the more generous ones, with a daily loss limit of up to 10% and a maximum drawdown of 20%. They levies a minimum evaluation fee of €155. Traders benefit from balanced asset selection, and a free trial exists.
Key features of FTMO Prop firm:
- Evaluation Process
- FTMO account, Successful traders trade up to $200,000 USD and have a profit share of up to 90%
- Scaling plan, For stable traders, increase their account balance by 25% every 4 months
- Free trial, FTMO can first use Free Trial for simulation practice
- Profit split, 80% of the profit sharing, increased to 90% under certain conditions
- Trading platform, Provide MT4, MT5, dxTrade, and cTrader
- Free trading style, supports a variety of strategies, including EA and hedging
3. E8 Funding
E8 Funding enjoys an excellent trust score with more than 1,000+ reviews but has less operational history. Interested prop traders can start with a 14-day free trial, and the minimum evaluation fee is super cheap at $138 with two-phase verification. In addition to the common 30-day period for achieving the profit target, E8 Funding also offers an extended alternative of 60 days.
Traders need to pass the Letsdeal KYC process, which processes all E8 Funding’s withdrawals. Letsdeel accepts traders of all countries bar 19. The 80% profit share places E8 Funding in the higher echelons, and the maximum leverage of 1:100 allows for competitive trading conditions.
Key Features of E8 Funding Prop Firm
- Three account types for traders with different goals, plus several initial fee options.
- No monthly payments or withdrawal fees, only reimbursable initial fees.
- The firm provides the most popular, multi featured trading platforms: МetaTrader 4 and 5.
- In any event, traders keep 80% of profits with payouts available from the 8th day of cooperation.
- Attainable challenge objectives are 8% and 5% profit targets in 30 and 60 days, respectively.
4. Funded Traders
Prop traders get a one-step evaluation process with a 10% profit target, a tremendous challenge to achieve in 30 days, but it remains the industry standard. The 4% daily loss limit and 5% maximum drawdown make Funded Traders Global one of the strictest firms based on conditions. It presents 300+ assets, placing it at the top among asset selections.
The minimum evaluation fee is $100 for a $10,000 MT4 prop trading account, but traders should consider the upgraded option for $145. The maximum evaluation fee is an industry-high $5,430, and traders can pay the fee via cryptocurrencies.
Key Features of Funded Traders Prop Firm
- Time LimitUnlimited
- Profit Target10%
- Profit Share Up to100%
- Max Daily DrawdownN/A
- Max Absolute Drawdown6%
- Max Trailing DrawdownN/A
- Leverage Up to 1:10
- One-Time Fee$299
5. Fidelcrest
Fidelcrest is one of the most transparent and trusted prop trading firms. It consists of two-step verification and micro prop trading accounts available from $15,000 for a one-time evaluation fee of €99, with unlimited retrials in case traders do not violate the rules. Its maximum payout of 80-90% places Fidelcrest at the top, which few prop firms can compete against.
Traders will enjoy the most generous trading conditions in the industry, as Fidelcrest allows 60 days for the achievement of the target profit of 10%, with the maximum drawdown being 20%. In addition, algorithmic and manual copy trading are allowed.
Key Features of Fidelcrest Prop Firm
- The FidelCrest Challenge with an initial capital 10k balance costs €99 (MicroTrader); 25k balance for €249(MicroTrader); 50k balance for €449(MicroTrader); 150k balance for €649; 500k balance for €1,599; 1m balance for €2,699;
- Profit split, the FidelCrest funded account challenge pays out Micro Trader and ProTrader accounts with Normal risk strategy: 80%. Micro Trader Swing and ProTrader accounts with Aggressive risk strategy: 90%
- The Fidelcrest has a two-part evaluation process that you must pass to become a funded trader.
- Profit Target, 10% for Phase 1 and 2 in Normal Mode. 20% for Phase 1 and 2 in Aggressive Mode.
- Maximum drawdown (MDD), normal Mode: 5% Maximum daily loss with a 10% Maximum loss. Aggressive Mode: 10% Maximum daily loss with a 20% Maximum loss.
- Trading Period, the Fieldcrest Challenge duration is 60 calendar days.
- Leverage, the leverage offered by Fieldcrest is up to 1:100. This applies for all traders even from US, Canada and EU -countries.
- Instruments,Forex, CFDs, Cryptos, Metals, Commodities, and Stocks.
- Allow Trade News, Yes in Fieldcrest Challenge and Verification.
- MT4 and MT5 trading accounts with algorithmic trading permitted.
Frequently Asked Questions (FAQs)
What is a prop firm?
- A prop firm is a type of financial institution. You might also see them referred to as “proprietary trading firms,” but they’re the same thing. They’re run by experienced traders who use the firm’s capital to trade, buy, and sell assets including: Foreign Exchange Trading (Forex), Commodities, Cryptocurrency, Stocks.
How do prop firms make money?
- The way prop firms make money is usually by sharing a portion of the profits made by their traders. Added to this may be a fee from the firm in the form of evaluation fees, subscription fees, or commissions on the trades. Their revenue model is pegged with their traders’ success, and this basically incentivizes them to give good tools and resources.
Do I need to pay to join a prop firm?
- Prop firms provide traders with the capital to trade. But even so, traders have to put in the effort to ensure they make enough profit for the company. Thankfully, many prop trading firms provide traders with enough resources to multiply their money. If a trader fails to make a profit for the company, there is nothing much that can happen because prop firms understand that losses are part of trading. However, the trader may fail to get their account doubled. With Audacity, we always ensure to double all trading accounts once they attain a target of 10%.
Can beginner traders join a prop firm?
- Becoming a prop trader may just be one of the best decisions you can ever make, and the best part is, it is not as hard to become a prop trader as you may think. You need first to learn how to trade, set up a reliable trading strategy, apply risk management skills, then practice. Thereafter, join a prop trading firm to get funded. However, beginners are often required to pass an evaluation or training program to ensure they meet the firm’s trading standards before receiving funding.
What are the advantages of working with a prop firm versus trading independently?
Working with a prop firm offers several advantages including,
- Access to large amounts of capital.
- Reduced personal risk.
- Potential access to professional trading tools and mentorship.
- Traders also benefit from risk-sharing as they don’t risk their own funds allowing them to focus on performance.
However, trading independently allows for complete control and keeps 100% of profits, though it requires more upfront capital and greater financial risk.
