Understanding The5ers’ Business Model
It is essential to understand how The5ers operates as a proprietary trading firm. Unlike retail trading, where individuals use their personal funds, proprietary trading firms provide traders with capital in exchange for a share of the profits. This arrangement benefits both parties: the firm expands its trading activities while traders gain access to more substantial capital without risking their own money.
The5ers’ business model revolves around funding traders who pass their evaluation programs. These programs test a trader’s ability to generate profits while maintaining risk control. Traders who successfully meet the evaluation criteria receive funded accounts and can then trade with the firm’s capital, earning a share of the profits based on performance.
The firm’s main revenue sources include:
- Evaluation Fees: Traders pay a fee to participate in the evaluation process. This fee covers administrative costs and helps The5ers manage risk.
- Profit Sharing: Once traders are funded, The5ers takes a percentage of the profits generated. The split varies depending on the funding program and the trader’s performance.
- Scaling Plans: The5ers encourages consistent performance by increasing the capital allocation for successful traders over time. This allows traders to manage more substantial positions and increase their earning potential.
With this foundation, we can now explore The5ers’ trading rules, broken down by funding programs, general risk management policies, and prohibited activities.
The5ers Trading Rules
The5ers offers three primary funding programs, each tailored to different trading styles and risk appetites:
- Bootcamp Program: Designed for traders seeking a low-cost entry, this program involves a three-step evaluation process.
- Hyper Growth Program: A single-phase challenge that allows traders to access funding swiftly.
- High Stakes Program: A two-phase evaluation offering substantial funding upon successful completion.
Bootcamp Program Rules
The Bootcamp Program is ideal for traders looking to start with minimal initial investment. The program’s structure and rules are as follows:
Evaluation Phases
- Phase 1: Achieve a 6% profit target with a maximum drawdown of 5%.
- Phase 2: Similar objectives as Phase 1, reinforcing consistent performance.
- Phase 3: Final assessment mirroring the previous phases to ensure reliability.
Key Rules
- Leverage: Maximum of 1:10.
- Trading Days: No time limit; traders can progress at their own pace.
- Profit Split: Up to 100% upon successful completion of all three phases.
- Prohibited Strategies: High-frequency trading (HFT), copy trading, hedging, arbitrage, and similar high-risk strategies are not allowed.
These rules are designed to promote disciplined trading and risk management.
Hyper Growth Program Rules
The Hyper Growth Program caters to traders aiming for rapid funding through a streamlined evaluation.
Evaluation Structure
- Single Phase: Traders must reach a 10% profit target without exceeding a 6% stop-out level.
Key Rules
- Leverage: Up to 1:30.
- Trading Days: Unlimited; traders can take the time they need.
- Profit Split: Potentially up to 100% after meeting the profit target.
- Daily Pause: A 3% daily drawdown triggers a temporary halt to trading activities.
- Prohibited Strategies: Similar to the Bootcamp Program, strategies like HFT, news trading, and arbitrage are prohibited.
This program emphasizes swift yet controlled trading practices.
High Stakes Program Rules
The High Stakes Program is tailored for traders seeking significant capital allocations.
Evaluation Phases
- Phase 1: Achieve an 8% profit target with a maximum loss limit of 10%.
- Phase 2: Reach a 5% profit target, maintaining the same loss parameters.
Key Rules
- Leverage: Up to 1:100 for forex instruments.
- Trading Days: No time constraints; traders can proceed at their own pace.
- Minimum Profitable Days: At least three days with profits of 0.5% or more are required in each phase.
- Daily Drawdown: Capped at 5% of the previous day’s closing equity or balance.
- Prohibited Strategies: Includes HFT, arbitrage, and system exploitation.
Successful completion grants traders access to substantial funding, with bi-weekly profit withdrawals.
General Trading Rules Across All Programs
While each program has specific guidelines, certain rules are universal across The5ers’ offerings:
Prohibited Trading Practices
To maintain market integrity and protect company capital, The5ers prohibits the following:
- High-Frequency Trading (HFT): Rapid trades executed within seconds.
- Arbitrage: Exploiting price discrepancies across markets.
- News Trading: Placing trades immediately before or after major news events.
- Copy Trading: Replicating trades from other traders or third-party systems.
- Hedging: Holding opposing positions in the same or correlated instruments.
- System Exploitation: Taking advantage of platform glitches or errors.
Engaging in these practices can lead to account termination without refund.
Account Inactivity
Accounts with no trading activity for over 30 consecutive days may be subject to expiration. This policy encourages consistent engagement from traders.
Restricted Countries
Due to regulatory constraints, The5ers does not accept traders from certain countries, including:
- United States
- Cuba
- North Korea
- Iran
- Iraq
- Sudan
- Libya
- Myanmar
- Yemen
- And others as specified in their official guidelines.
Traders should consult The5ers’ official resources to confirm eligibility based on their country of residence.
Payout Terms and Conditions
The5ers offers flexible payout options to accommodate traders’ preferences.
Payout Methods
Traders can receive profits through:
- RISE: A digital payment platform.
- The5ers Visa Card: Available in virtual or physical form.
- Cryptocurrencies: Various digital currencies as specified by The5ers.
Payout Frequency
- Bi-Weekly Withdrawals: Funded traders can request profit withdrawals every two weeks.
This structure ensures timely access to earnings, supporting traders’ financial planning.
Conclusion
Understanding The5ers Prop Firm Trading Rules is essential for traders looking to maximize their chances of securing funded accounts. By following these guidelines, traders can navigate the evaluation process, maintain compliance, and build a successful career in proprietary trading.
Frequently Asked Questions (FAQs)
What is the profit target for the Bootcamp Program?
The Bootcamp Program requires traders to achieve a 6% profit target in each of its three phases.
Are there time limits to complete the evaluations?
No, The5ers provides unlimited time for traders to complete the evaluation phases across all programs.
Can traders from the United States participate in The5ers programs?
Unfortunately, due to regulatory restrictions, traders residing in the United States are not eligible to participate.
What trading strategies are prohibited by The5ers?
Prohibited strategies include high-frequency trading, arbitrage, news trading, copy trading, hedging, and any form of system exploitation.
How often can I withdraw my profits?
Funded traders can request profit withdrawals bi-weekly, with options to receive funds via RISE, The5ers Visa Card, or cryptocurrencies.
Is the use of Expert Advisors (EAs) allowed?
Yes, the use of EAs is permitted, provided they do not engage in prohibited activities such as arbitrage, high-frequency trading, or copy trading.
