How to Compare Prop Trading Firms

How to Compare Prop Trading Firms

Profit split

Proprietary trading is one of the fastest ways to achieve financial independence and is much more accessible today than ever before. Prop firms take a percentage of profits from their traders, usually between 10% and 30%. The main reason for this is to provide additional capital for trading. Prop trading firms can help traders earn more if they properly size their positions and manage their risks.

Profit splits vary between trading firms, and traders expect different profit splits. It is important to look for a profit split that reflects your own trading interests. In general, a firm that offers a higher profit split will be more profitable. However, a lower profit split could mean less profit for you.

Prop firms usually fund their profitable traders with demo accounts. These firms then pay out the capital of the unprofitable traders to pay the profitable ones. The majority of traders don’t even know that they’re working with prop firms. Prop firms can be risky, as many traders may make too much profit. Prop trading is not suitable for all traders.

FTMO is one of the best prop trading firms in the world. Founded in Prague, FTMO has over 10 years of experience and a good reputation. In addition to high profit splits, FTMO also offers free coaching and a 20% discount on the first account funded. The firm has thousands of traders and has distributed $27 million in profits to them as of 2021.

Customer service

Prop trading firms offer a range of investment tools. They can range from powerful mobile applications to trading platforms, such as MetaTrader 4 or cTrader. They should also provide effective customer support to answer any questions you may have, whether you are having trouble with the software or need some advice about strategy. Traders should also consider the reputation of the firm to avoid being scammed.

Prop firms also limit the amount of risk you can take. Some don’t allow overnight trading on news releases, while others restrict trading on certain financial instruments. Most prop firms also implement loss and draw-down limits. Other features to look for include automated account creation and monitoring, full automation of email hosts, and integration with any payment provider.

Prop trading firms typically have a small number of employees and clients, making customer service a top priority. As a result, they can offer quick support to their clients. They may have dozens of open positions and few customers, which means that they can respond quickly to client inquiries. Additionally, they don’t have strict rules on leverage, so they can often have a large volume of unfilled orders at any one time.

Prop trading firms also offer a variety of different types of trading services. Some companies allow traders to work remotely and trade on their own account. In addition, a firm may also allow traders to participate in a program that offers coaching and capital for the trading platform. Some firms even offer free coaching for new traders.


When comparing prop trading firms, it’s important to consider the education offered to their traders. Even the most experienced traders need to stay abreast of the latest market trends. An education provided by a prop firm will help them stay up to date with these changes and alert them to new trading opportunities. Prop firms that are devoted to trader education will earn high marks.

The fees charged by prop trading firms vary widely, so it is important to understand how much they charge. It is also important to choose a firm that fits into your budget. Most prop firms require a one-time fee for the evaluation process, which is refundable in the event that you decide not to continue trading.

Although you do not have to have a college degree to become a prop trader, a degree in statistics, economics, or finance will help you understand how the market works. However, you should not expect to be able to immediately move into a hedge fund or a large bank once you graduate. Large banks and hedge funds don’t care about the minute-to-minute trading that prop traders do. If you’re looking for a different career path, consider joining another prop trading firm or working for a commodity firm instead.

Prop trading firms provide a wide range of services to their clients. Before starting a trade, you should educate yourself about the markets and learn the basics of price action, indicators, and charts. Moreover, you should learn about risk management and how to protect yourself from losing money. Prop trading firms often offer training programs and internships to their traders, and they understand that education is essential for success.


Prop trading firms that do not operate as broker-dealers are not required to join FINRA. In addition, firms with private funds are exempt from SEC requirements. Because of this, some of these firms are able to skirt SEC requirements by providing traders with funded accounts. Other firms may operate using demo accounts to trade with traders.

However, the current regulatory framework is still a bit lax when it comes to the oversight of these firms. While the Volcker Rule requires all banks to be regulated by the SEC, independent prop trading firms are not subject to the same scrutiny. The proposed rule changes would limit the exemptions to exchange specialists but require these firms to be regulated by a national securities association.

While most firms require participants to meet minimum requirements and follow strict margin rules, others let traders trade in real money trading accounts after passing a qualification process. Some firms will also enforce a daily maximum loss limit. Traders must adjust their risk to meet these requirements and ensure they maintain adequate margins.

Prop trading firms can be very profitable. They recruit professional traders and fund them with the company capital. The firms then split their profits with the traders. Traders are able to use a variety of strategies and leverage sophisticated software to earn profits. Prop trading firms also provide support and retraining to their traders. In addition, these firms develop strict trading rules that govern their exercise to promote profitable trades and discourage losses.

FTMO’s partnership with Dr. Gary Dayton

The 5%ers have partnered with Dr. Gary Dayton, a psychologist who specializes in trader psychology. Dayton offers seven sessions of counseling to traders looking to improve their trading. These sessions are free of charge for 5%ers. Dayton is known for his ability to help traders overcome many common trading challenges.

Trading psychology is one of the most underrated elements of a successful trading career. Many traders have read several books on psychology, and attended seminars, but they don’t apply the information to their trading. Thankfully, Dr. Dayton is an expert trader and licensed psychologist who understand how to apply the knowledge to the trading floor.

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