For most of Wall Street’s history, proprietary trading was the realm of Ivy Leaguers on the trading desks of the big banks. But the big banks blew it in a big way, causing the 2008 financial crisis and their prop trading desks were regulated out of existence.
Now, a new type of prop trading firm has emerged and they’re willing to fund anyone who can demonstrate that they know how to make money in the market. This is an incredible opportunity for skilled traders.
Recently, some big prop firms like My Forex Funds have collapsed, so I’m changing my rankings and strongly urging you to use only the safest, most trustworthy prop trading firms until further notice.
Table of Contents
Find the best prop trading firm with my comparison chart that provides prices, current discounts, trading rules and the most important account information. These are my three most trusted prop firms.
|BEST REPUTATION||BEST CURRENT PROMO||BEST FOR QUICK FUNDING|
|$10K – €155|
$25K – €250
$50K – €345
$100K – €1080
(Refundable upon passing of evaluation)
|$50K – $49|
$100K – $99
$150K – $149
(per month with current 70% off promo )
$5K – $39
$20K – $165
$60K – $300
$100K – $495
$100K – $95
$250K – $225
$10K – $260
$20K – $450
$40K – $850
|Prop Firm Promo Code or Current Discount||Click for free trial||Click this link for up to 70% off!||Click for 5% discount|
|Trustworthiness/ Safety||Most famous, reputable|
prop firm in the world
Based in Czech Republic, no fear of CFTC shutdown
|10+ Years in Business|
“In full compliance with all CFTC and NFA regulations” – Topstep COO
Live funded accounts trade real capital on the CME
Headquartered in Chicago Board of Trade Building
|Funded traders trade real funds|
Isreal based – no fear of CFTC shutdown
Different business model from MFF – funded traders trade from 5%ers’ private equity fund
Has paid out more than $167 Million to traders
Unlimited trading days
Get funded in as few as 8 days
Profit target for FTMO Challenge – 10% for Step 1, 5% for Step 2
Up to 90% profit splits
Trade forex, stocks, indices, crypto, and more
|Keep 100% of your first $10,000 in profits; 90% thereafter|
Complete one-step evaluation in as few as two trading days
Only one rule:
Don’t exceed the maximum loss limit
Accounts can be reset at anytime
More than 5,000 accounts were earned last year alone
Offers forex futures + many other CME & CBOT products
|No minimum trades or trading days for Hyper Growth accounts|
Successful traders can reach 100% profit split
Trade forex, metals and indices
No daily loss limits on many accounts
6% – 10% profit targets depending on account
|Get Started||Start Trading with FTMO||Start Trading|
|Start Trading with the 5%ers|
My Top Pick: Topstep Futures – 9.4/10 (Best Current Promotion)
Topstep has always had a stellar reputation, phenomenal trader support, and very generous payouts. Topstep is hands down the best prop firm for trading futures, and thanks to a current promotion that offers up to 70% off, they’ve also become one of best bargains in the business. They’re recent announcement of a one-step evaluation and only one trading rule makes them even more attractive.
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 year.
The principal reason for their popularity, I suspect, is that they are very generous with their profit payouts. Very generous. In fact, you keep 100% of your first $5,000-$10,000 in profits (depending on which account you choose). After you squirrel that away, they’ll still give you 90% of your profits going forward, which is the top payout percentage in the industry.
Topstep has also very recently eliminated their two-step evaluation process. The Trader Combine is now just one step. That means traders opening an account now are possibly just two days away from being funded. Topstep funded over 8,500 accounts last year alone, and by streamlining the evaluation stage, they will fund far more this year. Latest figures had them funding 5,000 traders in August alone.
Traders also benefit from the fact that Topstep gives you unlimited time to hit your profit targets in order to pass the Trader Combine. You can take as much time as you need so long as you don’t hit your loss limit or trailing maximum drawdown. It should be noted that you will continue to pay your monthly fee so long as you’re in the Trader Combine, but once you’re confirmed as a funded trader, those monthly fees go away.
Topstep also has one of the industry’s best educational programs for futures traders. Topstep traders have access to group training sessions led by experienced traders, a digital trading coach known as “Coach T” and an incredible library of blog posts, podcasts, the new live TopstepTV and many other training materials.
As a US-based trader, I also appreciate the fact that Topstep is headquartered in Chicago, so there’s no currency conversions involved, like there is with a lot of other prop firms.
Topstep is one of the best values in the industry, particularly with the current bargain they’re offering my readers. With up to a 70% discount that you can claim by following this link, you can start proving your trading skills in the Combine for just $132/month.I can’t recall a better deal for such a renowned prop firm. It’s an amazing opportunity you shouldn’t pass up.
The layout of Topstep’s website can make it difficult to understand which rules apply to which of their accounts, but they’ve made that much simpler now that they only have one rule. They also have one of the best customer service departments in the industry to answer any lingering questions.
I’m a little uncertain about monthly fees. They can add up pretty quickly if the market isn’t cooperating. On the other hand, with the current promotion, if you complete the Trading Combine in one month and become a funded trader, you’ve made a tremendous deal. Even if it takes you two or three months, you’re paying less than the one-time fees at a lot of other prop firms.
Topstep also has a great mentoring program with a ton of educational resources available at the click of a mouse; however, their really amazing one-on-one training sessions cost extra. I’m not a big fan of add-on fees.
Topstep is one of the premier prop trading firms in the world, with a proven track record of big payouts, outstanding trader support, and fair trading parameters. At the moment, they’re also a great bargain, so sign up now to take your first step toward a potentially lucrative prop trading career.
#2: The 5%ers – 9.2/10
The 5%ers offers quick funding, quick account scaling and great trader support. They are amongst the world’s most trusted prop firms thanks to their transparency, unique business structure and elite risk management team.
There’s a lot of reasons to love the 5%ers, but in these uncertain times for prop trading firms, the best reason may be that their management team.
The 5%ers is probably the best set up of any prop firm to withstand any changing regulations. They have a unique business structure in that they have a private equity pool. Traders who become funded trade money from that pool, and are compensated for that trading as contractors.
At no point does the 5%ers act like a broker or market maker. This well-thought out structure makes them an ideal prop firm in times like these. We don’t know who the CFTC will target next, but we can be pretty damn sure it won’t be the 5%ers.
The 5%ers is also known for having an account that suits any type of trader. Boot-camp is a three-step evaluation program for beginners that comes at a very attractive price point, with easily obtainable 6% profit targets.
The High Stakes account offers traders up to 1:100 leverage, a generous 10% max loss with profit targets set at just 8%. It has a two-step evaluation process, but you can complete both stages in just six days if you hit your target.
Hyper-Growth is an evolution of the 5%ers old instant funding program and allows you to get real funding in just one step, which you can complete without any minimum days or trades. You can then double your capital if you hit profit targets, up to $4 million. Elite traders can even earn a 100% profit split, which is unprecedented in the industry. According to the 5%ers, the Hyper-Growth program has the “highest success rate in the industry.”
One of the reasons for the high success rates at the 5%ers is that many accounts don’t have a daily loss limit, simply a “daily pause.” If you’re having a bad day at the trading desk and hit your daily pause limit, you simply can’t trade any more that day. You don’t lose your account, and you’ll be back at the next day.
The 5%ers is also renowned for their trader assistance, trader community and customer service, which is mentioned in almost every online review you can find. In a pretty short time frame, the 5%ers have built a community of loyal traders who love them for their overall trader support.
A great example as to the links the 5%ers will go to support their traders is their partnership with Dr. Gary Dayton, a psychologist and author who specializes in trader psychology. Over seven sessions, Dr. Dayton will help you tackle perhaps the most difficult aspect of trading. Other prop firms would charge extra for such an invaluable service, but with the 5%ers, it’s free for all their traders.
Some traders have complained about the stop-loss requirement for every trade, but this only actually applies to Boot Camp accounts, which are designed for traders still working on their risk management. If you can’t deal with stop losses, simply open one of the other two account types.
One potential drawback to the 5%ers is that they have limited assets available for some accounts. For a long time the 5%ers were forex only. They’ve been adding assets, but right now they are still only allowing forex, metals and indices.
If you have any desire to trade other markets, you will need a separate account with a different prop firm.
I think the 5%ers are here for the long haul, no matter what transpires in the MFF case. That alone is a great reason to choose them. But their scaling plan, profit splits, trader support and educational resources also rank amongst the best in the industry. To start your trading career with one of the best, sign up with the 5%ers now.
#3 FTMO – 9.0/10
FTMO lets you trade just about any financial instrument out there, and with more than 10,000 traders worldwide, they are probably the most reputable, successful prop trading firm in the world.
FTMO has a great reputation for good reason. You won’t find a single complaint about them not paying out on time or making accounting mistakes. You will get every cent that you earn. With some of the bottom feeders in this industry, that is not always the case.
Profit splitting starts at 80% but operates on a sliding scale, meaning that the truly elite traders keep up to 90% of the profits, which is second highest in the industry behind the 5%ers.
They also offer great scaling opportunities. After passing the two-stage evaluation process, which includes the famous FTMO Challenge, traders can have access to up to $400,000. If you generate a 10% net profit or higher over a certain time period, FTMO will incrementally raise your funding to a maximum of $2 million. FTMO knows that it takes money to make money and they fund their traders accordingly.
FTMO also allows its traders access to almost every financial market you can think of. If you’ve mastered a particular market, they’ll let you trade it, from forex to futures to metals to equities. Many prop trading firms are only focused on very particular markets, but FTMO gives you the freedom to trade what you want.
They also have one of the most professional trading platforms in the industry and excellent educational resources, mostly due to their investment in new trade tracking technology. FTMO traders are given access to a series of apps that track your trading tendencies and offer real-time feedback.
One of the things that best exemplifies FTMO’s commitment to helping their traders is that they employ trained psychologists. The psychological aspects of trading are well known, and yet FTMO is one of the few prop firms that actually offers support in this critical area.
Evaluation parameters are pretty standard, although they’ve made a recent concession to make things easier. Max losses are $1,000 on a $10,000 account and your profit targets are 10% over 10 trading days in Step 1, but they’ve cut the Step 2 target to 5%, which obviously takes a lot of the pressure off.
Of all the reputable prop firms, FTMO comes in as one of the most affordable. Current prices start at just €155 for a $10,000 funded account. This is very cheap, and this one-time fee is fully refunded should you pass the two-step evaluation process.
Some traders are turned off by the fact that FTMO doesn’t actually let you trade real money. That’s right, even if you earn a funded account, with FTMO trading is always done in demo mode. FTMO says that the demo trades you’re making are directly connected to their real account, but they are a little vague about whether or not they’re making all of your trades.
Personally, this doesn’t make such a big difference to me. I’m still getting paid out on my virtual trades as if they were real, so what of it? I don’t really care if FTMO is making money off my strategy or not, so long as I am.
Using “dummy” accounts does, however, bring up the question of how dedicated FTMO is to helping their traders. If they don’t actually profit when their traders profit, what’s their incentive to guide you along?
I’d argue, however, that the massive investment FTMO has made to develop their training programs and trade tracking apps proves their dedication to helping traders succeed.
FTMO is one of the most popular, transparent, and supportive proprietary trading firms you’re going to find and their profit splits are second to none. There’s never been a better time to start your evaluation and eventually join the thousands of traders who have made great money trading with FTMO.
#4: Fidelcrest – 8.9/10 (Best For Big Accounts)
Fidelcrest has a great reputation and more than 6,000 traders worldwide. They offer performance coaching, a million dollar account size, up to a 90% profit split, a number of incredible flash promotions as well as free retries if your account has a positive balance and is not in violation of the trading rules.
Along with FTMO, Fidelcrest offers the highest potential profit split in the business, but unlike FTMO, you can trade real capital with Fidelcrest. During your two phases of evaluation, you’ll be trading with demo accounts, but after that Fidelcrest will invest real capital.
Fidelcrest is also on the cutting edge in terms of tradable assets. I have yet to find a prop trading firm that offers more options for trading crypto, so if that’s your market of choice, look no further. Last time I counted, you could trade 19 crypto pairs. You can also trade forex, commodities, indices, and shares.
Although some might bristle at the two-step evaluation, Fidelcrest is one of the growing number of prop firms that will actually pay you a commission while you are being evaluated. After you pass the second evaluation stage, Fidelcrest will pay out a bonus based on account size with your first profit payout. For the $500K Aggressive account, the bonus is $30,000. That’s a great start to your trading career! And after that, you’ll be making 80-90% as a funded Findelcrest Trader.
The evaluation process with Fidelcrest is also notable for how quick it can be. Traders can now choose a free Fast Track option if they order a Micro Trader Aggressive account, which has no minimum trading days. Hit your profit target on Day 1, and you can move on that same day. That’s pretty remarkable.
Even if you don’t opt for the Fast Track option, you can still move on to a funded account in just 15 trading days with most accounts. Either way, Fidelcrest offers some of the fastest paths to real capital of anyone in the industry.
Fidelcrest also offers more account options than anybody. Regardless of your risk tolerance, trading strategy, experience level, or budget, you will find the perfect account for your needs. Pro Accounts offer the highest amount of capital, Aggressive Accounts offer the best payouts, and Micro Accounts offer the lowest profit objectives and the lowest prices. Accounts range in size from $10,000 in capital, all the way up to $1 million accounts. The options are endless.
Fidelcrest is also currently offering unlimited retries for phase 1 of your evaluation for traders who have a positive account balance and no drawdown violations. That means if you end up short on your profit target, you have endless chances to get there.
That’s a pretty generous offer, so take advantage now.
Traders have one principle complaint when it comes to their experience with Fidelcrest, and that’s the trading parameters in the Verification stage.
After you pass the Trading Challenge, there’s one more step between you and a funded account. Two-step evaluation processes are very common in prop trading, but Fidelcrest actually makes the second step more difficult than the first.
For the Verification stage, traders must hit the same profit target (10% for a Normal Account, 5% for Micro Accounts) as they did in the Trading Challenge, but the maximum loss is cut in half. For a Normal Account, that means your maximum loss is just 5%. That’s actually still higher than the max loss at some other firms, but it doesn’t give you much margin for error.
Furthermore, Fidelcrest calculates your max loss based on your highest recorded balance. So if you get off to a good start and are up 7% but suffer a few bad days and fall to +1%, you would fail the Verification because you’ve lost more than 5% off your high balance. So with Fidelcrest, you could possibly fail even if your account is still in the green.
Fidelcrest is very upfront about this calculation, but it still seems to take some traders by surprise. As always, make sure you understand all trading parameters before you sign up with a prop trading firm.
Fidelcrest is your best prop trading option if you want to trade crypto or other assets, and their profit payouts and current promotion make them a great choice no matter what you trade. The Verification stage offers a nice bonus profit payout, but mind the narrower trading parameters.
Choose one of Fidelcrest’s many account options now including a $1 million account to take advantage of their great promotion and put yourself on the path towards up to a 90% profit payout.
#5: The Funded Trader – 8.8/10
The Funded Trader had a moment were they seemed destined to become one of the most popular prop firms in the world due to their verified payouts, obtainable profit targets, generous drawdown limits, high leverage, and great prices.
Concerns about their similarities to My Forex Funds, which was closed by the CFTC, have traders thinking twice about the Funded Trader however.
They still have some great promos though: Click for 20% off plus a 125% refund with code TFTBLACKFRIDAY2.
There’s a lot to like about one of the most popular new prop firms. We’ll start with the price points, which are amongst the best in the industry. For a $50K account, a one-time $315 fee, which is fully refunded if you pass the evaluations, is about as good as it gets.
For such a great price, you’d expect some concessions in other areas, but the Funded Trader matches up with FTMO and other industry leaders in terms of payout percentage (80%–90%), scaling opportunities (up to $1.5 million), and profit targets (10% for the first stage, 5% for the second).
In other key categories, the Funded Trader actually bests the competition. The max loss of 12% is very generous, and they don’t skimp on the daily max loss (6%) either. Those are both a tick or two better than industry standard, and in such volatile times, that can be the difference between failing an evaluation and living to trade another day.
The Funded Trader also has only five minimum trading days for the evaluation stages in its Standard account and offers a Rapid account with no minimum trading days. Meet your profit targets and you could be a funded trader within a matter of days.
If you are a more conservative trader, the Funded Trader gives you a little more time to hit your profit targets. For even the most patient traders, 35 days for the first stage and 60 for the second should be ample time.
The Funded Trader also stands out in terms of leverage. If you choose a Rapid account, your account leverage is a robust 100:1 when trading forex. It’s even higher with the Standard account, which boasts 200:1 leverage. Even funded traders enjoy 100:1 leverage. Profit targets are obviously much easier to hit when you have so much buying power.
And while forex is the focus of most Funded Trader clients, you can also trade crypto, indices, and some commodities, depending on your trading platform.
In addition to all the above advantages, traders also love Funded Trader’s lax rules regarding trading style. Basically, anything goes unless you’re trying to take advantage of the demo environment. For instance, if you try to take advantage of a demo server error, your account will be forfeited. You can even hold trades overnight or over weekends, unless you’re trading shares. Trade copiers are permitted so long as your Funded Trader is the master account.
If you’ve read through some of my other prop firm reviews, you already know that I’m wary of new prop firms for a number of reasons. The My Forex Funds disaster has helped reinforce this opinion.
Funded Trader feels different from the flash-in-the-pan prop firms is that it was founded by prominent members of the forex trading community. Blake Olson of VVS Academy and Angelo Ciarnello and Nick D’Arcangelo of Forex League have trained thousands of forex traders over the years. They know the market. They understand the trader mentality. They know all the tricks of the trade. (Of course, prominence doesn’t always equal success, as evidenced by Funding Talent.)
Finally, the Funded Trader keeps its traders on demo accounts, even after they’ve become funded. Payouts are in real money, of course, but all trades are simulated. FTMO and a few other prop firms do the same, but for some traders, not being in the actual market is a deal breaker.
This strategy was supposed to help keep My Forex Funds off the CFTC’s radar, but alas, it did not.
It seems to me that the founders of the Funded Trader took a good hard look at FTMO and decided to make something a little bit better and a little bit cheaper. In some ways they succeeded, but concerns that the CFTC might be knocking at the Funded Trader’s door next have me choosing FTMO at this time.
#6 Lux Trading
Lux Trading is an old-school prop trading firm. They are looking for dedicated, experienced traders and reward the best of them with a substantial amount of capital, and I mean substantial. If you prove yourself to be a consistent, profitable trader, you can scale your account all the way up to $10 million with Lux Trading. That’s the big leagues, for sure.
Of course they don’t just hand out $10 million to anyone—Lux takes a good long look at its traders before funding them, which is one of the reasons why I don’t rank Lux higher. In order to become a funded trader, you have to actively trade for a total of 49 days. That’s a much longer evaluation period than most of the other firms on my list.
On the flipside, they give you as long as you need to hit your profit targets, so you’re not forced into panic trades by an impending deadline.
Another reason Lux is near the bottom is that they only pay out 75%. That’s 5-15% less than you’ll find anywhere else. However, Lux pays a lot more individual attention to its traders and offers a lot of guidance, especially in the area of risk management. That alone may be worth the extra 5-15%.
Lux also has pretty tight trading parameters, but that should come as no surprise. The bottom line is this: Lux wants professional traders with a long-term, risk-averse perspective who know what they are doing and are willing to put in their dues. If that’s you, you can sign up with Lux here—you just might be on your way to managing $10 million.
#7 True Forex Funds
I’m adding True Forex Funds to my best prop firm list after a lot of careful consideration. They’re relatively new, but have quickly become many traders’ favorite prop firm. I think they’ll eventually end up much higher on this list, but I just don’t have a lot of real experience with them yet.
So far, I love the quick payouts and simple rules. TFF doesn’t try to trip you up with any complicated drawdown calculations. You simply need to keep your balance above 90% of your initial balance, and 95% of your daily balance. They also offer very obtainable profit targets, starting at just 8% for Phase 1 of their evaluation and 5% for Phase 2.
Other things I love: no minimum trading days, free retries if you don’t hit your profit targets, and a great scaling program. So while my jury is still out a bit, I have very high hopes for True Forex Funds. I’ll keep you updated!
#8: SurgeTrader – 8.3/10
SurgeTrader is a relative newcomer to the prop trading space, but has garnered some attention thanks to their relatively simple trading rules, one-stage evaluation and quick funding. Higher prices and some recent SEC allegations about related companies keep them from being higher up on my list.
One of the main reasons SurgeTrader made my list is that they are extremely quick to fund traders once you’ve passed your trading audition. They do not instantly fund traders, but they have no minimum trading days. Whenever you hit your 10% profit target, you’re funded, and you can see your new capital within a matter of hours.
The biggest drawback of prop firms that offer instant funding is that your profit share is never more than 50%, but SurgeTrader offers 75-90% and will fund you almost as fast.
SurgeTrader also gets high marks in terms of customer service and has a great reputation for responding to traders’ concerns. A great example of that is that a number of traders complained about SurgeTrader’s drawdowns, which at the time were only 4% on a daily basis and 5% overall. That’s obviously pretty tight, but SurgeTrader responded and increased the daily loss limit to 5%, and the overall drawdown is now 8%. That gives traders a lot more room to maneuver.
As far as rules go, SurgeTrader keeps it pretty simple, which is a big plus. SurgeTrader breaks their rules down in two categories: hard rules and soft rules. The hard rules are the drawdown limits. Violate those and you’re done. There’s also three soft rules: you must include a stop-loss with every trade, you must close all positions over the weekend, and you can only have a certain number of lots open, relative to the size of your account. If you violate one of the soft rules, your position is merely closed, but your account is open.
SurgeTrader also offers a lot of support in the form of blog posts and educational opportunities, which makes them a good option for traders just learning the ropes. They also allow access to a lot of different markets, and are very permitting when it comes to trading styles.
The biggest drawback to SurgeTrader is the cost. For the smaller account sizes, SurgeTrader is roughly 20-25% more expensive than the Funded Trader. And for larger account sizes like the million dollar account, Fidelcrest is up to 50% cheaper.
That said, I think you get more personal service at SurgeTrader than you do at the Funded Trader, and you only have one audition with SurgeTrader compared to two with Fidelcrest. Whether or not the extra cost is worth these advantages, is up to you.
I also mentioned above that the payout from SurgeTrader is 75-90%. Why the variance? With SurgeTrader you can make an “add-on” purchase to increase your payout to 90%. For example, if you purchase a $50K audition the add-on fee to receive a 90% payout is 20% of the purchase price, which is an extra $80 at current prices.
I’m also not a big fan of trailing drawdowns, although SurgeTrader’s calculation of trailing drawdown is pretty trader-friendly compared to other prop firms. Once you’ve profited more than 5%, the trailing drawdown is removed and your loss limit is simply your starting balance.
Finally, the SEC announced that Brent Seaman, husband of SurgeTrader’s CEO Jana Seaman, had been charged with operating a $35 million ponzi scheme. So far there seems to be no effect on SurgeTrader’s business, but I’m waiting to see how it all shakes out.
There’s also that pesky CFTC to consider. SurgeTrader might avoid their wrath for the time being simply because they’re a smaller firm, but I have to think they’ll be taking a good hard look at SurgeTrader before too long.
If you’re willing to pay a premium price, there are a lot of advantages to trading with SurgeTrader. You’ll be funded fast, receive good trader support and won’t spend a lot of time puzzling over complicated rules.
Prop Trading FAQs
For further information, check out my introduction to prop trading article, but here’s some basic info on proprietary trading:
What is Proprietary Trading?
Proprietary trading is when a firm uses its own money to trade any sort of financial instrument in order to make a profit.
Today, proprietary trading is mainly conducted by two types of companies. Some prop trading firms, like the ones I’ve ranked above, allow anyone to trade with their capital so long as you follow the rules. You have to pay a fee, agree to trade according to the firm’s strict parameters, and (in some cases) pass a trader evaluation in order to become a funded trader.
If you sign up with this type of proprietary trading company and follow the rules, they’ll give you up to $2 million to invest. You can split any profits you make, keeping as much as 90% and you won’t be responsible for any losses. If you violate the trading terms or lose too much money, the prop firm will cancel your account.
Examples of these firms are those above, plus many others including My Forex Funds, SurgeTrader, Lux Trading, Audacity Capital, and City Traders Imperium.
The second type of proprietary trading firm is the Wall Street version. These are the prop trading companies that hire math prodigies who graduated from Yale at the age of 16. If you are lucky enough to get hired as a trader by one of these companies, you’ll get a spot on a physical trading desk, and have an actual salary, plus benefits. You’ll also get a percentage of your trading profits in the form of a bonus.
Examples of this second type of proprietary trading company are Jane Street Capital, Hudson River Trading, Optiver, 3Red Partners, Jump Trading, Virtu Financial, and many more.
Who much do prop traders make?
More than most professions, prop traders compensation is based on their performance. If you work for one of the Wall Street-style prop firms, you’ll likely make more than $100,000 in a base salary, with a potentially significant bonus based on a percentage of your trading profits.
Prop traders who use funded trader programs only make money if they profit. If you sign up with FTMO, for example, once you pass their evaluation stage, you will become a funded trader. As a funded trader, you keep up to 90% of your profits. If you don’t profit, you won’t see a dime.
Is proprietary trading legal?
Yes, it is. There is some confusion about this because of the Volcker Rule, which was passed after the 2008 financial crisis. The Volcker Rule outlawed banks from having prop trading desks. The intention was to prevent the banks from making overly risky trades with depositors money. So the ban on proprietary trading only applies to banks.
Is prop trading a scam?
No. It is perfectly legit. Depending on the market, it can be quite difficult to make money as a prop trader, but it is very possible. Good traders can pass an evaluation, invest a prop firm’s capital and split the profits. There are some prop trading firms that make it harder for their traders to succeed than others, however, so do your homework before signing up with any proprietary trading firm.
Do prop firms have promo codes or special offers?
Yes, prop firms offer frequent promotions! Some firms such as Topstep offer special promos to my readers (15% off!), which you can access at any time with this link. Other prop firms such as Fidelcrest and The Funded Trader offer occasional deals for a limited time, which I publish at the top of this article. I always keep the prop firm promos up to date, so check back often.
Quick tip: In general you can find the best prop firm promos during slower trading periods such as around the holidays. Even FTMO, which almost never offers discounts, usually has great offers in December.
Methodology: How to choose the best proprietary trading firms
Choosing the right prop trading company will give you the best chance to maximize your trading profits. Choosing the wrong one could rob you of a lot of time and money. It’s not a decision to be taken lightly, so I want to be as transparent as possible about how I made my rankings.
I began with a list of prop firms that I compiled from my own experience trading, recommendations of friends and traders in my network as well as a google search. There seems to be new prop firms popping up every month, but it was important to me that I only listed firms with a proven track record.
Once I had compiled my list of candidates, I came up with the above rankings by analyzing each firm and awarding points according to the following seven factors:
Factor 1: Profit splits
This is pretty self-explanatory. I awarded the most points to the firms that offered the highest profit splits. Obviously this is a critical category. It is very difficult to consistently make profits as a trader, especially when you’re bound to the rules set up by your prop firm. If you are up to the challenge and turn a profit, obviously you should reap the lion share of the rewards.
I have no problem giving the prop firm their cut. They put up the cash, they assume much of the risk, so they deserve a percentage. But you’re the one doing all the work, sweating through all the tough decisions, and consistently beating the market. You deserve the highest possible profit percentage.
Factor 2: Scaling opportunities
This is another pretty simple category. Most prop firms allow successful traders to trade progressively more capital so long as they continue to meet profit targets. The best, most consistent traders may eventually be entrusted with millions of dollars of a prop firm’s capital.
You’ll see these best-case-scenario figures splashed across every prop firm’s website. “Trade up to $2 million!” This can be misleading, however, as some firms make it nearly impossible to make it to the high water mark.
So when I awarded points in this category, I looked at not only that top figure, but also at how hard the proprietary trading firms make it to get there.
Many firms also bump up their profit splits if you can meet your profit targets, so I also took that into account.
Factor 3: Trading parameters
This is a very important category that many rookie traders don’t look at closely enough when they sign up with their prop firm.
All prop firms control how much risk their traders can take on. This makes perfect sense, of course, since they are entrusting you with their capital.
Prop firms use a number of different tools to limit how much risk you take on. Some don’t allow you to keep positions open overnight or over the weekend. Some don’t allow you to trade news releases, so you are limited when unemployment figures or other key economic data is released. Most employ daily loss limits and overall loss limits or some type of draw-down limits.
If that’s not enough, some prop firms even limit what type of trading strategies you can use.
As I said, prop firms are entitled to limit how much risk you take. It is their money, after all. However, some firms take this too far. As a trader, you have to be able to assume some risk, or you’ll never make a dime.
When awarding points, I rewarded the firms that gave their traders the most freedom by enforcing the fewest restrictions.
I also looked at profit targets for this category, although most proprietary trading firms fall in the 8-10% range, so there’s not a lot of variance. Obviously the lower the profit targets, the easier it will make your life as a trader. In addition to less stress, it will be easier to pass your evaluation period or graduate to higher account levels.
Factor 4: Affordability / Value
I’m amazed at how expensive some prop trading firms are. Some of them charge so much, it makes way more sense to just start trading the money you’d have to pay as fees rather than forking it over to a firm.
I’m also not a big fan of monthly fees. Some of you may prefer that payment model, but I’d rather pay my dues upfront and not worry about it again.
I rewarded prop firms with low price points, but I also looked at what each firm offered with their funded account program. A really cheap prop trading firm that doesn’t offer great trading platforms or good customer support isn’t something I’m going to recommend. I also want to see some bang for your buck.
Factor 5: Tradable assets
I’m a firm believer in finding one niche in the markets, becoming an expert and just trading within that niche. Most of the successful traders I know have done exactly that. However, I still prefer prop trading firms that offer a lot of options when it comes to tradable assets.
Even within certain asset classes, you still need to be aware of exactly which financial instruments you are allowed to trade. For example, some forex prop firms only allow you to trade a limited number of currency pairs, which obviously limits your trading options.
I also like a prop firm that provides a lot of asset options because you never know what your trading future might bring. Your current trading strategy might not be viable in a few years. I don’t want to have to start all over with a new prop trading firm because I had to change strategies.
Factor 6: Educational Resources
If you are already an experienced trader and are simply looking for capital, you may not place too much value in a prop firm’s available educational resources. I get that. But I’d argue two things.
First, with the way financial markets are evolving so quickly these days, it is imperative even for the most seasoned traders to perpetually continue their education. Crypto is a great example. No one knew what this was just a few years ago, but the traders who figured it out early and learned the market first made fortunes. Never stop learning.
Secondly, I think there is a direct correlation between the quality of a proprietary trading firm and the quality of its education program. The best prop trading firms who want their traders to succeed make investments in the ongoing education of their traders. Those that don’t… don’t.
A really good prop firm wants the smartest, most educated traders in the world trading their capital. They will make the necessary investments to make sure that’s what they have.
Factor 7: Customer service
Not something a lot of traders think about, but this is also very important when judging a prop trading firm. Like educational resources, how much a firm invests in its customer service department is a really good indicator of how much they value you, the trader.
Also, prop trading comes with its own set of rules that are unique in the trading world. There are times when even the best traders need some help. With markets moving as fast as they do, it’s critical that you get that sound guidance as quickly as possible.
Top proprietary trading firms have invested in a knowledgeable, helpful, courteous support staff that will be there to guide you whenever you need them.
You have to be very careful when choosing a proprietary trading company. Prop firms come in all shapes and sizes and there’s a lot of them out there that don’t have traders’ best interests at heart.
I truly hope this guide helps you find the right prop trading firm for you. A good proprietary trading firm can give you the capital boost you need to make real money as a trader. That’s my goal for all of you who have decided to go the prop trading route.
If you’re trading with a firm that you love and it isn’t on my list, please let me know here. Also please reach out if you’ve had a bad experience with one of the above firms. I will update my rankings accordingly.
Trading always seems like a me vs you, zero sum game, but it’s not. By exchanging information and learning from our collective experience, we can all help each other along on our journey towards true financial freedom.
If you’re ready for the next step and want to join the prop firm that I think will give you the best chance to become a successful prop trader, sign up with Topstep today.