Prop Trading Firm Review: Comprehensive Analysis (2024)

FAQs

How do you pass a prop firm test? ›

Around 10% pass

According to FTMO statistics, only about 10% of traders are able to pass the funded account challenge at any account level. This means approximately 90% of aspiring funded traders fail the evaluation and are unable to gain access to the firm's capital.

There is nothing inherently scammy about the business model of prop firms. But how do they make money then? For starters, prop firms, of course, do not give money to just anyone who asks. Typically, they have a multi-stage evaluation process to make sure the traders they employ know what they are doing.

Prop trading firms have been shutting down or suspending their services, particularly to U.S.-based clients, because of a crackdown from MetaQuotes, the company behind the popular MetaTrader trading platforms.

It is estimated that only 4% of Forex traders succeed with prop firm challenges, and only 1% of traders can generate profits consistently without violating any rules.

This is a popular way for traders to prove their skills and potentially secure funding from a prop firm. However, passing this challenge can be quite daunting and requires a lot of hard work and dedication.

There is estimated to be a 90% fail rate of traders that take the FTMO challenge. The reason behind this is due to traders chasing the profit target with a time restriction in place. A trader doesnt know when a winning streak might occur, or when they may take a string of drawdowns.

FTMO have told us that 92% of traders fail their challenge (10% in one month). Not sure about the verification stage where you need to make 5% in 2 months. {quote} FTMO have told us that 92% of traders fail their challenge (10% in one month).

To pass the FTP $5,000 account evaluation you need to make a minimum profit of $250 within 14 days while not exceeding a 20% max loss limit if trading forex pairs or 10% loss limit if trading other markets. If successful, traders keep 85% of all subsequent profits made.

What are the negatives of prop firms? ›

- Traders in prop firms often have limited control over the firm's capital. They may need to deposit their own money as collateral or risk management. - Additionally, payouts are subject to the firm's rules, which may restrict a trader's access to profits.

The salary of a prop trader can vary greatly depending on several factors such as experience, performance, and the size of the firm. On average, a junior prop trader can expect to earn anywhere between $50,000 to $100,000 per year, while a senior trader can make upwards of $500,000 annually.

The Volcker Rule is intended to restrict high-risk, speculative trading activity by banks, such as proprietary trading or investing in or sponsoring hedge funds or private equity funds.

Today, MetaQuotes decided to abruptly halt services, due to… Blackbull, like a few other brokerages, took advantage of their MetaTrader license and grey-labeled them to prop trading companies. As confirmed by Lal, the broker only allowed Funding Pips to operate on its “demo servers via MT5.”

Prop firms are an excellent source of accessing further capital to increase profit potential. Passing a prop firm's evaluation means reaching a profit target while staying within its risk management rules. Prop firms require traders to use their brokers, which can be positive or negative depending on the broker.

In conclusion, it can take around 4-5 months to pass a prop firm trading challenge and become a funded trader.

Staying Focused and Disciplined

Avoid distractions and stay focused on your trading strategies. Don't be afraid to take a break if you need it, but always come back with a clear head and renewed energy. Remember that consistency is key, and you can only achieve your goals by staying focused and disciplined.