forex trading

Prop Trading Firms

Daksh Murkute | | |

You will have come across so many traders these days that are getting funded by these prop funds that have popped up.


I too have been coming across many videos and articles on this and it was about time that I wrote about it and cleared some air around it too.


So in this blog post, I’ll not just tell you what prop trading firms are, but also whether you should join them and if they are actually legit.


That’s why I’d suggest that you read this blog post till the end.




What are prop trading firms?


What are prop trading firms?


Proprietary trading firms, or prop trading firms are firms that use their own money to trade in the financial markets.


They do not use any outside money or money raised from clients to engage in the financial markets and this allows them to keep all the profits to themselves.


Now, many such firms hire people, train them, and then give them capital to trade.


These firms will have a proper hiring process where you are applying, your application is screened, you are interviewed, other processes take place, and maybe in the end you get hired.


But, there are also several firms that have been set up that don’t really provide any training as such to the traders, but they just provide them with the capital to trade.


Some prop funds that have this business model are Trader’s Central, FTMO, 5%ers, etc.


These firms are not really hiring traders. The process to join one starts with you applying to them by paying a small fee, you would then need to pass some tests, and then in the end you’ll get the capital to trade.



Should you join a prop trading firm?


Should you join a prop trading firm?


Before you go on and apply to these firms, you should thoroughly understand their entire process.


Several prop funds require you to trade on their demo accounts for some time and you are supposed to reach a profit target they have set.


They also have several rules in place that can lead you to get disqualified.


And yeah, if you want to get funding from them, then to start all these processes, you need to pay a small fee to them.


So before you start the entire process, you should know exactly what you are getting into. Read everything that the firm has mentioned on their website. If you don’t understand anything then reach out to them to get clarification.


Now, should you join a prop trading firm? Do it only if you already have a strategy that works and you have spent some time working on it.


I have seen so many traders come up with a strategy, test it for a couple of weeks, they straight away sign with these prop funds, but eventually, the entire thing fails as their strategy didn’t really work.


So there are lots of things that you need to consider before you actually make the decision to join a prop trading firm.


By the way, if you want to learn strategies that can help you get funded, do check out our YouTube channel. I’ll be uploading strategy videos very soon.


Also Read: Rules-based Day Trading Strategy - Using VWAP Indicator



Is it a scam?


Is it a scam?


So look, in this industry of trading, there are lots of things that were scams and it is really very unfortunate.


Yes, some prop trading firms might be scams but does that mean all of them are scams? Not at all. There are some genuine prop funds out there that actually care for the people that sign up with them.


Now, if you actually want to sign up for such firms, then join only the good and reputed ones.


Such firms actually work towards keeping their reputation good in the market and then won’t indulge in dodgy stuff or scam people.


As I said earlier, do your research properly before you sign up with a prop trading firm and it’s not at all difficult to find the good ones.



What do you think?

Did you already know about such prop trading firms? And what do you think? Are they good?


So tell me, are you planning on signing up for any such prop trading fund to get funded? Which one will you join?


Don’t forget to share this blog post with others and also, feel free to ask me any questions in the comments section below and I’ll answer all of them at the earliest.

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