Prop Firm Reviews

What is a Proprietary Trading Firm?

A proprietary trading firm, aka prop firm, provides skilled traders with the firm’s capital to trade financial markets in exchange for a share of the profits.

Instead of using their own money, forex traders trade firm-funded accounts and follow specific risk management rules.

Prop firms evaluate traders through challenges before granting access to funded accounts, making them a popular choice for those looking to scale their trading without personal risk.

What are the Benefits of Prop Trading?

Prop trading allows profitable traders to access significant capital without risking their own money. Most firms offer profit splits of 70-90%, meaning experienced traders can earn a substantial income with consistent performance.

Other benefits include access to advanced trading platforms, leverage, and risk management tools, as well as the ability to trade a variety of financial markets, including forex, stocks, and futures.

What are the Disadvantages of Prop Trading?

The main disadvantage of prop trading is the challenge phase, which requires traders to meet strict profit targets while adhering to risk rules. Many traders fail these evaluations and lose the upfront fees.

Some proprietary trading firms also operate with simulated accounts instead of live market execution, meaning performance conditions may not fully reflect real trading environments. Additionally, withdrawal policies and profit-sharing structures vary, so careful research is required.

How Prop Trading Firms Operate

Prop firms fall into two main categories: broker-backed and independent.

• Broker-backed prop firms partner with regulated brokers, offering traders direct market access, real execution, and fast payouts. Examples include Blueberry Funded, IC Funded, and DNA Funded.
• Independent prop firms operate without broker affiliation and often use simulated trading environments. These firms make money primarily from challenge fees and profit splits rather than actual market trading. Examples include FTMO, The Funded Trader, and Seacrest Funded (formally known as MyFundedFX).

How Prop Firms Make Money

Prop firms make money primarily through challenge fees, profit splits, and trading costs. Traders pay an upfront fee to attempt a challenge, and since many fail, this provides firms with steady income. Once a trader is funded, the firm takes a percentage of their profits, typically 10-30%, as part of the funding agreement.

Some firms, especially broker-backed ones, also earn from spreads, commissions, and platform fees, as they are connected to regulated brokers. Understanding how a prop firm makes money can help you choose one that aligns with your trading skills and goals.

The Prop Evaluation Process

Prop firms use different challenge structures to assess traders before granting access to funded accounts. Some challenges are straightforward, while others have additional evaluation steps or cater to specific trading styles.

Alternatively, you may opt for instant funding which skips the initial evaluation process altogether and takes you straight to an instant funding account.

1. One-Step Evaluations

One-step evaluations require traders to meet profit targets and risk criteria in a single phase. These are quicker to complete but may have stricter rules on drawdown limits. Examples include FundedNext Express and DNA Funded’s Single Helix Challenge.

2. Two-Step Evaluations

Two-step challenges involve an initial phase with a profit target, followed by a second verification phase with a lower target. This model is common among major firms like OANDA Prop Trader, IC Markets, and BrightFunded.

3. Three-Step Evaluations

Three-step evaluations are less common but offer a more gradual qualification process. Traders must pass multiple profit targets, often with increasing account sizes or risk limits. Some firms offer these models for traders who prefer a structured, long-term approach. FXIFY and ThinkCapital both offer three-step challenges for those wanting a more conservative approach to prop trading.

4. Rapid Challenges

Rapid challenges allow traders to qualify for funded accounts within a shorter timeframe, usually 7 days, with lower profit targets but higher entry fees. These are designed for experienced traders looking for a fast-track evaluation process, and offered by DNA Funded and Blueberry Funded.

5. Instant Funding Programs

Instant funding accounts bypass the evaluation stage, allowing skilled traders to start with a funded account immediately. Yet, these instant funding accounts typically require a high upfront fee and offer lower profit splits. FXIFY is a top prop firm offering instant funding.

Funded Accounts

After successfully completing prop firm’s challenge, you receive a funded account where you can trade using the firm’s capital. However, not all funded accounts operate the same way.

Some firms offer live market execution, while others use simulated trading environments even at the funded trader stage.

Live Funded Trading

In live funded accounts, your trades go directly into the real market, meaning spreads, slippage, and execution speeds reflect actual trading conditions. Broker-backed firms like Blueberry Funded and IC Funded typically offer live accounts, ensuring more transparent trading and reliable payouts.

Simulated Trading

Some prop firms keep traders on simulated accounts, meaning trades do not impact the real market. Instead, performance is tracked within the firm’s system, and payouts are made based on results. While this allows firms to reduce risk, it can lead to differences in execution, spreads, and slippage compared to live accounts.

Profit Splits

Most prop firms offer 70-90% profit splits, meaning you keep the majority of your earnings. Some firms, like BrightFunded, allow traders to scale up to a 100% profit share over time. Payout structures vary, with some firms offering weekly withdrawals, while others require a minimum trading period before you can cash out.

Choosing the Right Prop Firm

Finding the best prop firm depends on your trading goals, strategy, and experience level. Some firms offer higher profit splits, while others have easier challenges or access to specific financial markets.

Our methodology at PropFirms is to evaluate prop firms based on these seven key factors:

1. Evaluation Process: Prop firms have different challenge structures. One-step evaluations are faster but stricter, while two-step evaluations offer more flexibility. Consider the challenge rules, profit targets, and drawdown limits before choosing a firm.
2. Costs and Fees: Challenge fees range from $100 to $1,000+, and some of the cheapest prop firms refund the fee on your first payout. Be aware of hidden costs like high commission fees, or ongoing monthly fees for platforms and futures exchanges.
3. Profit Splits and Payouts: Most firms offer 70-90% profit splits, meaning you keep most of your profits. Check the payout frequency—some firms pay weekly, while others have a 30-day minimum trading period before withdrawals.
4. Markets and Instruments:Most firms support forex, but if you trade stocks, futures, or crypto, look for firms that allow it. Some specialize as futures prop firms, crypto prop firms, or stock prop firms. Others offer swing trading accounts for holding positions overnight.
5. Trading Platforms and Execution: Some firms provide live market execution, while others use simulated demo accounts. Broker-backed firms typically offer tighter spreads, lower commissions, and faster order execution.
6. Customer Support and Community: Reliable support is essential, especially if issues arise with payouts or platform access. Look for firms with live chat, email, and phone support, as well as active trader communities like Discord that provide insights and assistance.
7. Trust and Reputation: Research trader reviews, payout histories, and firm transparency. Avoid firms with frequent complaints about payout delays, sudden trading rule changes, or poor customer service. A well-established prop firm with a strong reputation is usually a safer choice.

How to Start Trading in a Prop Challenge

To start trading in a prop challenge, follow these steps:

1. Choose a prop firm: Compare evaluation models, fees, and payouts.
2. Sign up and pay the challenge fee: This gives access to a demo or simulated account for the evaluation phase.
3. Trade within the prop firm’s rules: Follow risk parameters, profit targets, and daily drawdown limits.
4. Pass the challenge: Meet all requirements to progress to a funded account.
5. Start as a funded trader: Earn real payouts based on the firm’s profit split model.

Successful traders prioritize risk management by limiting losses, avoiding over-leverage, and maintaining a disciplined strategy.

Best Prop Trading Platforms

Choosing the right trading platform is key to success in prop trading. There are two main types of platforms: shared and proprietary.

• Shared Platforms: Shared platforms, like MetaTrader 4 (MT4) and cTrader, are popular across many prop firms. The advantage is that they’re familiar and reduce the need to learn a new system if you switch firms.
• Proprietary Platforms: Proprietary platforms are developed by individual prop firms and often include unique features tailored to their traders. While these may offer specialised tools, they can take more time to learn

MetaTrader 4 by MetaQuotes (MT4)

MT4 is widely used in prop trading due to its strong analytical tools and fast execution.

• Charts and Indicators: Nine interactive charts, 30 technical indicators, and 23 analytical tools to help with market analysis.
• Automated Trading: Supports Expert Advisors (EAs) for automated trading strategies.
• Copy Trading: Allows traders to follow and copy the trades of others.

Advantages

• Familiarity: Commonly supported by many firms, making it easy to switch.
• Customisation: Highly customisable interface.
• Community Support: Large user base with plenty of resources.

cTrader by Spotware

cTrader is known for its modern design and advanced trading features.

• Advanced Tools: Includes level II pricing and various order types.
• Automated Trading: cTrader Automate allows for the creation of custom trading strategies using C#.
• Copy Trading: Integrated feature to copy successful traders.
• Open API: Allows traders to build custom applications.

Advantages

• User-Friendly: Modern and easy-to-use interface.
• Accessibility: Available on mobile and web, making it flexible for on-the-go trading.