Prop Firms

Prop firms are becoming more and more popular among Forex traders, both new and experienced ones. A prop firm is a firm that provides a trader access to capital for them to trade on the firm’s behalf. Of course, a firm would not give money to anybody just to lose them completely.

What is prop trading in Forex?

An alternative to trading Forex with your own funds through  is to trade with a proprietary FX trading firm using the funds provided by the prop firm itself.

A Forex prop firm is a company that evaluates a trader’s skills (usually via a trading challenge) and assigns its own trading capital for the trader to operate with. The aim of the challenge (evaluation) period is for the firm to get to know whether the trader is qualified and whether they are capable of trading under company’s money management rules.

Trading with a prop firm usually involves some kind of a fee  be it an entry fee to get evaluated by the firm or a monthly fee to keep trading with the firm’s capital.

Profit earned by a Forex trader with a prop firm is usually shared using a scheme like 60%/40% or similar.

Overall, a Forex prop firm is one of the best ways for a confident profitable trader to get funded and start earning money in the foreign exchange market.

However, one has to be aware of the pros and cons associated with FX prop trading. Such trading only makes sense if the pros are outweighing the cons in your particular case as prop trading is definitely not for everyone.

Advantages and disadvantages

Advantages

Disadvantages

Top 4 Forex prop firms

Despite some disadvantages, prop firms remain one of the most accessible ways to earn real money for retail traders. You can browse our list of the best 4 Forex prop firms to find the company that fits your requirements:

1. PipFarm

PipFarm’s restrictions on trading are rather lax compared to other proprietary trading firms. Their challenge is just a simple 1 stage with maximum duration of 360 days. You can trade through news and weekends and there are no trading consistency requirements.

Funding programs

PipFarm offers seven starting programs:

1

2

3

4

5

6

Funded programs are scaled every 30 days if profit target of 12% is attained.

You choose to pass either a 1-stage challenge as outlined above or divide it into two stages with half the target for each stage. For example, if you choose a 2-stage challenge with $100,000 funding, you have to achieve at least $6,000 profit during the first stage and the same $6,000 during the second stage; everything else remains the same compared with the 1-stage challenge process.

Main conditions

Profit target:

12% for 1-stage, 6% for 2-stage

Daily drawdown limit:

3%

Maximum drawdown limit:

Scaled profit share system

You earn XP by taking and passing challenges, passing verification, receiving payouts, and scaling funding.

Instant funding programs from PipFarm

PipFarm also offers a range of programs to pass to funds trading without evaluation period.

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2

3

4

All instant funding programs work under following conditions:

PipFarm prop firm parameters

Minimum trading days:

3 days

Account currency:

US dollar

Leverage:

up to 1:50. The leverage is dynamic and scales down with the current exposure volume in a given trading symbol.

Trading instruments:

Forex, commodities, indices, cryptocurrencies.

Commission:

$6/lot round trip

Trading platform:

cTrader

Free trial:

No

Payment options:

Rise, bank transfer, PayPal, cryptocurrencies, Payoneer, Revolut, Wise, Coinbase, Binance, Skrill.

EarnForex rating:

⭐⭐⭐⭐⭐ (5/5)

2. FTUK

FTUK provides a scaling account size. A trader starts at level 1 account and can go up to level 7 (level 8 available as an addon). Each level has an increased account size as well as other benefits. To reach a new level, a trader needs to achieve a profit target.

FTUK offers two funding programs:

Registration fee and account size: Funds on your account can be in one of the three currencies: USD, EUR, GBP. To save space, the following list will only show the values in dollars. The list has the following format: registration fees for evaluation/instant funding accounts – starting account size at level 1 – maximum account size at level 7.

Profit target:

10%

Maximum overall drawdown:

8%

Leverage:

Depends on the account level. Up to 1:100.

Trade instruments:

Forex, metals, indices, commodities, and cryptocurrencies.

Addons:

FTUK offers a variety of powerful addons. Unlock level 8 (essentially, double the maximum trading capital) — +10% to the fee (free with a special promotion). Joining fee refund — +15% to the fee. Evaluation retake — + 50% to the fee. No stop-loss — + 20%.

Minimum trading days:

None.

EarnForex rating:

⭐⭐⭐⭐⭐ (5/5)

3. FTMO

Challenge:

unlimited period, minimum 4 trading days

Profit/loss:

maximum 5% daily loss and 10% total loss, 10% profit target during the first period (5% for the second period), EUR155/EUR345/EUR540/ EUR1,080 fee (based on the account size).

Fee refundable

with the first profit split.

Funded conditions:

5% max daily loss

News trading:

Allowed in swing accounts, restricted depending on the instrument and the news event on the funded accounts, not restricted during challenge.

Balance sizes:

$10,000 / $25,000 / $50,000 / $100,000 / $200,000

EarnForex rating:

⭐⭐⭐⭐⭐ (5/5)

4. The 5%ers

The 5%ers offer three schemes to choose from:

1. Hyper Growth Program with three balance options. All options support up to $4M growth with an extended 10% profit target, 1:30 leverage, no time limit for evaluation, and payout split up to 100%/0% after funding:

$10K

start with $5K, stop-out $4.7K, 50%/50% payout split — $260 fee.

$20K

start with $10K, stop-out $9.4K, 50%/50% payout split — $450 fee.

$40K

start with $20K, stop-out $18.8K, 50%/50% payout split — $850 fee.

2. High-Stakes Challenge — a high-risk high-reward scaling program with 2-step evaluation:

Account Size/Cost:

$5K/$39; $20K/$165; $60K/$300; $100K/$495. Refunded after successfully completing the Step 2 of evaluation.

Max trading period:

Unlimited

Minimum profitable days:

3 during evaluation, 3 for scaling of funded accounts.

Maximum daily loss:

5%

Maximum loss:

10%

Profit target:

Step1 – 8%; Step 2 – 5%; Funded – 10% for scaling.

3. 100K Bootcamp — three challenges with 6% profit target, 5% max loss, 1:10 leverage, and no time limit. Stop-loss risking no more than 2% of account balance required in all positions and orders.

Account size/Cost: $20,000/Free; $100,000/$95; $250,000/$225.

Challenge #1:

$5K/$25K/$100K start

Challenge #2:

$10K/$50K/$150K start

Challenge #3:

$15K/$75K/$200K start

Funded conditions:

$20K/$100K/$250K-$4M balance, 5% profit target, 4% max loss, 1:10 leverage, up to 100%/0% profit split (starts with 50%/50%), additional $205/$350 fee for $100K/$250K accounts.

News trading:

Allowed with some restrictions (including no execution of orders 2 minutes before and after the event for the High-Stakes Program)

 

Account currencies:

US dollar

Trading instruments:

Forex, gold & silver, indices, Bitcoin, Ethereum, crude oil

Commission:

$4/lot round trip

EarnForex rating:

⭐⭐⭐⭐⭐ (5/5)

4. The 5%Guide to choosing the best Forex prop firm

Going with a prop firm that is right for your trading style and financial goals in crucial. Although choosing the best one seems to be a non-trivial process, you can easily accomplish this by following our guide to choosing a prop firm.

Why are you joining a prop firm? Do you need more funds? Do you want to learn to trade under strict risk controls? Is evaluation period suitable for you or is it too long? Will you have place to grow or will you be limited to the same 100k account? All these questions need to be answered if you wish to find your perfect prop firm.

There is no regulation in the retail prop trading industry. That is why a company’s reputation is paramount. Was it around for a few years? Was it founded by someone you know from the trading community? Do you like how their representatives interact with the community? Many traders rely on TrustPilot ratings nowadays, but those can be (and in some cases are) manipulated.

 

 

 

 

Does the prop firm have currency pairs you need? Do they have CFDs you want to trade? If you specialize in some exotic currency pair or other trading instrument, it is best to make sure that you can trade it on a chosen website.

 

 

 

 
 

Are you OK with 50/50 or do you think that 80/20 is fairer? The issue of a profit split is deeply interconnected with the fee structure, so sometimes you need to balance out what you pay in fees with what you pay in profit splits.

 

 

 

 
 
 

You don’t want to overpay, especially if you aren’t getting back any substantial improvements. When considering prop firms that work based on monthly fees, consider whether your profit will exceed monthly fees. Watch for fee reimbursement options when dealing with a profit split company.

 
 
 

Forex proprietary trading firms FAQ

Is prop trading legal?

This depends on the jurisdictions involved. Normally, it is legal for the prop firm to offer a platform and share of profits for a fee. In most countries, it is usually legal for traders to work with such a company. However, you should consult your local lawyer to be 100% sure whether Forex prop trading is legal where you live.

Do prop firms only offer Forex pairs?

No, prop firms also offer CFDs for indices and futures. Some prop firms, in fact, only offer futures trading. So no, prop trading isn't limited to currency pairs.

Can I earn for a living with prop trading?

Although it might seem like an easy opportunity to earn money, prop trading is still very risky. Its main advantage is that you don't need to commit a lot of your own capital to get started. Whether what you earn will be enough to cover your living costs will depend on your proficiency as a trader and the actual cost of your living.

Is there such a thing as the best prop firm in Forex?

No, each firm has its own pros and cons depending on their trading conditions and trader's methods and goals. If you need a company that has weekly payouts, a prop firm with excellent trading conditions that is paying out monthly won't be the best one for you. Or if you are looking for 1:500 leverage, a company with 1:30 leverage that satisfy all your other needs will likely be a subpar choice for you.

Conclusion

In general, a prop firm is a great way to get started in Forex and financial trading in general if you lack substantial starting funds on your own. For better off traders, prop trading is still a convenient path to better risk management and self-control.

 

Prop firms