Prop Firm Guide
Trade with a firm's money? Read this before you pay for a challenge.
Slav: "So they give me $100,000 to trade?"
Max: "They let you try, after you pay a fee and follow their rules. Let's read the rules first."
Max: "They let you try, after you pay a fee and follow their rules. Let's read the rules first."
What is a prop firm?
A proprietary ("prop") trading firm lets traders trade with the firm's capital, or with a simulated account linked to it, and share the profits. Most retail prop firms today work through a paid evaluation, often called a challenge: you pay a fee, trade a demo account under strict rules, and if you pass, you get a "funded" account with a profit split.
How a typical challenge works
- Pay the fee. Usually based on account size: bigger accounts cost more.
- Phase 1: reach a profit target without breaking any rule.
- Phase 2 (some firms): a second, often smaller, target.
- Funded stage: trade under the same rules and request payouts of your share of profits.
The rules that end most challenges
| Rule | What it means | Why traders fail it |
|---|---|---|
| Profit target | Make a set % gain on the account. | Traders take too much risk to "hurry up." |
| Daily loss limit | You can't lose more than a set % in one day. | One revenge trade after a loss. |
| Max drawdown | Total account loss limit, sometimes "trailing" (it moves up with your profits). | Trailing drawdown is misunderstood. |
| Minimum trading days | Trade on at least a set number of days. | Forgetting to count days. |
| Consistency rules | No single day can be too large a share of total profit. | One lucky day breaks the rule. |
| News / weekend / strategy rules | Limits on trading news, holding over weekends, or certain strategies. | Not reading the terms. |
Risks to know
- Most traders don't pass. The fee is lost when you break a rule.
- The firm can change rules, refuse payouts it believes break its terms, or shut down. Several prop firms have closed suddenly in recent years.
- Many firms are not regulated like brokers are. Your protection depends on their terms.
- It's easy to keep buying challenges after failing. Set a strict budget for fees, just like a trading loss limit.
Checklist before you buy a challenge
- How long has the firm been operating, and is there evidence it pays traders?
- Who is its broker or liquidity provider, and which platform do you trade on?
- Is the drawdown static or trailing, and how is the daily loss calculated?
- What are the payout rules: minimum days, frequency, split, and fees?
- Which strategies, instruments and news trading are allowed?
- Is the fee refundable, and when?
- Can I pass this with my normal risk per trade, without gambling?
Prop firm comparison
Firms change their rules and prices often. Always check the firm's website before buying.
| Firm | Markets | Challenge fee (example size) | Profit target | Daily loss | Max drawdown | Profit split | Link |
|---|---|---|---|---|---|---|---|
| FIRM_NAME_1 | – | – | – | – | – | – | Visit |
| FIRM_NAME_2 | – | – | – | – | – | – | Visit |
| FIRM_NAME_3 | – | – | – | – | – | – | Visit |
Practice the rules first: use the position size calculator to keep every trade inside the daily loss limit.