Are you interested in becoming a forex trader? If yes, you might be confused where to start. When it comes to trading, you have two options – trade with your own money and proprietary trading. Both these options have their own pros and cons.
After becoming a sole trader, you will have to take risks of losing your money. The upside will be you can use your preferred trading styles and you do not have to share profits with anyone. Becoming a sole trader is not ideal for every trader. The main problem for most newbie traders is the lack of enough capital. In this case, you can join a prop trading firm and start trading with its capital.
What is Proprietary Trading?
Proprietary trading is when a trader trades stocks, bonds, currencies, commodities, or other financial instruments with the firm’s own money. Proprietary trading is like a collaboration between the prop trading firm and the trader.
The trader has the trading skills, which can be used in trading the market and making money. The trader has the skills, but doesn’t want to risk his/her hard-earned money or don’t have sufficient money to trade. The prop trading firm has the capital. In this situation, the trader signs up for the prop trading program to trade with the firm’s capital.
By signing up with the prop trading firm, you can trade the forex. Depending on the firm you choose, the rules and guidelines will vary.
How To Join A Prop Firm?
Joining a prop firm is not difficult, but choosing the right prop firm is. There are so many proprietary trading firms out there. Among so many, choosing the right one can be quite difficult. Before joining any firm, the most important thing you need to check is its rules and guidelines. Each company will have different rules for joining, evaluation process, profit sharing, leverage, etc.
Make sure you go through rules and guidelines of each company and then make the right decision. Depending on the prop firm you choose, it might or might not have the evaluation process. Prop firms develop an evaluation process so that they can hire candidates with the best trading skills.
Some prop firms do not have an evaluation process. With such companies, you can start trading with the company’s capital once you sign up and pay the joining fees. If the program has an evaluation process, you need to pass it in order to start trading with its capital. Passing the evaluation process will provide an idea about your trading skills and expertise.
How Many Prop Trading Firms Are There?
Well, knowing the exact figure is quite difficult. There are hundreds of prop trading firms on the web. If you are thinking about trading, it is important to choose the prop trading firm that is well-known and reputable.
Among so many prop trading firms out there, it’s imperative to select one that is right for you. For that, you need to take into consideration various factors like the evaluation process, profit sharing, leverage, rules, restrictions, etc. of the firm.
Best Proprietary Trading Firms
As we have seen, there are so many prop trading firms out there, you must be confused about which one you should select. To help you out with the process, here we have listed some of the best proprietary trading firms in the market:
FTMO
If you think you have good enough forex trading skills, you should get started with FTMO. FTMO is a funded forex trading platform where you can become a trader by passing the evaluation process. The firm has set a two-step evaluation process – FTMO Challenge and Verification. Both the steps have different criteria. In order to become an FTMO trader, you must pass both the steps successfully. Talking about profit sharing, FTMO provides 70% of total profits earned. The good thing about FTMO is, it’s fee amount is refundable. Once you pass the evaluation process, you get the fee amount back.
The 5%ers
The 5%ers is a proprietary trading platform where you can start trading depending on your trading personality. It gives two options – Low Risk and Aggressive. Factors like profit target, leverage, time limit, stop loss, etc. will vary depending on whether you choose the low risk or aggressive plan.
City Traders Imperium
City Traders Imperium (CTI) is a funded trading program and learning platform. The platform will allow you to perform any trading style you are comfortable with. It allows you to trade the news, hedge positions, and also allows you to leave trades overnight and weekend. To become a CTI trader, you must pass the evaluation procedure and get qualified by the platform. Depending on the plan you choose, profit target, stop loss, risk exposure, etc. factor will vary.
Final Verdict
There are currently over 100 reputable prop trading firms in the world, each with their own unique way of doing things. The best proprietary trading firms not only offer a lucrative compensation percentages and bonus packages but also provide an environment that fosters success for traders. If you’re interested in joining one of these top tier companies make sure to check out our amazing prop trading training so we can get you started down the path to freedom.
If you don’t have a lot of money start off with a beginner style prop trading challenge like the $10k one. Also take advantage of the FTMO Free 2 week trial and continue to blast away on that until you are passing consistently before paying out the money. This will get you used to raw spread brokers as well which are different. We use tradingview for our charting needs and with raw spreads FXCM seems to be the closest feed.
The main thing with the strategy you bring to a prop trading firm is you need a stop loss and you will need to have little drawdown which can be simply risking less as well. If this is the case CTI is probably the way to go as you have lots more time to pass the initial challenge.
