Getting started with prop firms

What is a prop firm?

A prop firm (proprietary trading firm) gives you access to a trading account larger than you would trade on your own: $25,000, $50,000, $100,000 or more. In return, you pay a sign-up fee and follow its rules.

If you pass its evaluation, you get a "funded" account and keep a share of the profits, often 80 to 90%. At most firms this account is still simulated: your earnings are paid by the firm, not by the market.

How a challenge works

There are four main models:

• 1-step evaluation: one profit target to reach without breaking the rules, then the funded account.
• 2-step evaluation: two targets in a row, usually easier each, before the funded account (common in forex).
• Monthly subscription: you pay each month until you pass (common in futures), then often an activation fee.
• Instant funding: no evaluation, but a higher price and stricter rules on the funded account.

Once funded, you request payouts (withdrawals) on the firm's schedule.

The rules that make traders fail

The hard part is almost never the profit target. It's the loss limits. Read them before you buy:

• Maximum drawdown: the total loss allowed. If it's "static", the limit stays put. If it's "trailing", it rises with your gains: one winning trade followed by a losing one can be enough to fail.
• Intraday or end-of-day (EOD) trailing: intraday, the limit follows your account's high while trades are open, which is much harsher than a limit computed at the close.
• Daily loss limit: a maximum loss per day, on top of the total drawdown.
• Consistency rule: no single day may account for more than a set share of your profits (for example 40%). One big day can block your payout.
• News trading, minimum duration, minimum trading days: less visible, but just as final.

Our glossary explains each term with examples.

The true cost of a funded account

The sticker price is only part of the bill. A large majority of candidates fail their first attempt, and many need several. Add:

• the price of each new attempt, or resets if the firm offers them;
• the months of subscription for monthly evaluations;
• the activation fee for the funded account, when there is one.

Our true cost calculator adds this up for every plan and shows the payout you need to break even.

How payouts work

Each firm has its own withdrawal rules: frequency (on demand, weekly, every two weeks…), required winning days, minimum and maximum amounts, a buffer to leave in the account, and the profit split.

Also check the payout methods: bank transfer, Rise, crypto… and whether they work from your country.

Choosing your first prop firm

A few questions to ask, in order:

• Which market? Futures (CME) or forex/CFDs, depending on what you already trade.
• Which platform? Pick a firm that supports the one you know.
• What total budget, attempts included? Start with a small account rather than the biggest.
• Which drawdown type? A static or EOD drawdown is more forgiving than intraday trailing.
• Is there a consistency rule or daily limit that clashes with how you trade?
• Can you get paid from your country, and with which method?

The comparison page lets you filter on all of these and put up to 4 plans side by side.

The risks

Trading carries a high risk of loss. Challenge fees are an expense, not an investment: most traders don't earn back what they paid. Never use money you need.

Rules change often. We date every check, but always reread the firm's official terms before you buy.