Prop Trading Firms
Written by
A Sign Of Time
Head of Education & Toodegrees Analyst
Key Summary
- Prop firms provide access to trading capital.
- Traders share profits with the firm.
- Evaluations are often required.
- Rules must be followed strictly.
Description
Proprietary trading firms, or prop firms, allow traders to trade with company capital instead of their own. In return, traders share a percentage of their profits with the firm.
Most prop firms require traders to pass an evaluation phase where they demonstrate consistent profitability and risk management. These challenges often include rules such as maximum drawdown limits and daily loss limits.
Prop firms offer an opportunity for traders to scale without risking personal capital, but success requires discipline and adherence to rules.
Key Questions
Prop Firm Features
| Feature | Description |
|---|---|
| Capital | Provided by firm |
| Profit split | Shared earnings |
| Rules | Drawdown limits |
Prop trading firms are a growing part of the retail trading industry and widely used by developing traders.
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