Proprietary trading is a way to trade on the Forex market with borrowed funds. Traders Union experts have analyzed this market and selected the best Forex prop firm options.
Prop firms have recently grown extremely popular among Forex traders since these entities allow you to start trading currency pairs without any significant capital. That means you just need your skills and experience to start making serious profits on the Forex market. In their latest Traders Union article, the company’s experts have selected the best Forex prop firms on the market and analyzed lots of other options for traders to explain the main pros and cons of prop trading.
How prop trading works
Basically, prop trading firms are similar to common Forex brokers: both of them provide you access to financial markets and all kinds of additional features to make trading more convenient and successful for you. However, there is also a big difference: while Forex brokers aim to attract as many traders as possible, prop firms allow traders to create a funded account only after a complex verification process, so only experienced and skillful brokers are welcome. The reason behind that difference is simple: the majority of Forex brokers require that you make a deposit first and then use it for trading, but the main advantage of prop firms is that they give you their own money for trading. That means you must prove your skills first.
Traders Union experts have analyzed the prop trading market and found that each prop company has its testing procedure that sometimes requires up to 90 days. Most of these tests look like this: the company gives you a relatively small amount of money that you can use for trading. If you can keep a certain profitability rate over the entire course of your evaluation process, you’ll be accepted as a fully funded trader. Funded traders get larger amounts of money for trading and enjoy more interesting split rates: some prop firms allow you to withdraw up to 90% of your overall profits while only 10% goes to the company itself.
Best prop trading firms
There are dozens of prop firms on the market, but these are one of the bests according to Traders Union:
- Earn2Trade — a well-known US-based prop firm that allows you to get up to $200,000 as the initial capital when you become a funded trader. Your profits are split 80/20, and your monthly payment is just $90.
- FTMO — one of the largest prop firms in the world, it has more than 10,000 funded traders on the trading platform that offers a notably high rate of profit splitting: 90/10. The upper limit for your funding is $2 million, but the evaluation process is long and complex.
- Topstep — another great prop firm for Forex traders that allows you to keep your first profit.
In total, the rating of the best prop firms includes 7 companies. In addition to those mentioned above, these are Fidelcrest, The 5%ers, BluFX, Funded Trader.