Proprietary trading firms have become increasingly popular in recent years as they allow experienced traders to use their capital to trade financial instruments and generate profits. This type of trading setup is referred to as a funded trading program, and it allows traders to manage significant amounts of money that they wouldn’t otherwise have access to. Funded trading programs not only provide a source of capital but also offer essential training and coaching to help traders manage emotions and develop risk management strategies. In this article, we will explore the two concepts of funded trading programs, including the source of capital and the importance of trading training. We will also highlight some of the most popular funded trading programs available for traders today.
What is a Proprietary Trading Firm?
Proprietary trading firms refer to companies that specialize in trading financial instruments using their own capital. These firms often hire or train experienced traders, provide them with a certain amount of capital, and allow them to trade in the financial markets to generate profits. Proprietary trading firms typically focus on forex and futures markets and support their traders through training, professional trading tools, and specialized coaching.
As already said, a proprietary trading firm is a company that focuses on hiring or training experienced traders, then invests money in financial instruments to make funds available to the traders. This is referred to as a funded trading program. Depending on the kinds of account sizes the company offers, traders can get financed with $500 to millions. Traders can then utilize their trading tools and expertise to trade and generate profits, after which their share of the profits is given to them.
Many prop trading firms majorly enable trading in the forex and futures markets because the teams behind these prop firms tend to be versatile in these two areas. That helps the team to offer additional support to its traders, which could come from training, professional trading tools, and specialized coaching. These various forms of extra support can enhance the level of success that traders enjoy at these prop firms.
How do prop firms select traders?
Prop firms tend to have an evaluation process to determine traders’ eligibility for their funded trading programs. The evaluation is mainly conducted through a demo account that serves as the evaluation account and allows traders to display the required skills needed to qualify for a funded account. Traders will get capital to trade via a funded account given by the prop firm. The capital is then used for live trading, where the profits and losses determine how long the trader will have that account.
Usually, a prop firm will have rules that will guide the conduct of traders during its evaluation process. While the rules may be similar for many prop firms, there are still some significant differences, as some have more stringent rules than others. Traders interested in prop firms need to be aware of these differences and not assume that all prop firms have the same rules or mode of operation. The rules keep traders in check by giving them clear goals and targets.
Also, there is a formula for dividing the profit (profit split) that traders make since the firm provides the funds while the trader utilizes the funds. Depending on the firm and the trader’s performance, the profit split can range from 50:50 to 90:10, with traders usually taking the higher percentage. Some trading skills prop firms require from traders include risk management and consistent generation of profits.
What is a funded trading program?
Funded trading programs refer to a type of trading setup where an individual trader is provided with a certain amount of capital by a proprietary trading firm to trade in financial markets. In exchange for the capital, the trader is usually required to share a portion of their profits with the proprietary trading firm
What is a funded trading account?
A proprietary trading firm offers a funded trading account to a qualified individual who has successfully passed a trading test (also called Evaluation or challenge).
This allows prop firms to find multiple talented traders in the world that can manage their funds with good benefits, but most importantly, it will enable good traders to manage a good amount of money that they cannot have access to in the real world; we are talking about up to 200000 $ and more.
The company provides login details of a Real account or a Simulated trading account linked to a real account (to prevent significant losses). The trader must manage those funds under some conditions to achieve targeted benefits. (Example: Steps to create an account on Leeloo Trading)
Some proprietary trading firms, like The5ers and City Traders Imperium, offer direct funding, which means you don’t need to pass a test to get the funded trading account. Still, the participation fees are higher than in other programs.
Most popular Funded Trading programs
in the table below, you will find the most popular funded trading programs that attract traders around the world, either Forex traders or Futures traders, with a link to a full review about each platform:
|Futures Programs||Forex Programs|
|Leeloo Trading||Topstep Forex|
|Apex Trader Funding||City Traders Imperium|
Funded Trading Programs: 2 Concepts
1st concept: Source of Capital
In any kind of business, anyone can face this painful situation where you have the knowledge, skills, and winning strategies, but you still need capital to start your business. You need a bank or a company that can trust you according to your skills and knowledge. Forex, stocks, or futures traders also have this same problem. In the last few years, finding a funder has become much easier since the concept of funded trading programs is precisely the solution for this situation. Funded trading programs offer an opportunity for talented traders to trade with a high capital for a meager investment. When the trader has passed a challenge successfully, the proprietary trading firm allows him to trade with a big account and gives him a share of up to 90% of the benefits.
2nd concept: Trading Training
Trading forex, stocks, or futures, is one of the domains that cannot be learned only from books and videos. The Trading domain needs actual practice in the real world. Many people think opening a virtual account is an actual trading practice, but it is not true. One of the most critical factors affecting our trading results is how we can control emotions and manage stress, fear, greed, excitement, frustration, and more. Be 100% sure you cannot learn about everything from a virtual account. With Funded trading accounts, you can experience all those emotions and experiment with your strategies. Also, the beauty of funded trading programs (but some traders may see this as a negative option) is the risk management strategy. Funded trading programs don’t allow you to lose a certain amount of money in a day, a week, or a month and determine a target profit needed for the month; in other words, they force traders to follow their risk management strategy. This is a powerful risk management lesson for any beginner trader who wants to learn more about managing wins and losses.
What are the pros and cons of a funded account for the trader?
Those trading programs have continuously evolved in the last few years since they helped traders, and sometimes non-experienced individuals, learn the best strategies and manage and earn money with minimum investment. Still, these programs also have some disadvantages that should be considered before you start.
Pros of funded trading programs for traders
- Trade a real account with no money: After you pass the paid test or challenge, you will have access to a real account, the value of the account starts from 10000$ to 200000$, and this does not need any investment on your part, but only the participation fees. (example: Check here Leeloo Trading offers for futures traders)
- Trade with no risk of losing your own money: When you manage a funded trading account, you will be sure that you will not lose any of your own money; it is a risk-free trading program. When you lose a trade, it’s not your money; you earn real money when you gain a trade.
- Learn how to trade in the real world: When you open a virtual account in any Forex or Futures trading platform, you do not feel that you are trading in the real market. You can open multiple buys and sells positions without even thinking about it. Therefore many people lose their money immediately when they move to a real account. But with the funded trading programs, even if you are not trading with your own money, but you have the feeling that you are a risk of losing your own money since your goal is to earn, this will help you interact psychologically and cognitively with the market, and test your strategies in the real world, not in a virtual world.
- Get paid a good share of the earnings monthly: at the end of every month, the platform will send you a payment depending on your results. Most of the programs pay between 50% and 90% of your benefits during the trading period, and this allows you to feel that you are not only working for another person but are a natural partner in this win-win contract. Here is a table that shows the split share of every company:
|Topstep Futures||100% of the first $5000, then 80%|
|Leeloo Trading||100% of the first $8000, then 80%|
|FTMO||80% to 90%|
|Apex Trader Funding||100% of the first $25000, then 90%|
|City Traders Imperium||50% to 70%|
- Enhance your risk management strategy: The trading journey is a consistent learning journey, so when you choose to go ahead and enter a funded trading program, you must never forget that the most important thing is to enhance your skills and learn more about different trading strategies and risk management options. Most funded trading programs require you to follow some conditions, including the maximum losses per day, week, or month, a trailing drawdown, a profit target, and maximum contracts (in futures) or leverage (in forex). All this will undoubtedly improve your risk management strategy for good.
- Get certifications and licenses like a professional trader: If you are still practicing in the trading field, getting the certificates and licenses necessary to trade as a professional will be hard. However, funded trading programs help you get the certifications needed as a professional trader, so it will be much easier, even if you want to trade on your own or be a funds manager.
- Work anywhere and anytime: You can open positions in your funded account anytime and anywhere as a funded trader.
Cons of funded trading programs for traders
- You have to pass a paid test or challenge: before you start trading on a real account with real money in it, you must first prove that you are following a winning strategy because proprietary trading firms want to be sure that they are not giving real money in the first contact to an amateur, they have to be sure that you are a good trader and that your strategy is consistent and profitable, this is why all prop firms ask you to pass a trading challenge where you have to respect some rules including max loses and target profit, so when you finally reach your target profit by respecting all regulations, you are ready to start trading on a real account.
- You must respect the rules: Even if you have access to those found, you must respect some rules the program gives. The proprietary firm wants to be sure you are not making them lose a significant amount of money for nothing. Therefore they set some conditions to respect before and during the trading times; this includes max losses, max position size, trailing max drawdown, avoiding trading during news and holidays, and some programs even require keeping consistency. (Example: Check here Earn2Trade rules)
- You must keep trying if you are new: if you are a practice and are still learning about good strategies to trade, it’s very typical if you lose your first challenge. Of course, any good trader was there, but in the funded trading programs, this includes the reset fees for the account. The reset fees start from 70$; this depends on the challenge you choose the first time.
- The prop firm will take part of the profits: for a solo trader, splitting the profits with anyone else is not fair since he does the hard work, but the company provides the trader capital to start, so, typically, they ask for a part of the benefits, some companies ask for up to 50% of profits, but most of them want only 20% of the profits.
What are the Best Prop Trading Firms for Futures?
As mentioned earlier, we will discuss the best prop trading firms for futures and forex. We will now look at some of the most trusted, known, and successful prop firms for futures trading in the funding industry.
Topstep is one of the most trusted and successful prop firms offering funded accounts to trade the futures market. Topstep initially offered funded accounts for trading forex but then brought that to a close and focused exclusively on the futures market. As a result, this prop firm has one of the largest communities of futures traders, with the majority satisfied with the services offered.
Topstep has been around for about twelve years, founded in 2010 by Michael Patak in Chicago. This longevity has helped enhance its reputation and popularity, and it is easy to know the team members behind this prop trading firm. Topstep has 3 account sizes available for futures traders. The evaluation process at Topstep is known as ‘The Trading Combine,’ It is a two-step process where traders can showcase their abilities and become eligible for a funded account.
The first step of the Trading Combine requires a minimum of 5 days for completion, and there are no maximum days, meaning traders can take as long as they want to complete the first step. The second step takes a bit longer as it depends on the performance of a trader. But if the trader is good enough, he can finish it within 4 days.
The three account sizes offered by Topstep are listed below with their respective number of max contracts and monthly price.
- $50K with max contracts of (5) and a fee of $165 per month
- $100K with max contracts of (10) and a fee of $325 per month
- $150K with max contracts of (15) and a fee of $375 per month
It is clear from the above list that the minimum amount of funding is $50K and the maximum amount of financing that a trader can receive from Topstep is $150K. Topstep rules for its futures funded program include:
- Avoid hitting the daily loss limit and trailing drawdown.
- Do not trade outside the stipulated trading periods.
- The minimum trading days are 5 but only in the first step of the Trading Combine.
- Achieve the profit target and adhere to the scaling plan.
- Only trade the allowed instruments.
Topstep offers traders free education.
The first $5,000 in profits belongs entirely to the trader. Subsequent profits are then divided in the 80:20 ratio, the profit split where 80% of the profits goes to the trader while the firm takes the remaining 20%. The firm also offers free simulated trial accounts for 14 days.
Apex trader funding
Apex is another successful prop trading firm that makes funds available to traders interested in futures trading. The goal is to help traders engage in profitable and responsible trading. The firm employs a sustainable model of providing funds to futures traders because it understands the challenges that traders face regarding access to funds for trading.
Darrell Martin founded Apex in 2008, and the firm has flourished since then with a community of over 30,000 traders in more than 150 countries worldwide. The company provided more than $150 million in funds to futures traders, and many of these traders have already withdrawn profits.
The evaluation process at Apex is referred to as the Apex Challenge, and traders need to pass it to become eligible for funding. However, it only involves one step, and once traders pass it, they qualify for a funded account. All that is required of the trader is to achieve the profit target within a minimum of 10 trading days. Below is a list of the account sizes offered by Apex and the corresponding number of contracts and monthly prices.
- $25K with 4 contracts (20 micros) for $147 per month
- $50K with 10 contracts (20 micros) for $167 per month
- $75K with 12 contracts (24 micros) for $187 per month
- $100K with 14 contracts (28 micros) for $207 per month
- $150K with 17 contracts (34 micros) for $297 per month
- $250K with 27 contracts (54 micros) for $517 per month
- $300K with 35 contracts (70 micros) for $657 per month
From the above, the minimum funding available to traders at Apex is $25K, while the maximum is $300K. Some of the rules involved in Apex trader funding include:
- Achieve the profit target
- Avoid hitting the max loss
- Trade for at least 10 trading days
- Do not maintain an open trading position beyond 4:59 PM ET
- Do not provide other people with access to your account
Apex’s beneficial features don’t include the daily drawdown and no scaling plan, which reduce the pressure on traders. Also, traders do not have to pay real-time data fees and NinjaTrader license fees, which cost $55 and $75, respectively.
Leeloo Trading is one of the top prop trading firms in futures trading that provides traders with easy trading rules and fast funding. The mode of operation employed by Leeloo Trading involves a skillful combination of rules and prices, which has enhanced the firm’s reputation and popularity.
Leeloo Trading was founded by a family of ranchers with the leadership of a successful woman named Jody Dahl. The founders are successful livestock owners hence the seemingly weird theme of the website and the litany of images displaying ranches, horses, bulls, and farmers. All of that is just to show the real life of the founders, which makes them more relatable.
The evaluation process at Leeloo Trading is known as Leeloo Challenge, and traders are expected to complete the challenge within at least 10 trading days. The challenge entails achieving the profit target within the stipulated number of days. The account sizes offered by Leeloo Trading are listed below, along with the number of contracts and respective prices:
- $25K with 3 contracts for $150 per month
- $50K with 8 contracts for $180 per month
- $100K with 12 contracts for $220 per month
- $150K with 15 contracts for $305 per month
- $250K with 25 contracts for $525 per month
- $300K with 30 contracts for $675 per month
Like Apex trader funding, Leeloo Trading offers a minimum financing of $25K and a maximum amount of $300K. The Leeloo Trading rules include one primary rule: to avoid hitting the trailing drawdown. Another rule to be aware of is the minimum trading days of 10.
Unlike other prop trading firms, rules like weekly loss limit, daily loss limit, not trading during news or major economic releases, etc. are absent at Leeloo Trading, which means traders registered with this firm have more room for flexibility. The first $12,500 in profits entirely belongs to the trader, while subsequent profits are divided according to the profit split. The profit split was initially 80:20, but it was modified this year to 90:10. Traders now get 90% of their profits after the first $12,500.
Earn2Trade is a prop trading firm that functions as an educational firm. It provides several courses on futures trading, including mentoring sessions and webinars anchored by certified professional traders. Once their trainees complete the educational courses (Bootcamp) or the test known as Gauntlet or Gauntlet Mini, they are offered a funded account to trade the futures market.
Earn2Trade was founded by David Lojko and Ryan Masten in 2016, and other key members of the Earn2Trade team include Csaba Francis Nahoczky, the director of education and client services. Christopher Gray, the lead education coordinator, and Orianna Foucault, the support and candidate relations director.
Below are the account sizes offered by Earn2Trade:
- $25K with up to 3 contracts for $150 per month.
- $50K with up to 6 contracts for $170 per month.
- $75K with up to 9 contracts for $245 per month.
- $100K with up to 12 contracts for $315 per month.
- $150K with up to 15 contracts for $350 per month.
The rules at Earn2Trade include:
- Traders must trade for at least 15 trading days.
- Avoid hitting the maximum daily loss.
- Do not use beyond the allowed contract.
- Only trade during the stipulated times.
- Do not hit the trailing drawdown.
The benefits of Earn2Trade include a comprehensive education system, withdrawals are not restricted, and traders can trade during the news.
What are the Best Prop Trading Firms for Forex?
Let us now examine the best prop trading firms for forex trading.
FTMO is a financial technology firm that was founded in 2014, and it is based in Prague, Czech Republic. They offer one of the most thriving funded trading programs in the industry. FTMO was founded by combining trading systems and multiple ideas about risk and money management.
FTMO offers traders funded accounts to trade the forex market, but their performance will first be evaluated in real-time simulated accounts. This evaluation process consists of two stages known as the FTMO challenge and Verification. The FTMO Challenge involves traders displaying discipline and skills to achieve goals. FTMO uses this step to evaluate traders’ risk management level and expertise.
The Verification stage is where traders become qualified to receive a funded account from FTMO. It tests the consistency of traders, especially their ability to generate profit regularly over an extended period without breaking any FTMO rules.
Some benefits of FTMO include a generous profit split of 90:10 and access to two funded accounts simultaneously, with each having a balance of $200,000. This means traders can have up to $400,000 in trading capital. Traders also gain access to adequate education and trading tools that enhance the possibility of generating profits.
City Traders Imperium
City Traders Imperium or CTI, is a prop trading firm that offers trading capital to selected traders for trading the forex market. It also provides educational services, which include access to proper educational materials and trading tools. CTI is a privately-owned firm that is based in the United Kingdom.
CTI provides up to 4 million dollars in trading capital as long as traders show a propensity for excellent management of such a huge capital. CTI operates by providing a platform for traders to leverage their trading skills while also generating increased profits at an accelerated pace via a funded account from the firm.
There are two ways by which traders can get funded at CTI. The first way is to go through the evaluation process, which will involve traders displaying sufficient trading skills and consistency in trading. The second way is via direct funding, and this does not include an evaluation process, as traders will receive funds directly. This option is also known as the Portfolio Manager, but the rules are more stringent than going through the evaluation process. Moreover, the sign-up fee for direct funding is significantly higher than the sign-up fee for the evaluation.
Some benefits traders enjoy at CTI include professional coaching from experienced and veteran traders, access to valuable educational content, and a wide range of instruments and services for traders to choose from and enjoy.
The5ers is a prop trading firm founded in 2016 and based in Israel. The5ers funded trading program provides trading capital to traders through a funded account which can be used to trade the forex market.
The5ers offers for traders include various account sizes at level 1, in which the funding is instant, but only 25% of the account balance is made available to traders. These funded accounts at level 1 aim to evaluate traders to determine how successful they will be when using their personal trading strategies while adhering to the risk management requirements of the firm.
Once traders achieve the assigned account’s trading objectives, they will access the total balance in that account for trading. The significant rules include achieving the profit target, not violating the max loss limit rules, and adopting a logical approach to using leverage.
Some of the benefits at The5ers include less stringent rules and access to educational materials that are favorable to beginners. In addition, once traders achieve a milestone, their funding gets doubled.
Audacity Capital prop trading firm provides trading capital to forex traders via funded accounts. The trading capital could be up to $500,000, depending on the trader’s capacity. Audacity Capital was founded by Karim Yousfi in 2012 and is based in London.
Audacity Capital prop trading firm doesn’t apply an evaluation test or challenge to determine the eligibility of traders for funding. Instead, the firm does things differently by having specific requirements that traders must meet before they can receive funding. The first step is for traders to apply and fill out a form where they provide a current track record of 3 to 6 months that displays their trading strategy and skills. They will then undergo an interview process where traders’ eligibility is determined.
Once the trader receives approval for funding and the forex account details have been made available, the trader should go through the contract to understand the company’s rules and risk parameters. The significant constraints to be aware of include leverage and lot size, no trading during news or weekends, respecting the 10% fixed drawdown and realizing 10% profits on the account.
Some benefits of being a funded trader at Audacity Capital include a favorable scaling program, adequate trading support, excellent trading conditions, and losses suffered on the account that are not attributed to the trader because the firm bears the losses.
Funded trading programs are an innovative solution to some of the major problems that any trader or new trader can face; first is lack of capital, and second is to learn without losing money.
Any trader with a minimum of dollars can access the trading world where people make significant profits. But do not forget that in any field, scammers want to take advantage of people who do not understand what this is all about.
Don’t worry. You will find on our website all information needed to start as a funded trader, so take your seat and enjoy this learning journey with us.