5 Best Prop Trading Firms For 2024 (2024)

Prop trading firms fund talented traders who prove their skills through an application process, providing a way to make large returns from the financial markets without risking your own capital.

Our experts have compared a long row of companies to bring you our list of top prop trading firms,reviewing key factors:

How To Choose A Prop Trading Firm

A large number of prop trading firms now compete to attract retail investors, so our experts consider the most important factors for this type of trading and compare firms according to these criteria:

Trust

Traders at prop firms may not be risking their own capital in trades, but the question of trust is still all-important.

We’ve found some so-called prop firms in fact attempt to earn money from traders by selling them expensive courses before they are allowed to start trading. Others impose harsh fines on traders if they do not meet stringent criteria written into the terms and conditions.

To ensure that we are directing traders to honest firms, we carefully review the terms of every prop firm we recommend, as well as check the regulatory status of partner brokers and ensure that all licences are still valid.

How To Qualify

Traders can’t usually just sign up with a prop firm and start trading. Instead, they will need to prove their skills by passing a trading test, which mostly involves meeting specific trading targets over a set period.

Many prop firms charge heavily for qualifiers that will need to be repeated until targets are met, so we recommend prop trading firms that price them reasonably and set achievable goals for prospective traders.

Besides the up-front cost of entering a qualifying challenge, traders are also often expected to pay a running membership fee while signed up with a prop firm.

We only recommend firms that charge a reasonable fee which will allow traders to take home profit, and we especially like those with flexible pricing models that allow traders to choose between reduced fees and increased profit splits.

Available Funding

The biggest advantage of trading with a prop firm is the chance to access large sums of capital without risking your own money, allowing you to benefit from significant trading power with lower personal risk.

Traders at prop firms might have to start trading with a relatively small amount, but can usually increase their funding by completing trading goals.

So, one of our priorities when we assess prop trading firms is to evaluate how much funding they provide traders and whether the highest funding levels are accessible.

We favor prop trading firms that give traders access to $50,000+ without having to fulfil an excessive amount of trading goals.

How Profits Are Split

Good prop trading firms make their money from a split of profits earned by traders and not from fines or training charges; the best will offer traders a fair split that can significantly exceed 50%.

When we review prop trading firms, we look for the ones that give traders the most competitive split of profits and which do not try to make money from traders through unfair charges.

It is also crucial for traders to be able to access their profits fairly and frequently, so we always review the terms and conditions for withdrawals and prefer firms that provide access to earnings at least every month.

Assets & Markets

Whether it is forex, commodities, stocks or crypto, a trader will need access to the instruments they are strongest trading to get the most from a partnership with a prop firm.

The majority of our top prop trading firms offer a range of asset classes to ensure that traders can reach their markets of choice, hedge when necessary and not miss out on trading opportunities.

Trading Platform & Tools

As it is used to analyze markets and execute trades, the trading platform is among the most crucial of all the tools that a prop trader will use.

Additional charting, research and analysis tools can also greatly enhance a trader’s ability.

We look for prop trading firms that offer industry-leading platforms like MetaTrader 4, and supplement these with a full suite of top-level trading tools available at low or no extra cost.

FAQ

What Is Prop Trading?

A prop trading firm makes money by partnering with talented traders and providing capital upfront for them to invest in financial markets.

Both sides benefit as the trader is given access to large amounts of funding to trade with at low personal risk, while the firm profits from their winning trades while limiting risks through a qualification process and drawdown rules preventing sustained losses.

How Do I Start Prop Trading?

Traders will usually need to complete a challenge to qualify to sign up with a prop trading firm. This often involves trading on a paper trading account for a set period – usually one month – and achieving trading targets. A common requirement is to gain 10% profit during the one-month challenge.

Some prop firms forego the challenge and instead require traders to demonstrate their trading knowledge and experience during an interview process.

How Do Prop Trading Firms Provide Funding?

The funding provided to prop traders will come from the firm’s own capital, with traders not expected to contribute their own funds. Rather, traders will usually pay to enter the qualifying challenge, and may also be expected to pay membership charges to access tools and data.

Qualifying traders may be given a low initial funding amount and required to fulfil additional trading goals to increase their capital. For example, a trader at prop firm Audacity Capital starts with a $15,000 pot but can double this by earning 10% profit in a month.

What Happens If I Lose Money While Prop Trading?

Prop trading firms shoulder the financial risk of losing trades themselves, but that doesn’t mean traders have free rein to take excessive risks.

Since a maximum drawdown limit is in place, traders risk losing their funded accounts if they lose too much of the prop firm’s capital. Additionally, many prop firms impose limits on the amount of capital traders can lose in a single trade, discouraging risky, highly leveraged bets.

And, although the trader’s money won’t directly be lost in a bad trade, they will still have to factor in the amounts they spent to go through the qualification process and pay for membership.

Are Prop Trading Firms Regulated?

Unlike brokers, prop trading firms are not usually required to register with a financial regulator. This makes it more difficult to distinguish honest from dishonest firms, so traders should carefully research before signing up and avoid any that offer guaranteed profits.

Note that many prop trading firms partner with a broker, and these are bound to normal regulatory practices, so you should ensure that any broker you trade with through a prop firm is overseen by a trusted watchdog.

Is It Safe To Trade With A Prop Firm?

Good prop firms are an excellent way for talented traders to make money – they reduce personal risk and provide capital that is often far more than what is available to an individual.

However, even with trustworthy firms, a trader risks losing their time and money during the qualification process if they are unable to pass, so it is a good idea to apply for a prop firm that doesn’t charge retake fees.

It is also wise to watch out for firms that promise traders large amounts of profit through funded trading at the end of expensive trading courses. There’s a good chance these firms are making their money by selling courses to novice traders and not by splitting profits with them.

Which Are The Best Prop Trading Firms?

The best prop trading firms support trading on a wide range of markets and allow their traders to flourish and earn high profit splits without charging excessively for qualifiers or membership rates.

All of our top prop trading firms meet this criteria, so check our list to find the best provider for you.