Everything you need to know about proprietary trading firms, from choosing your first challenge to withdrawing profits from a funded account.
Proprietary trading (prop trading) is a model where a firm provides traders with capital to trade financial markets. Instead of risking your own money, you trade with the firm's funds and keep a significant share of the profits — typically 70% to 90%.
To access this capital, traders must first pass an evaluation challenge that tests their ability to generate consistent profits while managing risk. The challenge acts as a filter, ensuring that only skilled traders receive funded accounts. Once funded, traders can earn substantial income without the barrier of needing large personal capital.
The prop trading industry has grown rapidly, with over 50 firms now offering funded accounts across forex, futures, indices, commodities, and crypto. Each firm has its own rules, pricing, and payout structure — which is why comparing them thoroughly before committing is essential.
Research and compare proprietary trading firms based on pricing, profit splits, trading rules, payout speed, and community reviews. Each firm has different strengths — some excel in forex, others in futures. Look for firms with transparent rules, verified payouts, and strong trader reviews.
Browse all prop firmsPick an evaluation challenge that matches your trading style and budget. Challenges come in different account sizes ($5K to $400K+), step formats (instant, 1-step, 2-step, 3-step), and price points. Larger accounts offer higher earning potential but cost more upfront.
Compare challengesTrade the challenge account and hit the required profit target while staying within drawdown limits. Most challenges require 8-10% profit in Phase 1 and 5% in Phase 2, with a daily loss limit of 3-5% and a maximum drawdown of 6-12%. Follow all trading rules carefully — one hard violation means instant failure.
Once you pass the evaluation, you receive a funded trading account with real capital from the firm. Your initial challenge fee may be refunded with your first payout. You now trade the firm's money while keeping 70-90% of the profits you generate.
Trade your funded account, follow the firm's rules, and request regular payouts. Most firms offer bi-weekly or monthly withdrawals via bank wire, crypto, or PayPal. Consistent performance can unlock scaling programs that increase your account size and profit split over time.
View payout detailsUnderstanding these fundamental concepts is essential before purchasing any prop firm challenge.
The percentage of trading profits you keep from your funded account. Industry standard ranges from 70% to 90%, with some firms offering up to 100% through scaling programs.
The maximum amount your account can lose from its highest point. Can be static (fixed from starting balance) or trailing (moves up with your highest equity). Exceeding the drawdown limit terminates your account.
The maximum loss allowed in a single trading day, typically 3-5% of your starting daily balance. Breaching this limit closes all positions and may fail your challenge or funded account.
The minimum profit percentage you must achieve to pass a challenge phase. Typically 8-10% for Phase 1 and 5% for Phase 2 in two-step evaluations.
A reward program that increases your account size and profit split after consecutive profitable payouts. Common scaling increments are 25-50% account growth every 3-4 months of consistent performance.
Looking for futures-specific firms? Browse futures prop firms
Every prop firm enforces rules to manage risk. Violating a hard rule results in immediate account termination. Here are the most common rules you will encounter:
Rules vary significantly between firms. Compare trading rules across all firms
Compare 50+ prop trading firms with verified data, real reviews, and exclusive discounts. Find the perfect firm for your trading style and budget.
Proprietary trading firms have fundamentally changed how retail traders access the financial markets. Before prop firms, traders needed significant personal capital — often $25,000 or more for stock day trading, or $10,000+ for forex — to generate meaningful income from trading. Prop firms eliminated this barrier by offering traders access to accounts ranging from $5,000 to $400,000 or more, in exchange for passing an evaluation and sharing a portion of the profits.
The concept is simple: the firm provides the capital, you provide the skill. If you can consistently generate profits while managing risk within predefined parameters, you keep the majority of what you earn. If you lose money, the firm absorbs the loss — your only financial risk is the one-time evaluation fee, which typically ranges from $50 to $600 depending on the account size.
Several factors have driven the explosive growth of the prop trading industry since 2020. First, the pandemic-era surge in retail trading introduced millions of people to financial markets, many of whom discovered they had talent but lacked capital. Second, technological advances in trading platforms made it possible for firms to operate evaluation programs at scale, reducing overhead costs and allowing for competitive pricing. Third, the rise of social media trading communities created organic marketing channels that amplified awareness of prop trading as a viable career path.
Today, the prop trading industry serves hundreds of thousands of traders worldwide. The most popular firms process thousands of evaluations daily and fund hundreds of new traders each month. Total payouts across the industry run into hundreds of millions of dollars annually. For many traders, prop firms have replaced the dream of managing a personal trading account with the more accessible reality of trading firm capital.
The evaluation challenge is the gateway to funded trading. Its purpose is to verify that you can trade profitably while adhering to risk management rules. Most evaluations follow a structured format: you receive a simulated trading account with a specific balance, and you must achieve a profit target within certain constraints. The most common format is a two-step challenge where Phase 1 requires 8-10% profit and Phase 2 requires 5%, both subject to daily and maximum drawdown limits.
One-step challenges condense the process into a single phase, typically with a higher profit target of 8-10%. Instant funding programs skip the evaluation entirely, giving you a funded account immediately — but they usually come with higher fees, lower starting profit splits, or stricter ongoing rules. The choice between these formats depends on your trading style, confidence level, and budget. Two-step challenges are generally the best value for patient traders, while instant funding appeals to those who want to start earning immediately.
Getting funded is only the beginning. The real challenge is maintaining your funded account through consistent, disciplined trading. Funded accounts are subject to the same drawdown rules as the evaluation, plus additional requirements around payout consistency, minimum trading days, and strategy compliance. Many traders pass the challenge only to lose their funded account within the first few weeks due to overconfidence or abandoning the risk management that got them funded in the first place.
The most successful funded traders treat their prop account like a business. They define clear risk parameters per trade (typically 0.5-2% of account size), maintain a trading journal, and never deviate from their tested strategy. They also understand the specific nuances of their firm's rules — whether the drawdown is static or trailing, how daily limits reset, and what constitutes a rule violation versus a warning.
Not all prop firms are created equal, and the right firm for one trader may be completely wrong for another. Scalpers need firms that allow scalping with no minimum trade duration. News traders need firms that permit trading around high-impact events. Swing traders need firms that allow overnight and weekend holding. EA traders need firms that support automated strategies without restrictions on trade frequency or execution speed.
Beyond strategy compatibility, consider the firm's track record. How long have they been operating? What do community reviews say about payout reliability? Are they verified and transparent about their rules? A firm with excellent marketing but delayed payouts or hidden rule changes is far worse than a less flashy firm with a proven history of paying traders on time. Use our rankings and reviews to evaluate firms objectively before committing your money to an evaluation.