What is a Prop Trading Firm?

A proprietary trading firm provides the trader with the opportunity to trade on its behalf and to use the capital allocated to him while trading in compliance with the established trading rules and restrictions. These rules most often relate to risk management. As an example, we can consider set values for maximum daily drawdown, daily loss, max loss, profit, minimum trading days, maximum trading positions at a time, maximum lot size at a time per pair, etc.

In order to be able to trade using the funds of a proprietary trading company, a trader usually has to pass an evaluation phase that will show his competence and reliability. This can be a trial period with a small capital, taking training courses and testing, etc. If at the evaluation stage the trader has shown his knowledge and skills and has not violated the rules of the proprietary firm, he can get access to a live funded account. The profits are shared between the trader and the prop firm.

Many prop firms provide their users with a dashboard, which is a trader’s single source for access to related news, alerts, notifications, live streaming, downloadable materials, videos and announcements.

Prop trading firms are interested in finding talented and educated traders who can competently manage allocated funds and increase revenue.

In this case, traders get an opportunity to work not with their own funds, but with the allocated large capital, and get more profit over monthly period.

In order create a prop trading company you will need to take into consideration the following factors:

  • Organize company registration, consider regulatory environment;
  • Choose the reliable broker with good set of tradable instruments;
  • Provide a turnkey solution including initial evaluation account purchases, through to automated risk management and rule implementation.

Our Funded Prop Trading Panel provides full functionality for managers and traders.

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