Prop firms have exploded in popularity in recent years, and it feels like more and more traders are jumping in. Despite this, not everyone has taken the leap.
For some, especially new traders, it’s because they feel like they still lack the skills or experience. Others hesitate because the fees feel like too much of a gamble, or because the rules and profit targets seem restrictive. And then there are the deeper fears like worrying about not being good enough or not having the money to risk in the first place.
The reasons can be very different from trader to trader, but they all come down to the same thing: something is holding you back.
What’s stopping you from getting a prop firm account?
I haven’t attempted yet because my trading results aren’t consistent yet. But I do have plans to join a prop firm.
If you have the skills but lack the personal funds, it really is a good option, in my opinion.
If you don’t have your own trading funds, and you don’t wanna join a prop firm, how else are you gonna trade a $50k account?
You gotta get that money from somewhere. Borrow it from the bank? Save up $5k on your own and compound trade up to $50k? Could be.
@Jadzia.Daxtrader
Edit: Without a prop firm, how else does a trader expect to get a monthly $4k payout? On your own, you’d need a large account with money you don’t have. But with a legitimate prop firm, that can happen.
I wanna do what @Xirtam001 did. He’s given me motivation with just these posts!
Once I’m consistent with my results, I look forward to joining a prop firm.
You’re not, really? But you’re not, with a prop firm, either: what they call a “$50k” account is actually a $2k or $2.5k account, because that’s the account loss-limit: if you lose that, the account’s gone. So that’s the real account size.
They’re making most of their livings out of the people who trade it as if it really were a $50k account, fail the evaluation (no surprise?) and pay again.
And many are making not only a living, but a fortune. One of the well-known ones, FTMO, has recently bought Oanda, one of the world’s biggest CFD brokers, having bought a traditional prop firm the year before and a previously Swiss-owned hedge-fund the year before that.
Huge sums of money are changing hands.
I agree, with a couple of provisos …
It’s like driving a car: almost everyone imagines their skills are “well above average” and by definition most of them are wrong
There are a lot of unethical prop firms about, and (exactly as with brokers) many people don’t do the necessary due diligence and take care to choose well, which puts the odds very heavily against them
I’m confused by the way they’ve nearly all changed their wording, and now I don‘t really understand how it all works.
They used to say that if you passed the test, they’d give you a “funded account” with a broker, but they don’t say that now? They’re just betting against you, maybe, knowing that very few people end up profitable?
There were a couple that really did that, too (“Lux” and “FTMO” - FTMO even gave people a choice of broker) but they don’t, now, and almost all the rest were lying about it anyway.
The industry collectively took some legal advice after the “My Forex Funds” fiasco (late 2023), when it learned that they could be hauled into court by regulators even if they’re not regulated. So mostly they don’t say that any more.
After you’ve “qualified,” the CFD prop firms win only when you lose, whereas the futures ones that genuinely fund people with sub-accounts on a live exchange (CME) can win only when you win.
Traders all decide for ourselves with whom we want to do business, of course, but the motivation and incentivization of each of the two groups of prop firms (CFD/futures) really isn’t at all hard to understand.
Their endless rules. It seems that they exist for only one purpose: to fail traders.
I believe that the business model of retail prop firms is to attract lots of challenge buyers. 85% fail and the prop firm is left with huge revenue. But what do they do with those who passed the challenge? Those lucky bunnies need to get paid real money. No worries. As “funded traders” they still trade simulated accounts and most of them fail before they need to get paid. Those rare geniuses who in spite of all the rules consistently don’t fail, get paid; it’s okay, the firm has millions from the challenge fees. But I am sure than even those 1 or 2 out of 1000, will eventually fail too. Again because of the rules.
Yes, I do take your point, and don’t disagree, of course.
I see that the $4k payout is from what FTMO call a $400,000 account (which is actually a $40,000 account), but this doesn’t detract at all from your well-made and well-taken point.
And I wish you much consistence now, and much success when you join one! :
I updated my New York Times article, sorry, my babypips comment according to your data which happens to be true. It’s not a MILLION miles from the truth anymore. I wonder if its meaning has changed though…
Hmmm. I guess for me, it’s really my lack of skills and knowledge about prop firms in general. Even though I see a lot of people talk about it, a lot of what people say are also kinda discouragingn so I never really did a thorough research on it.
Just wanted to jump into this conversation since I’ve been following it closely. The stats about prop firm pass rates are pretty eye-opening!
@Quel_Dommage, thanks for digging up those verified numbers—19.5% and 16% pass rates seem much more realistic than 0.1%. Do you think these percentages vary depending on the firm’s experience level requirements?
@ria_rose, I totally get your hesitation. The whole prop firm thing can seem intimidating at first. But I’ve heard that many firms now offer better support and training programs to help new traders.
@samewise, yeah, those rules can be tough, especially with month-end checks. I wonder if anyone here has found a way to work around them or if there are firms with more flexible policies?
I’m actually considering going the prop firm route myself and would love to hear more about your experiences. What tips would you give to someone just starting out?
Don’t pay to take an evaluation until you’ve “passed” it a couple of times just for yourself, on your own demo, applying all the prop firm’s rules completely rigidly and strictly, as they do.
Don’t touch anything with a trailing SL that operates intraday, trailing open equity, rather than “end of day”.
Use very small position-sizes and go slowly: many people with a real edge fail just through being in a hurry.
Use only a futures prop firm that genuinely opens funded accounts on an exchange for people who pass, not a CFD one.
Read ALL the fine print very carefully, before paying.
Don’t instinctively trust “forum reviews” or “Youtube reviews” or reviews on sites with affiliate links, and be aware that the scammy firms pay people to post favourable reviews on the web.
Don’t get confused by the account size. Be aware that a “$50,000 account” with a $2,000 trailing loss limit is actually a $2,000 account because if you lose $2000, you lose the account (so a good maximum risk per trade with it might be $20, 1% of $2,000, or $40 if you’re a real gambler).
Don’t assume that the terms and conditions of the “qualifiying test” or “evaluation” will be the same as the ones applying to the ‘real’ account you’ll trade after passing it. Check those, too. Before you pay. Some (CFD) firms make it easier to pass, but nearly impossible to withdraw profits later (because it’s really their money they’d be paying out!).
Don’t pay the full price. Join their mailing-lists and you’ll intermittenty be sent discount offers (sometimes even as much as “80% off”).
Some people think an “80% fail rate” is terrible, and means they’re “all a scam” but it might not really compare that badly with any other kind of “business start-up” success figures?
Especially when you think that some of those who fail will pass at their second or third attempt?
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I guess for me, it’s really my lack of skills and knowledge about prop firms in general. 
Even though I see a lot of people talk about it, a lot of what people say are also kinda discouragingn so I never really did a thorough research on it.