Why should I use a prop firm (trader funding firm) and why are they so popular?

If you are like most traders, and would like the opportunity to trade with more capital, then trader funding firms are a great resource. This by itself makes them popular by demand, but there are many other great benefits that they provide to traders.

I don’t live in the United States, can I still sign up for trader funding firms?

Yes, many traders from around the world are currently trading for these firms. Check with the website of the specific funding company you’re interested in signing up for to ensure that your country is accepted. You may also contact them via their support link on their website.

Is there a lengthy process to get started?

Not at all. The funding companies I have personally traded with have all set up my accounts within minutes of signing up. And the sign up process is also very quick. In most cases, you can literally be trading within minutes after joining.

What are the advantages of trader funding firms?

Ability to trade more capital, trade someone else’s capital instead of your own, and you can have multiple accounts within one firm. Each firm has a set limit on how many accounts you may have. It’s always a good idea to take your time and do some research of your own. Many prop firms have a 90/10 split, with the majority going to the trader.

What are the disadvantages of trader funding firms?

The rules on some of the firms may not fit your particular trading style. Some firms also require you to trade a certain amount of days per month. In short, you have to do your research and read each specific trader funding firms rules and regulations to ensure its a good fit for you.

Would I become an employee of the firm if I sign up with them?

No, from my personal experience, all of the trader funding firms have identified me as an independent contractor once I get funded. Prior to getting funded, you will simply trade a simulated account.

What trading platforms can I use?

The most popular platform I’ve seen people use is Ninja Trader. Some funding companies have other options that they allow you to use. And almost all of them, if not all, use Rhithmic (and others) to execute the trades. Many of them have now integrated Tradingview and Tradovate as part of their trading platforms.

What is the difference between an evaluation account and a funded account?

The evaluation account is essentially a demo account. It’s your chance to prove that you can adhere to the rules, not hit your max loss limit for the account, and reach your profit target. Once you pass the evaluation, they will offer you a funded account. In this account, the money you make will be paid out to you. But again, there are rules and withdrawal limits on the funded accounts as well, so please ensure that you are doing your research for any and all trader funding firms.

Does each funding firm have a different set of rules to get funded?

Yes, while most of the rules are similar, some firms have stricter or different rules than others. I.e., some firms will not allow you to trade during economic news, others require you trade at least 5 or more before you can get funded, while others may have no minimum days to get funded. I can’t emphasize enough how important it is that you read all of the rules to ensure that your trading strategy is not affected by a specific prop firm. And if it is, well, you have plenty of other prop firms to choose from, with less rules.

Do the rules change after getting a funded account?

Yes and no, it all depends on the firm. Some may let you hold your trades after the market close during the evaluation phase only, and prevent you from holding any trades after the market close while trading a funded account. And the same goes for other rules. The big one I see a lot is the economic news rule. Some firms only allow it during the evaluation account, but not the funded account.

Can I use an LLC or business entity to trade with them?

Yes, many of the firms allow you to use a business entity. But always check with them first to make sure, because not all firms allow it.

Can I sign up for multiple trader funding firms and trade from different firms at the same time?

Yes, you can sign up to as many firms as you’d like. And you can trade them all at the same time as well.

What happens if I fail the evaluation?

You are able to sign up for another evaluation account and try again. You wouldn’t be alone in this camp, thousands of traders have failed and many more thousands will fail in the future. But its like anything in life, if you want it bad enough, you’ll learn from your mistakes and try again. And if in the end you find out its not for you, then thats okay too. Day trading is not for everyone.

How many accounts am I allowed to have for each trader funding firm?

They are all different, check with the funding company site to verify. The maximum amount of accounts I’ve seen for any one firm is 20 accounts.

What happens if I pass the evaluation and then blow up the funded account, i.e, what happens if I lose all my money?

You have to start all over, assuming you want to try again. You would have to pass the evaluation phase again, and after you pass, then you will receive a funding offer again. However, a small portion of prop firms will allow you to reset the funded account, but the cost is much higher than a regular reset. Check with the prop firms to ensure whether or not they have this option.

How often can I withdrawal my earnings?

Depends on the funding company. Some firms only allow one withdrawal per month (usually at the end of the month), some allow twice per month, and some prop firms allow weekly or daily withdrawals.

Is there a minimum or maximum amount of money that I’m allowed to withdrawal?

Yes, usually the first 3 or 4 payouts have minimum and maximum limits. After that, those limits are usually removed and you are able to withdrawal any amount. But you have to verify this information with the funding company.

If I pass one evaluation, does that mean I can have multiple funded accounts?

No, each evaluation account that you pass will equal one funded account. So if you want 10 funded accounts, you have to pass 10 evaluation accounts.

If I pass one evaluation, do I have to pay a fee for the performance account?

In most prop firms, yes, you will pay a one-time fee, or they may provide an option for a life-time fee. Nowadays, most prop firms offer a generous one-time fee and you don’t have to pay any more fees for the life of the account. It’s important that you verify this with each prop firm.

Do I have to pay commissions in the evaluation or funded accounts?

In most cases you will have to pay a commissions for every execution at most prop firms, with very few exceptions . This is always deducted from the actual trade itself. I.e., if you made $100 on the trade and the commissions were $2, then your account will profit $98. The opposite will happen if you lose $100 on a trade with commissions at $2, your account will lose $102 on that trade.