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What are prop firms?

Proprietary trading firms, often referred to as "prop firms," are large players in the financial world. These firms are not your typical Wall Street institutions, nor are they your everyday retail traders. So, what exactly are they?

At their core, prop firms are financial organizations that invest their own capital in various financial instruments, from stocks to currencies to commodities. What makes them unique is they provide opportunities to retail traders trade without using their own capital.

The Thrill of Independence

One of the most alluring aspects of prop trading firms is their independence. Traders in these firms often have the freedom to make decisions without external client pressures. They're empowered to navigate the markets as they see fit, which can be both exhilarating and daunting.

Profit Sharing

Proprietary trading firms often operate on a profit-sharing model. Traders earn a percentage of the profits they generate. This aligns the interests of the firm and the trader, as both benefit from profitable trades.

Risk Management

Risk is an inherent part of trading, and prop firms are no strangers to it. However, these firms often have robust risk management systems in place to protect their capital. They emphasize discipline and risk control to minimize losses and maximize gains.

Joining a Prop Firm

If you're intrigued by the world of prop trading firms and want to join their ranks, it's essential to do your homework. These firms are careful with who they choose to trade with their capital, since they take on all the monetary risk.

Modern day prop firms, which have become more popular over the last few years, require you to pay to prove to them that you are a profitable trader. Most firms offer a 2-step trading evaluation with the first step requiring you to make 8%-10% profit with the simulated capital they give you, followed by the second step which requires about half of the profit. Most firms have adapted and do not have a time limit, but be aware that they do tend to have inactivity rules.

After passing, these firms often provide you a funded account to trade with their money, but be careful, as some firms may provide simulated money even after passing their evaluations.


Proprietary trading firms offer a unique path for individuals seeking financial independence through trading. They provide the capital needed to navigate the complex world of finance. While the journey may be challenging, the potential rewards make it an enticing option for those with the ambition to succeed.

In the end, prop trading firms are not just about making money; they're about empowering traders to realize their financial aspirations and turn their trading dreams into a tangible reality.

So, are you ready to take the plunge into the world of prop trading? The adventure awaits.

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