Everything you need to know about prop trading firms
A proprietary (prop) trading firm is a company that provides capital to traders to trade financial markets. Instead of trading with your own money, you trade with the firm's capital and share the profits based on an agreed split — see our prop firm rules guide for how payout splits typically work (usually 70-90% in the trader's favor). To get access to that capital, traders must first pass an evaluation (or challenge) — many firms offer discounts on challenge fees, which you can find on our Offers page.
Most prop firms require traders to pass an evaluation (or challenge) before receiving funding. During the evaluation, you must meet specific profit targets while following risk management rules. Evaluations typically have one or two phases and can last from a few days to several months — compare challenge types and pricing on our Challenges page.
Evaluation fees typically range from $49 to $1,080 depending on the account size. Some firms offer refundable fees (returned on first payout) while others have monthly subscription models. Check our current discount offers before purchasing a challenge, and always confirm whether there are additional fees for withdrawals or account maintenance.
Balance-based drawdown only considers closed trades, while equity-based drawdown includes both open and closed positions. Balance-based is generally more trader-friendly as it gives you more flexibility with open positions. Drawdown rules vary firm to firm — see our Prop Firm Rules page for a side-by-side breakdown.
Payout frequency varies by firm, ranging from weekly to monthly. The fastest firms process payouts within 24-48 hours, while others may take 7-14 days. Compare payout speed and terms across firms on our Payouts page before committing to an evaluation.
Rules vary by firm. Some firms prohibit trading during major news releases, while others allow it. Always check the firm's trading rules regarding news trading, holding trades overnight, and weekend positions on our Prop Firm Rules page.
If you fail an evaluation, you typically need to purchase a new challenge to try again. Some firms offer resets or retries at a discounted price. A few firms allow unlimited retakes with a subscription model.
Regulation varies by firm and jurisdiction. Most prop firms operate under business licenses rather than financial services regulation. Research each firm's legal structure and reputation — our Reviews page and Awards page are good starting points to see how firms are trusted by other traders.
We list the journaling, charting, order flow, and trade-copying software we personally use and recommend on our Trading Tools page.