6 Best Prop Trading Firms in 2024: Reviewed and Compared (2024)

For most of Wall Street’s history, proprietary trading was the realm of Ivy Leaguers on the trading desks of the big banks. But the big banks blew it in a big way, causing the 2008 financial crisis and their prop trading desks were regulated out of existence.

Now, a new type of prop trading firm has emerged and they’re willing to fund anyone who can demonstrate that they know how to make money in the market. This is an incredible opportunity for skilled traders.

Recently, some big forex prop firms have collapsed, so I’m changing my rankings and strongly urging you to use only the safest, most trustworthy prop trading firms until further notice. For American traders, that means only trading with futures prop firms until the forex prop firm mess gets sorted out.

Review Summary

Find the best prop trading firm with my comparison chart that provides prices, current discounts, trading rules and the most important account information. These are my three most trusted prop firms.

Topstep has always had a stellar reputation, phenomenal trader support, and very generous payouts. Topstep is hands down the best prop firm for trading futures, and thanks to a current promotion Topstep is only $29/month for a limited time. That makes Topstep hands down the best bargain in the business.

They’re recent announcement of a one-step evaluation and only one trading rule makes them even more attractive, AND they now offer up to five express funded accounts per trader.

Pros

During their 10 years in the prop trading business, Topstep has become a trader favorite for a number of good reasons. They fund thousands of traders and pay out millions of dollars in trading profits every year.

The principal reason for their popularity, I suspect, is that they are very generous with their profit payouts. Very generous. In fact, you keep 100% of your first $5,000-$10,000 in profits (depending on which account you choose). After you squirrel that away, they’ll still give you 90% of your profits going forward, which is the top payout percentage in the industry.

Topstep has also very recently eliminated their two-step evaluation process. The Trader Combine is now just one step. That means traders opening an account now are possibly just two days away from being funded. Topstep funded over 8,500 accounts last year alone, and by streamlining the evaluation stage, they will fund far more this year. Latest figures had them funding 5,000 traders in August alone.

Traders also benefit from the fact that Topstep gives you unlimited time to hit your profit targets in order to pass the Trader Combine. You can take as much time as you need so long as you don’t hit your loss limit or trailing maximum drawdown. It should be noted that you will continue to pay your monthly fee so long as you’re in the Trader Combine, but once you’re confirmed as a funded trader, those monthly fees go away.

Topstep also has one of the industry’s best educational programs for futures traders. Topstep traders have access to group training sessions led by experienced traders, a digital trading coach known as “Coach T” and an incredible library of blog posts, podcasts, the new live TopstepTV and many other training materials.

As a US-based trader, I also appreciate the fact that Topstep is headquartered in Chicago, so there’s no currency conversions involved, like there is with a lot of other prop firms.

Topstep is one of the best values in the industry, particularly with the current bargain they’re offering my readers. With up to a 80% discount that you can claim by following this link and using promo code “5expressfundedaccounts”, you can start proving your trading skills in the Combine for just $29/month. I can’t recall a better deal for such a renowned prop firm. It’s an amazing opportunity you shouldn’t pass up.

Cons

Topstep’s new, one-step, one-rule evaluation has made everything a lot simpler, but there is a little confusion about the differences between the Express Funded Account and the Live Funded Account. Luckily, they have one of the best customer service departments in the industry to answer any lingering questions.

I’m a little uncertain about monthly fees rather than a one-time fee. If you complete the Trading Combine two months or less, you’ve made a tremendous deal. If it takes you four or five months to earn a funded account, the fees can add up.

Overall

Topstep is one of the premier prop trading firms in the world, with a proven track record of big payouts, outstanding trader support, and fair trading parameters. At the moment, they’re also a great bargain, so sign up now with promo code 5expressfundedaccounts to start for just $29 a month and take your first step toward a potentially lucrative prop trading career.

#2: The 5%ers – 9.2/10

The 5%ers offers quick funding, quick account scaling and great trader support.They are amongst the world’s most trusted prop firms thanks to their transparency, unique business structure and elite risk management team.

Pros

There’s a lot of reasons to love the 5%ers, but in these uncertain times for prop trading firms, the best reason may be their management team.

The 5%ers is probably the best set up of any forex prop firm to withstand any changing regulations. They have a unique business structure in that they have a private equity pool. Traders who become funded trade money from that pool, and are compensated for that trading as contractors.

At no point does the 5%ers act like a broker or market maker. This well-thought out structure makes them an ideal prop firm in times like these. We don’t know who the CFTC will target next, but we can be pretty damn sure it won’t be the 5%ers.

The 5%ers is also known for having an account that suits any type of trader. Boot-camp is a three-step evaluation program for beginners that comes at a very attractive price point, with easily obtainable 6% profit targets.

The High Stakes account offers traders up to 1:100 leverage, a generous 10% max loss with profit targets set at just 8%. It has a two-step evaluation process, but you can complete both stages in just six days if you hit your target.

Hyper-Growth is an evolution of the 5%ers old instant funding program and allows you to get real funding in just one step, which you can complete without any minimum days or trades. You can then double your capital if you hit profit targets, up to $4 million. Elite traders can even earn a 100% profit split, which is unprecedented in the industry. According to the 5%ers, the Hyper-Growth program has the “highest success rate in the industry.”

One of the reasons for the high success rates at the 5%ers is that many accounts don’t have a daily loss limit, simply a “daily pause.” If you’re having a bad day at the trading desk and hit your daily pause limit, you simply can’t trade any more that day. You don’t lose your account, and you’ll be back at the next day.

The 5%ers is also renowned for their trader assistance, trader community and customer service, which is mentioned in almost every online review you can find. In a pretty short time frame, the 5%ers have built a community of loyal traders who love them for their overall trader support.

A great example as to the links the 5%ers will go to support their traders is their partnership with Dr. Gary Dayton, a psychologist and author who specializes in trader psychology. Over seven sessions, Dr. Dayton will help you tackle perhaps the most difficult aspect of trading. Other prop firms would charge extra for such an invaluable service, but with the 5%ers, it’s free for all their traders.

The 5%ers also recently launched a Visa card, which allows them to directly deposit trader earnings on to your card.

Cons

Some traders have complained about the stop-loss requirement for every trade, but this only actually applies to Boot Camp accounts, which are designed for traders still working on their risk management. If you can’t deal with stop losses, simply open one of the other two account types.

One potential drawback to the 5%ers is that they have limited assets available for some accounts. For a long time the 5%ers were forex only. They’ve been adding assets, but right now they are still only allowing forex, metals and indices.

If you have any desire to trade other markets, you will need a separate account with a different prop firm.

Overall

The 5%ers are perfectly structured to stick around forever. Plus their scaling plan, profit splits, trader support and educational resources rank amongst the best in the industry. To start a long term trading career with one of the best, sign up with the 5%ers now – 5% off with this link.

#3 FTMO – 9.0/10

FTMO lets you trade just about any financial instrument out there, and with more than 10,000 traders worldwide, they are probably the most reputable, successful prop trading firm in the world. (UPDATE: As of January 10, 2024, FTMO is not accepting US traders, at least for the time being.)

Pros

FTMO has a great reputation for good reason. You won’t find a single complaint about them not paying out on time or making accounting mistakes. You will get every cent that you earn. With some of the bottom feeders in this industry, that is not always the case.

Profit splitting starts at 80% but operates on a sliding scale, meaning that the truly elite traders keep up to 90% of the profits, which is second highest in the industry behind the 5%ers.

They also offer great scaling opportunities. After passing the two-stage evaluation process, which includes the famous FTMO Challenge, traders can have access to up to $400,000. If you generate a 10% net profit or higher over a certain time period, FTMO will incrementally raise your funding to a maximum of $2 million. FTMO knows that it takes money to make money and they fund their traders accordingly.

FTMO also allows its traders access to almost every financial market you can think of. If you’ve mastered a particular market, they’ll let you trade it, from forex to futures to metals to equities. Many prop trading firms are only focused on very particular markets, but FTMO gives you the freedom to trade what you want.

They also have one of the most professional trading platforms in the industry and excellent educational resources, mostly due to their investment in new trade tracking technology. FTMO traders are given access to a series of apps that track your trading tendencies and offer real-time feedback.

One of the things that best exemplifies FTMO’s commitment to helping their traders is that they employ trained psychologists. The psychological aspects of trading are well known, and yet FTMO is one of the few prop firms that actually offers support in this critical area.

Evaluation parameters are pretty standard, although they’ve made a recent concession to make things easier. Max losses are $1,000 on a $10,000 account and your profit targets are 10% over 10 trading days in Step 1, but they’ve cut the Step 2 target to 5%, which obviously takes a lot of the pressure off.

Of all the reputable prop firms, FTMO comes in as one of the most affordable. Current prices start at just €155 for a $10,000 funded account. This is very cheap, and this one-time fee is fully refunded should you pass the two-step evaluation process.

Cons

In January, 2024, FTMO announced that they were — at least temporarily — not accepting new US traders. They were pretty vague as to why, citing only “specific conditions in the market segment there.” Speculation has run rampant, but my best guess is that they are awaiting the outcome of the case brought against My Forex Funds by the CFTC.

Some traders are turned off by the fact that FTMO doesn’t actually let you trade real money, even if you earn a funded account. Personally, this doesn’t make such a big difference to me. I’m still getting paid out on my virtual trades as if they were real, so what of it? I don’t really care if FTMO is making money off my strategy or not, so long as I am.

Using “dummy” accounts does, however, bring up the question of how dedicated FTMO is to helping their traders. If they don’t actually profit when their traders profit, what’s their incentive to guide you along?I’d argue, however, that the massive investment FTMO has made to develop their training programs and trade tracking apps proves their dedication to helping traders succeed.

Overall

FTMO is one of the most popular, transparent, and supportive proprietary trading firms you’re going to find and their profit splits are second to none. With a current 15% discount it’s a great time to start trading with FTMO and join the thousands of traders who have made real money with one of the most trustworthy firms in the world.

Interlude: Note on prop firms #4-#7

Hi, It’s me Michael. Honestly, you don’t have to read beyond my top three firms at this point. Why? Things are so crazy in the prop firm world right now that I am urging everyone to stick to the best of the best. That’s what I have been doing.

Yes, you might save a few dollars by selecting one of the prop firms below or some new firm that just opened, but to me, the risk of these firms closing is just too large to ignore. And if you don’t follow my advice, I’m not going to respond to your emails complaining about some discount firm that closed your account for no reason. That’s on you. Stick with the tried and true, at least for the time being.

Case in point: True Forex Funds just shut down permanently, and they were one of the biggest names in forex prop firms. If it can happen to them, it can happen to anyone. Many other firms are also struggling to keep up with payouts, and I am certain that more will cease operations.

Why is this happening now? It all started this summer with the regulatory uncertainty that came out of the CFTC vs My Forex Funds case. That started a chain reaction that slowly took out a bunch of firms. I’ll explain it all in a new post soon.

The long and short of it is that anyone other than FTMO, the 5%ers and Topstep are a risk at the moment. So take your chances if you will, but I’m sticking to only the safest props until the dust settles. Stay safe out there!

#4 Lux Trading- 8.7/10

Lux Trading is an old-school prop trading firm. They are looking for dedicated, experienced traders and reward the best of them with a substantial amount of capital, and I mean substantial. If you prove yourself to be a consistent, profitable trader, you can scale your account all the way up to $10 million with Lux Trading. That’s the big leagues, for sure.

Of course they don’t just hand out $10 million to anyone—Lux takes a good long look at its traders before funding them, which is one of the reasons why I don’t rank Lux higher. In order to become a funded trader, you have to actively trade for a total of 49 days. That’s a much longer evaluation period than most of the other firms on my list.

On the flipside, they give you as long as you need to hit your profit targets, so you’re not forced into panic trades by an impending deadline.

Another reason Lux is near the bottom is that they only pay out 75%. That’s 5-15% less than you’ll find anywhere else. However, Lux pays a lot more individual attention to its traders and offers a lot of guidance, especially in the area of risk management. That alone may be worth the extra 5-15%.

Lux also has pretty tight trading parameters, but that should come as no surprise. The bottom line is this: Lux wants professional traders with a long-term, risk-averse perspective who know what they are doing and are willing to put in their dues.

That might not seem like such an attractive prop firm action, I think Lux was built to last. While other prop firms ran themselves into the ground competing for the lowest prices and the highest payouts, Lux stayed true to themselves. In these complicated times for prop firms, that could be a true advantage.

If you’re the type of consistent trader Lux is seeking, you can sign up with Lux here—you just might be on your way to managing $10 million.

#5: Funding Pips- 8.3/10

Like so many in the prop industry, it was rough going for Funding Pips in early 2024, but they seemed to have bounced back better than most. I’m not fully recommending them yet, but I like some of what they’re doing, and I’m hoping they’ll rise up the ranks.

It is worthwhile to note that Funding Pips is one of the few firms on my list that are currently offering their services to US traders. That’s a good thing if you’re in the US of course, but I do think it puts them in additional legal jeopardy.

Like a lot of prop firms, Funding Pips was forced to pause operations when MetaQuotes pulled the rug out from underneath their trading platform. Funding Pips migrated all accounts over to Match Trader and cTrader, and in my experience has operating pretty smoothly as of late.

To their credit, Funding Pips is not at all scared to innovate. A great case in point is their scaling plan, which has a lot of unique features. Once you become funded, you begin as a Novice trader, and can work your way up by hitting a 10% profit target and earning four payouts.

Once you get the “promotion” you not only get 20% more capital, but you also get a 1% bump up in your max drawdown. In total there are four levels of funded trader, the best of which is the “Hot Seat.” Make it to this level, and Funding Pips will double your capital, bump you up to a 13% maximum drawdown, 90% payouts, and increase your daily lot limit, plus you get on demand payouts, a monthly bonus and other perks.

I haven’t found a better scaling plan in the forex prop firms that I cover. It also provides proof that Funding Pips isn’t a generic prop firm just mimicking everyone else.

There’s a lot more to like too. Just the other day Funding Pips announced a new payout plan in which they offer payouts every Tuesday. Yes, once a week payouts. They also offer three different account types — 1-step, 2-step, and 3-step evaluations. The 2-step challenge offers the loosest trading parameters and the highest leverage.

I also like the fact that Funding Pips is very straightforward with their rules, in general, although they’re a little inconsistent when it comes to trading news. For evaluation accounts you’re allowed to hold trades during news, but once you become funded, any profit you make during the two minutes before and after a news release will not be counted.

In my experience trading news is overall a bit of a fool’s errand anyway, and I understand that Funding Pips is just exercising sound risk management here, but the inconsistently does bother me a bit.

All told, I’d be much higher on Funding Pips than I am, but it is difficult for me to get excited about any prop firms beyond my top three at the moment. There is just so much uncertainty in the industry right now.

After everything shakes out from the MFF vs CFTC case, we should have a lot more clarity on where the industry stands. At that point, I’ll look more to the fresh, innovative faces in the industry, and Funding Pips is one of the first places I’ll look.

If you’re not quite as cautious as I am and would like to sign up with one of the more pioneering prop firms in the world, sign up with Funding Pips.

#6 MyFundedFX – 8.1/10

MyFundedFX has enjoyed a meteoric rise over the past year, despite the incredible challenges that have faced the forex prop firm industry. I’m always skeptical of the hottest new prop firm, but so far MyFundedFX seems legit.

They have more than 90,000 active users, hailing from more than 190 countries, according to their website. That’s pretty impressive, especially because there’s only 195 countries recognized by the UN. Do they have traders in Liechtenstein? The Vatican? (Like I said, I tend to be skeptical.)

Bravado aside, here’s what I actually like about MyFundedFX. For starters, they offer a wide arrange of programs. Regardless of your budget or trading skillset, you should find an account that works for you. For true beginners, a very affordable three-step evaluation, offers a great way to get your feet wet. Add in some decent promos, and they’re a real bargain.

As someone with more experience, I prefer their one-step evaluation program. A $50K account still comes in at just $300, and you earn 10% of your profits during the verification stage. I’m not a huge fan of the tight 6% maximum loss limit, but with a one-stage account, you have to expect tighter parameters. Once you’re funded, the profit split is a generous 80%. You do have to wait 14 days after getting funded in order to process a payout, which, believe me, can feel like an eternity.

I also like the simple, trader-friendly rules at MyFundedFX, but of course they’re not perfect. There’s no real maximum or minimum trading days; but there is that 14-day rule for payouts, which I don’t love. They also claim there’s no trading style restrictions, but be aware that they don’t allow copy trading. As of last week (April 8), I was also informed they they no longer allow news trading.

The profit targets at MyFundedFX are fairly obtainable. For three-step evaluation programs, you only need to hit 6%, which as low as you’ll find. If you’re a steady trader and can hit your marks consistently, just hit 6% three times, and you’ll be funded. Two-step evaluations have an 8% target for the first phase, which drops to just 5% for stage 2.

The MyFundedFX scaling plan is another attractive feature. If you hit your targets, they’ll scale your account size by 25% every three months. Again, this is tailor made for steady traders.

MyFundedFX’s also offers a great tradable asset mix, including all the major forex pairs, of course, plus indices, commodities, and crypto.

It is always tough to determine what prop firms have traders’ best interest in mind, but one indicator that a firm is actually on your side is how much they invest in educational materials. MyFundedFX goes all out in this regard with more than 750 youtube videos that range from informational to inspirational.

Like most US-based prop firms, MyFundedFX got hit hard when MT4 and MT5 would no longer work with their brokers. MyFundedFX migrated accounts to Blueberry Markets, than had to migrate those accounts to yet another broker when Bluberry Markets also quit the prop game. They went with DXTrade, but I could have told you that was not a good long term solution — too many bugs. Finally they seem to have found a home with cTrader for non-US clients and MatchTrader for others. We’ll see how that goes.

Since they are based in the US, I am worried that MyFundedFX will have to answer to the CFTC. At some point the CFTC has to offer some indication as to what is and isn’t allowed for prop firms. Until they do so, there’s always a risk that they will intervene like they did with My Forex Funds.

As long as their day of reckoning is later rather than sooner, MyFundedFX is agood forex firm for starting your trading career.

#7: The Funded Trader – 7/10 – not recommended

The Funded Trader had a moment were they seemed destined to become one of the truly great prop firms due to their verified payouts, obtainable profit targets, generous drawdown limits, high leverage, and great prices.

I personally once ranked them as high as #4 on my list. Everything changed with the My Forex Funds shutdown, however. I wasn’t the only one to notice that The Funded Trader was operating with a very similar business model to MFF. Traders got spooked and started looking for non-US based alternatives that were at less risk of regulatory interference.

At the same time, the Funded Trader was also facing increased competition from a number of new prop firms. Their response was to offer deep discounts while making their trading parameters even more trader friendly. Sounds great, right? It was, but it couldn’t last.

Add to that the fact that so many brokers turned their backs on prop firms, and it was more than the Funded Trader could bear.

The Funded Trader abruptly shut down in April 2024 and is currently undergoing a confusing restructuring as they set up shop in the Cayman Islands. I can’t recommend them at this time, but we will see how things look when the dust settles. UPDATE: TFT has reopened, but I still don’t like what I see.

What made the Funded Trader so popular in the first place? For me, and everyone else, it started with the price points, which were amongst the best in the industry.

For such a great price, you’d expect some concessions in other areas, but the Funded Trader matched up with FTMO and other industry leaders in terms of payout percentage (80%–90%), scaling opportunities (up to $1.5 million), and profit targets (10% for the first stage, 5% for the second).

Trading parameters were always in line with the rest of the industry if not better. And while forex was the focus of most Funded Trader clients, you can also trade crypto, indices, and some commodities, depending on your trading platform.

In addition to all the above advantages, I also loved Funded Trader’s lax rules regarding trading style. Basically, everything was ok unless you tried to take advantage of the demo environment. For instance, if you profit off of a demo server error, your account will be forfeited. You could even hold trades overnight or over weekends, unless you were trading shares. Trade copiers were permitted so long as the Funded Trader was the master account.

When the Funded Trader started to get in trouble before they shut down, however, these lax rules were suddenly a lot more opaque. Many accounts were breached for unspecified reasons. Discord servers and Facebook groups were abuzz with upset traders, which obviously caused a serious hit to their reputation.

As far as the CFTC goes, it seemed pretty clear to me that they would eventually move against the Funded Trader based on the similarities between them and MFF. When I read the complaint against My Forex Funds, it seemed like the same document could have been filed against the Funded Trader. I’m not sure if their move to the Caymans absolves them of any past objectionable behavior in the eyes of the CFTC or not. We’ll see.

I don’t like to take personal shots, but I also don’t trust CEO Angelo Ciaramello. He’s been a larger than life presence in the prop trading community for a while now, for better or worse. He’s remarkably transparent about some things, but I lost a lot of faith in him with the demise of Leveled Up Society. Ciaramello and his partners let their differences shutter the business for months on end as Ciarmello left the business all together. A lot of traders were caught up in this power struggle and lost access to accounts.

And after insisting for months that the Funded Trader was in a good place, despite all the rumors to the contrary, he shut things down without any notice. It is not clear what, if any, role he’ll play in the newly restructured Funded Trader.

I’m keeping the Funded Trader on my list, even though I don’t recommend them, because they did do a lot of good things for the industry, especially in terms of encouraging transparency and always pushing the industry towards more trader-friendly prices and parameters. I still hold out a little hope that the good parts of the firm can be revived, although it seems like a tremendous long shot at this point.

Prop Trading FAQs

For further information, check out my introduction to prop trading article, but here’s some basic info on proprietary trading:

What is Proprietary Trading?

Proprietary trading is when a firm uses its own money to trade any sort of financial instrument in order to make a profit.

Today, proprietary trading is mainly conducted by two types of companies. Some prop trading firms, like the ones I’ve ranked above, allow anyone to trade with their capital so long as you follow the rules. You have to pay a fee, agree to trade according to the firm’s strict parameters, and (in some cases) pass a trader evaluation in order to become a funded trader.

If you sign up with this type of proprietary trading company and follow the rules, they’ll give you up to $2 million to invest. You can split any profits you make, keeping as much as 90% and you won’t be responsible for any losses. If you violate the trading terms or lose too much money, the prop firm will cancel your account.

Examples of these firms are those above, plus many others including My Forex Funds, SurgeTrader, Lux Trading, Audacity Capital, and City Traders Imperium.

The second type of proprietary trading firm is the Wall Street version. These are the prop trading companies that hire math prodigies who graduated from Yale at the age of 16. If you are lucky enough to get hired as a trader by one of these companies, you’ll get a spot on a physical trading desk, and have an actual salary, plus benefits. You’ll also get a percentage of your trading profits in the form of a bonus.

Examples of this second type of proprietary trading company are Jane Street Capital, Hudson River Trading, Optiver, 3Red Partners, Jump Trading, Virtu Financial, and many more.

Who much do prop traders make?

More than most professions, prop traders compensation is based on their performance. If you work for one of the Wall Street-style prop firms, you’ll likely make more than $100,000 in a base salary, with a potentially significant bonus based on a percentage of your trading profits.

Prop traders who use funded trader programs only make money if they profit. If you sign up with FTMO, for example, once you pass their evaluation stage, you will become a funded trader. As a funded trader, you keep up to 90% of your profits. If you don’t profit, you won’t see a dime.

Is proprietary trading legal?

Yes, it is. There is some confusion about this because of the Volcker Rule, which was passed after the 2008 financial crisis. The Volcker Rule outlawed banks from having prop trading desks. The intention was to prevent the banks from making overly risky trades with depositors money. So the ban on proprietary trading only applies to banks.

Is prop trading a scam?

No. It is perfectly legit. Depending on the market, it can be quite difficult to make money as a prop trader, but it is very possible. Good traders can pass an evaluation, invest a prop firm’s capital and split the profits. There are some prop trading firms that make it harder for their traders to succeed than others, however, so do your homework before signing up with any proprietary trading firm.

I’ve also seen an incredible influx of new prop firms over the last six months or so. Many of these are indeed scams. They take everyone’s evaluation money, but then find some false pretense to close accounts of successful traders. Stick with my top 3 prop firms!

Do prop firms have promo codes or special offers?

Yes, prop firms offer frequent promotions! Some firms such as Topstep offer special promos to my readers (15% off!), which you can access at any time with this link. Other prop firms such as Fidelcrest and The Funded Trader offer occasional deals for a limited time, which I publish at the top of this article. I always keep my prop firm promos page up to date, so check back often.

Quick tip: In general you can find the best prop firm promos during slower trading periods such as around the holidays. Even FTMO, which almost never offers discounts, usually has great offers in December.

Methodology: How I chose the best proprietary trading firms

Choosing the right prop trading company will give you the best chance to maximize your trading profits. Choosing the wrong one could rob you of a lot of time and money. It’s not a decision to be taken lightly, so I want to be as transparent as possible about how I made my rankings.

I began with a list of prop firms that I compiled from my own experience trading, and recommendations of friends and traders in my network. There seems to be new prop firms popping up every month, but it was important to me that I only list firms with a proven track record.

Once I had compiled my list of candidates, I came up with the above rankings by analyzing each firm and awarding points according to the following seven factors:

Factor 1: Trustworthiness

When I first jumped into the prop trading scene, there weren’t that many options — it was a pretty small community, and I pretty much knew who I could trust. Then the industry exploded. I always tend to stick with what I know, but a lot of these firms were offering incredible promotions, outstanding trading parameters, and decent trade execution. Like everybody else, I started trying out some of the hot new firms.

Guess what, I’m back to my original trusted firms. Why? It turns out that these other firms were too good to be true. They undercut each other on prices and were too lax with their trading parameters. When too many traders succeeded, they couldn’t make their payouts, and eventually shut down.

The list of failed prop firms is growing by the day. I’m not going to get burned by a firm that delays or denies payouts or simply closes up shop when things get tough.

So what do I look for? I look for firms with a long track record. Firms I know personally. Firms with a long term vision. Firms that show caution. Firms that are based outside of the US (for forex prop firms). I’m not taking any chances. Neither should you.

Factor 2: Profit splits

This is pretty self-explanatory. I awarded the most points to the firms that offered the highest profit splits. Obviously this is a critical category. It is very difficult to consistently make profits as a trader, especially when you’re bound to the rules set up by your prop firm. If you are up to the challenge and turn a profit, obviously you should reap the lion share of the rewards.

I have no problem giving the prop firm their cut. They put up the cash, they assume much of the risk, so they deserve a percentage. But you’re the one doing all the work, sweating through all the tough decisions, and consistently beating the market. You deserve the highest possible profit percentage.

Factor 3: Scaling opportunities

This is another pretty simple category. Most prop firms allow successful traders to trade progressively more capital so long as they continue to meet profit targets. The best, most consistent traders may eventually be entrusted with millions of dollars of a prop firm’s capital.

You’ll see these best-case-scenario figures splashed across every prop firm’s website. “Trade up to $2 million!” This can be misleading, however, as some firms make it nearly impossible to make it to the high water mark.

So when I awarded points in this category, I looked at not only that top figure, but also at how hard the proprietary trading firms make it to get there.

Many firms also bump up their profit splits if you can meet your profit targets, so I also took that into account.

Factor 4: Trading parameters

This is a very important category that many rookie traders don’t look at closely enough when they sign up with their prop firm.

All prop firms control how much risk their traders can take on. This makes perfect sense, of course, since they are entrusting you with their capital.

Prop firms use a number of different tools to limit how much risk you take on. Some don’t allow you to keep positions open overnight or over the weekend. Some don’t allow you to trade news releases, so you are limited when unemployment figures or other key economic data is released. Most employ daily loss limits and overall loss limits or some type of draw-down limits.

If that’s not enough, some prop firms even limit what type of trading strategies you can use.

As I said, prop firms are entitled to limit how much risk you take. It is their money, after all. However, some firms take this too far. As a trader, you have to be able to assume some risk, or you’ll never make a dime.

When awarding points, I rewarded the firms that gave their traders the most freedom by enforcing the fewest restrictions.

I also looked at profit targets for this category, although most proprietary trading firms fall in the 8-10% range, so there’s not a lot of variance. Obviously the lower the profit targets, the easier it will make your life as a trader. In addition to less stress, it will be easier to pass your evaluation period or graduate to higher account levels.

Factor 5: Affordability / Value

I’m amazed at how expensive some prop trading firms are. Some of them charge so much, it makes way more sense to just start trading the money you’d have to pay as fees rather than forking it over to a firm.

I’m also not a big fan of monthly fees. Some of you may prefer that payment model, but I’d rather pay my dues upfront and not worry about it again.

I rewarded prop firms with low price points, but I also looked at what each firm offered with their funded account program. A really cheap prop trading firm that doesn’t offer great trading platforms or good customer support isn’t something I’m going to recommend. I also want to see some bang for your buck.

Factor 6: Tradable assets

I’m a firm believer in finding one niche in the markets, becoming an expert and just trading within that niche. Most of the successful traders I know have done exactly that. However, I still prefer prop trading firms that offer a lot of options when it comes to tradable assets.

Even within certain asset classes, you still need to be aware of exactly which financial instruments you are allowed to trade. For example, some forex prop firms only allow you to trade a limited number of currency pairs, which obviously limits your trading options.

I also like a prop firm that provides a lot of asset options because you never know what your trading future might bring. Your current trading strategy might not be viable in a few years. I don’t want to have to start all over with a new prop trading firm because I had to change strategies.

Factor 7: Educational Resources

If you are already an experienced trader and are simply looking for capital, you may not place too much value in a prop firm’s available educational resources. I get that. But I’d argue two things.

First, with the way financial markets are evolving so quickly these days, it is imperative even for the most seasoned traders to perpetually continue their education. Crypto is a great example. No one knew what this was just a few years ago, but the traders who figured it out early and learned the market first made fortunes. Never stop learning.

Secondly, I think there is a direct correlation between the quality of a proprietary trading firm and the quality of its education program. The best prop trading firms who want their traders to succeed make investments in the ongoing education of their traders. Those that don’t… don’t.

A really good prop firm wants the smartest, most educated traders in the world trading their capital. They will make the necessary investments to make sure that’s what they have.

Factor 8: Customer service

Not something a lot of traders think about, but this is also very important when judging a prop trading firm. Like educational resources, how much a firm invests in its customer service department is a really good indicator of how much they value you, the trader.

Also, prop trading comes with its own set of rules that are unique in the trading world. There are times when even the best traders need some help. With markets moving as fast as they do, it’s critical that you get that sound guidance as quickly as possible.

Top proprietary trading firms have invested in a knowledgeable, helpful, courteous support staff that will be there to guide you whenever you need them.

Why you should trust me

You should trust me because I live and breathe prop trading. I started my personal finance blog years ago, and started focusing on prop firms during the pandemic. That’s four years now that I’ve been heavily involved in prop firms. No one knows this industry like I do.

But here’s what’s even more important than my wealth of experience – I tell the truth about prop firms. That is so incredibly important these days as one firm after another fails. I was one of the first to sound the warning about The Funded Trader. I called that 5 months before they failed.

I’m also one of the only people still covering the My Forex Funds disaster, and what it means for the prop firm industry as a whole. I was also right about True Forex Funds.

I take no joy in prop firm failures, but I am happy to steer you away from them whenever I can. When it’s done right, prop firms can provide an incredible opportunity for skilled traders who lack funds, but we’ve seen too many prop firms taking advantage of the traders that they are supposed to be helping. Follow my advice, and I’ll do my best so that won’t happen to you.

I’m always open to any questions you may have, so drop a line in the comments or send me an email. I’m happy to help.

Conclusion

You have to be very careful when choosing a proprietary trading company. Prop firms come in all shapes and sizes and there’s a lot of them out there that don’t have traders’ best interests at heart.

I truly hope this guide helps you find the right prop trading firm for you. A good proprietary trading firm can give you the capital boost you need to make real money as a trader. That’s my goal for all of you who have decided to go the prop trading route.

If you’re trading with a firm that you love and it isn’t on my list, please let me know here. Also please reach out if you’ve had a bad experience with one of the above firms. I will update my rankings accordingly.

Trading always seems like a me vs you, zero sum game, but it’s not. By exchanging information and learning from our collective experience, we can all help each other along on our journey towards true financial freedom.

If you’re ready for the next step and want to join the prop firm that I think will give you the best chance to become a successful prop trader, sign up with Topstep today.

Further Reading

Full reviews of prop trading firms: FTMO, The 5%ers, Topstep, BluFx, Fidelcrest, and Lux Trading.