We will cover the essentials traders must consider before evaluating Forex proprietary firms, (or ‘prop firms’ as they are typically known) to solve one of the biggest problems in Forex trading – having a big enough cash deposit to run a long-term successful strategy that makes consistent returns in the market.
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DNA Funded
In SummaryI rank DNA Funded among the best Forex prop firms for its low evaluation fees. Traders pay $49 to $1,209 for portfolios between $5,000 and $200,000. Traders can choose among 16 challenges and one-phase, two-phase, and 10-day rapid evaluations. DNA Funded offers add-ons to increase the profit share up to 90% and decrease the payout frequency to seven days.
Prop traders will trade via the TradeLocker platform. The maximum daily drawdown is 5% for the one-step evaluation, 6% for the two-step alternative, and 4% for the 10-day challenge, with a maximum drawdown of 6%, 10%, and 5%, respectively.
Pros & Cons
- Maximum profit share of 90%
- Max allocation of funded accounts up to $600K
- Transparent trading conditions with TradeLocker login details
- A well-balanced asset selection of 800+ assets
- Limited operational history
Eightcap Challenges
In SummaryDay traders get a unique offer: a 1-hour, 2-hour, 4-hour, and 8-hour challenge, a trading stake selection between $5 and $500, and payout ratios of 2, 5, and 10 times. The selection determines the drawdown and profit target, while all accounts start with a $10,000 balance. Traders can use MT4/MT5 and TradeLocker. This places Eightcap Challenges among the best prop firms. Qualifying traders can request payouts in Bitcoin, USDT (TRC20), or USDT (ERC20). KYC requirements are mandatory for withdrawals exceeding $1,000, in line with industry standards.
Eightcap Challenges also offers traditional one- and two-phase evaluations with five account sizes ranging from $5,000 to $200,000, with up to $600,000 in allocated capital per trader. The maximum leverage is 1:100, with a 80% profit share. The one-time evaluation fees range between $99 and $1,299. The profit target is 10% except for the second phase of the two-phase evaluation, where it decreases to 8%.
Pros & Cons
- No time limits on One-Phase and Two-Phase challenges
- Traders can complete challenges within hours and earn payouts on the same day.
- Day Trader Challenges offers a completely customizable trading experience – traders choose their own duration, stake and payout.
- Operated by the multi-regulated Eightcap Group
- Scalping is restricted; trades must be open for 60 seconds
Hola Prime
In Summary The best prop firm for ultra-fast withdrawalsHola Prime is a transparent retail prop trading firm with four trading platforms and a maximum profit share of up to 95%. Traders can choose a one-step or a two-step evaluation for portfolios between $5,000 and $300,000, with an evaluation fee between $48 and $1,499. Alternatively, the Direct account is without evaluation and a one-time cost between $129 and $2,249. Therefore, I rank Hola Prime among the best prop firms.
Traders must trade for at least two days per challenge. The maximum daily drawdown is between 3% and 5%, with a maximum drawdown between 5% and 8%.
Pros & Cons
- A maximum profit share of 95%
- Four trading platforms
- Scalable accounts up to $4M
- One hour payouts
- Reletively newer firm (around one year old)
Funded Fast
In SummaryFundedFast offers six trading challenge accounts, ranging from $5,000 to $400,000. A five-level scaling plan increases the balance of successful traders by 25% each level, with profit target requirements, minimum trading day requirements to promote steady progress, and tighter drawdown limits to enhance professional trading discipline. Traders can choose between one-phase and two-phase challenges. The profit share is 80%, but an add-on increases it to 90%. This puts FundedFast among the best prop firms.
The minimum evaluation fee is $49 for the two-phase $5,000 account, with a maximum of $2,999 for the one-phase $400,000 account. The profit target is 10%, except for the second phase of the two-phase challenge, where it is 5%. The maximum daily loss limit is 5% with a maximum drawdown of 10%. Traders get a maximum leverage of 1:100 for two-phase challenges and 1:50 for one-phase challenges, while an add-on can increase it to 1:200.
Pros & Cons
- Profit share 90%
- Free retry if rules are followed
- Low evaluation fees starting at $49
- Single-phase evaluation with no time limits
- Rewards are not always clear
Axi Select
In SummaryAxi launched its Axi Select in-house prop trading service, which sets itself apart from the industry by not requiring a fee-based evaluation, making it 100% free. Interested traders must open a live Axi trading account, fund it with at least $500, and start trading. The personalized Edge Score determines eligibility for a funded account, and Axi has a six-stage program that scales with the trader. For the initial stage, the $500 deposit grants access to a $5,000 account, and the profit share is 0%. It lasts for at least 30 trading days, has a 7% profit target, and requires 20 trades.
The second stage requires a minimum equity balance of $1,000, caps funding at $20,000, and increases the profit share to 40%. The maximum leverage is 1:100 with a maximum drawdown of 10%. The Axi Select structure is created highly professionally, making Axi one of the best prop firms.
Pros & Cons
- Unrestrictive Rules: There are no time limits to qualify; EAs are permitted.
- Scale up to $1 Million
- Backed by a Broker: Run by Axi (founded 2007)
- No Registration Fees: A unique model where you do not pay for an evaluation; the entry cost is zero.
- Regional Restrictions: Program is not available to the US, UK, EU, or Australia.
Funded Trading Plus
In SummaryFundedTrading Plus offers non-US traders four trading platforms, including MT5 and cTrader, to ensure full algorithmic trading support, as it permits EAs during the evaluation and simulated live-phase trading. Prospective traders can choose from 24 funded account options, which include one-phase, two-phase, and no-phase evaluations. The minimum fee is $119 for a one-phase trading account, and the maximum fee is $4,500 for a no-evaluation, $100,000 trading account. Successful traders can scale their accounts up to $2.5M.
The starting profit split is 80%, but after traders generate 20% of profits from their starting balance, it increases to 90%. Prop traders qualify for a 100% profit split after recording 30% of profits. So, I rank FundedTrading Plus among the best prop firms. The daily loss limit is 4%, 5% or 6%, while the total drawdown is between 6% and 10%. The profit target is usually 10%. An affiliate program also exists.
Pros & Cons
- Clear and aggressive scaling plan up to $5M+
- Generous profit share up to 100%
- No time limits on challenges
- Multiple funding models to suit different traders
- Drawdown rules can be a bit complex
Rebels Funding
In Summary The best prop firm for fast withdrawalsI rank Rebels Funding among the best prop firms, as it offers the most evaluation choices. They include a four-step evaluation with a low 5% profit target. Rebels Funding has no time limits on achieving profit targets, but it has a minimum trade requirement. Traders can also enroll in competitions and win funded accounts with a cash prize. Another unique feature is that Rebels Funding has a refund fee of up to 200%.
The daily drawdown ranges from 0% to 5%, with a maximum drawdown between 6% and 10%. Traders receive a profit split of up to 90%.
Pros & Cons
- No time limit on evaluations
- High profit share
- Wide range of program options
- Some platform lag issues reported
What are Prop Firms?
Forex prop firms offer to ‘fund’ traders with cash allocations for trading on margin accounts and operate on a profit-share basis, sometimes up to a 90% share for the traders. One of the reasons many active traders fail is a lack of trading capital. It causes overtrading, frustration, and profit-chasing, which generally results in trading losses, as evident by the high failure rate among retail traders.
Trading with and for a Forex prop firm solves the capital problem, as traders get allocations anywhere between $10,000 to $2,000,000 in funded trading accounts. They must pass an ‘evaluation period’ and often pay monthly maintenance fees for access to capital. Traders must also consider the added stress and performance pressure this setup may cause.
How Do Forex Prop Firms Work?
Forex prop firms provide margin capital and trading infrastructure to their traders, usually they have a strict risk management team to protect their bottom line. They operate on a profit-share basis, which ranges between 50% and 90%. Most Forex prop firms scale up available capital once traders reach pre-agreed performance goals. For example, they may double the allocated funds each time a trader exceeds 10% in profits.
Are Forex Prop Firm Legal?
Forex prop firms are generally legal. There are no rules governing how to open a Forex prop firm, nor against it. Forex prop firms are unregulated since they do not provide financial services or asset management for third-party clients. They trade their capital for their own benefit and can hire as many traders as they wish, and there are no licenses to operate a Forex prop firm or to become a Forex prop trader. Some regulators question the current framework and may introduce some form of regulatory approval in the future to register a Forex prop firm, but currently, none exists.
How to Choose a Forex Prop Trading Program
Traders should consider the reputation of the Forex prop firm they are considering working with, evaluate their conditions and fees, ensure the risk management parameters suit their trading strategy, and maintain the freedom to withdraw their profits without restrictions.
How Do I Become a Prop Trader?
Several ways exist to start a career as a Forex prop trader, but the below guide covers the most common steps to get started with a Forex prop firm.
Here are the few required steps to become a Forex prop trader, which can vary slightly from firm to firm:
- Apply to a Forex prop firm, which often includes details about the individuals trading background and experience.
- A potential interview may follow, but it is not always necessary, especially if traders have the relevant know-how and where there is an outline of their strategy and preferred markets to be traded.
- An evaluation period, usually using demo accounts, where the Forex prop firm offers strict guidelines and performance goals the trader must meet to advance.
- Once traders pass the evaluation period, they can become funded prop traders, can select their account package, and often pay a fee for access to capital or trading infrastructure and general support, trade signal etc.
How Do Prop Traders Make Money?
Forex prop firms engage in a profit-share agreement, usually between 50% and 90%, with their prop traders and often attach minimum profit requirements that must be achieved before a trader can withdraw profits made using the allocated capital.
Prop Firm Trading Fees
Most Forex prop firms charge a monthly fee for access to capital, which can range between $100 and $500, depending on how much capital a prop trader seeks from the firm. Some ask for a one-time fee during the evaluation period. Prop traders must also inquire about the trading conditions, fees, spreads etc. These are costs charged by brokers and some have a volume-based rebate program, which can be useful if the trader’s strategy involves making many trades.
What are the Risks Involved with Proprietary Firms?
Stress and performance pressure are the primary risks prop traders face. The absence of a basic income and no job security can result in avoidable trading mistakes. Most aspiring traders cannot handle the pressure to outperform markets in any condition with sustainable results, experiencing burnout while having to pay monthly fees to remain with the Forex prop firm.
Pros & Cons of Prop Trading
Traders interested in Forex prop trading should consider the pros and cons before registering with any Forex prop firm.
The pros of Forex prop trading are:
- Lower overall trading fees due to the volume Forex prop firms typically trade monthly.
- Significant amount of trading capital available
- Low entry requirements with high earnings potential
- An exciting career and access to a professional community with like-minded traders
- A competitive landscape
- A risk management team that acts as a layer of security
The cons of Forex prop trading are:
- Extreme-stress environment to continuously perform in any market condition and potentially lose capital provided by the firm.
- No job security, as any Forex prop firm will cut underperforming or losing portfolios.
- One-time, monthly, or annual fees for access to capital, trading platforms, and cutting-edge trading tools
- Capital investment from the trader, which some Forex prop firms require, as a buffer to potential trading losses
- Ultra-competitive and performance-driven environment, which some traders cannot handle.
- Strict daily loss limits and overall drawdown conditions
- No basic income guarantee.
Bottom Line
A Forex prop firm will offer the right trader an excellent opportunity unavailable elsewhere. Most traders either lack the strategy or the mindset to perform in an ultra-competitive, performance-driven environment, and the possibility of stress and burnout is high for many whom don’t have the right mental approach. However, the rewards are potentially high, and access to capital is very tempting to the underfunded trader.
