Frequently Asked Questions
Prop Firm basics
What is a Prop Firm?
A prop firm is a financial company that provides capital to traders for trading. Traders use this capital to make trades, and the profits generated are shared between the trader and the company.
What is the evaluation process of a prop firm?
The evaluation process typically includes two stages: the challenge stage and the verification stage.
Should beginners join a prop firm?
Beginners SHOULD NOT join a prop firm.
Why SHOULD beginners NOT join a prop firm?
Trading is a difficult field where 90% of participants lose money, and prop firms are even more challenging. According to statistics, less than 5% of participants make a profit.
What should beginners do to join a prop firm?
Beginners need to prepare by gaining knowledge, learning discipline, and mastering the rules of the prop firm.
How much does it cost to join a prop firm?
The cost to join a prop firm varies depending on the company and the capital you want to manage, typically ranging from $50 to nearly $2000.
How are profits shared between the trader and the prop firm?
Profits are usually shared according to a pre-agreed ratio, such as 80/20, 90/10, or even 100%.
What are the risk management requirements?
Prop firms have strict risk management rules that traders must adhere to, such as maximum daily and overall loss limits.
What are the benefits of working with a prop firm?
Working with a prop firm allows you to trade with larger capital than your financial capacity.
Which prop firms are reputable today?
Some reputable prop firms today include FTMO, The5ers, Funding Traders (FT), Funded Trading Plus (FTP), City Traders Imperium (CTI), Smart Prop Trader (SPT), E8 Funding, and FXCE.
What skills are needed to succeed in trading with a prop firm?
To succeed, you need market analysis skills, strict risk management, discipline, and patience.
What types of trading are available at prop firms?
Prop firms usually allow trading of various asset types such as forex, stocks, futures, and indices.
Evaluation and Challenge Process
What is the evaluation process?
The evaluation process involves traders going through challenge rounds with different goals.
What is the challenge process of FTMO?
FTMO has two evaluation stages: the challenge stage with a 10% profit target in round 1 and round 2 with a 5% profit target.
What are the risk management rules of FTMO?
FTMO requires traders not to exceed a maximum daily loss of 5% and an overall maximum loss of 10%.
What is FTMO's profit target?
FTMO's profit target is 10% in stage 1 and 5% in stage 2.
How many stages are there in the evaluation process of prop firms?
The evaluation process typically has two stages: challenge and verification.
Costs and Profits
How much does it cost to join FTMO?
The cost to join FTMO depends on the capital you want to manage, ranging from $155 to $1080.
How much does it cost to join The5ers?
The cost to join The5ers also depends on the capital you want to manage, ranging from $39 to $850.
Are there fee refund programs when passing the challenge at prop firms?
Some prop firms, like FTMO and The5ers, offer fee refunds if you pass the challenge while adhering to all risk management rules.
Do prop firms provide any support or training for traders?
Many prop firms offer courses, seminars, and technical support to help traders improve their trading skills.
Are there any hidden costs when joining a prop firm?
There are usually no hidden costs, but traders should read the terms and conditions carefully to understand all fees.
What is the maximum profit a trader can earn at a prop firm?
The maximum profit depends on the trader's performance and the capital provided. There is no specific limit on profits, with many traders preferring accounts with 2-5% returns.
Risk Management and Trading Rules
Do prop firms require traders to use stop loss?
Most prop firms require traders to use stop loss to manage risk.
Are there any requirements for risk/reward ratio when trading at prop firms?
Some prop firms have requirements for the risk/reward ratio, such as a minimum of 1:2.
What is the maximum daily loss limit of FTMO?
FTMO's maximum daily loss limit is 5%.
What is the maximum overall loss limit of FTMO?
FTMO's maximum overall loss limit is 10%.
What is the maximum daily loss limit of The5ers?
The5ers' maximum daily loss limit is 5%.
What is the maximum overall loss limit of The5ers?
The5ers' maximum overall loss limit is 10%.
Is there a limit on the maximum number of trades per day?
This depends on the rules of each prop firm. Some have limits, while others do not.
Are there any requirements for the minimum holding time of orders?
Some prop firms have requirements for the minimum holding time of orders, such as FTMO requiring a minimum holding time of 10 seconds.
Post a Comment