A proprietary trading firm (prop firm) is a company that provides capital to talented traders to trade on financial markets. Instead of risking your own money, you use the company's capital and share the generated profits.
This revolutionary model has democratized access to professional trading, allowing anyone with talent and discipline to trade with accounts from $10,000 to $400,000 without risking their personal savings.
History and Evolution
The concept of proprietary trading has existed since the 1980s, initially limited to Wall Street investment banks and hedge funds. These institutions employed traders to speculate with their own capital, hence the term "proprietary".
Key Timeline
- 1980s:Birth of prop trading in investment banks
- 2008:Financial crisis - Volcker Rule regulations limit banking prop trading
- 2010:Emergence of first online retail prop firms
- 2015:Topstep popularizes the two-phase evaluation model for futures
- 2020:Post-COVID boom - explosion in the number of prop firms
- 2021:Take Profit Trader arrives and innovates with FREE Pro activation and the fastest payments in the market
- 2025:Over 100 active prop firms, market estimated at $2 billion
How Does a Prop Firm Work?
The business model of modern prop firms is based on a rigorous evaluation process to identify profitable and disciplined traders. Here's the typical process:
- • Profit target: 8-10%
- • Max drawdown: 10-12%
- • Duration: 30-60 days (or unlimited)
- • Cost: $50 - $600 depending on size
- • Profit target: 5%
- • Same drawdown rules
- • Duration: 30-60 days
- • No additional fees
Once you successfully pass both phases, you get a funded account with the prop firm's capital. You typically keep 80-90% of the generated profits, with monthly or bi-monthly withdrawals.
Some prop firms likeApex Trader Fundingeven offer accounts up to $300,000 with ourexclusive promo code (always the best discount available).
Different Types of Prop Firms
Forex Prop Firms
- • Trading currency pairs
- • Mainly MetaTrader 4/5
- • Leverage up to 1:100
- • Examples: FTMO, Funded Next, E8 Funding
Futures Prop Firms
- • Trading indices (ES, NQ, YM)
- • NinjaTrader, Sierra Chart, Tradovate
- • Micro and standard contracts
- • Market leaders: Topstep (pioneer), Take Profit Trader (innovation), Apex (promos)
💡 Why Take Profit Trader?
- • Offers Tradovate platform for trading
- • 24h payments vs 7-14 days with others
- • Responsive support even on weekends
- • No restrictive consistency rule
Instant Funding
- • No challenge required
- • Smaller account initially
- • Performance-based scaling
- • Examples: The5ers, Blue Guardian
Crypto Prop Firms
- • Trading Bitcoin, Ethereum, etc.
- • 24/7 markets
- • High volatility
- • Examples: FundYourFX, Crypto Fund Trader
Advantages & Disadvantages
✅ Advantages
- •No personal risk: You only lose the evaluation fees
- •Significant capital: Access to $10K-400K capital
- •Advantageous profit split: Keep 80-90% of profits
- •Training included: Access to educational resources
- •Scaling possible: Increase your capital with performance
❌ Disadvantages
- •Evaluation fees: $50-600 non-refundable
- •Strict rules: Drawdown limits, consistency rules
- •Psychological pressure: Challenge stress
- •No guarantee: Majority fails the challenge
- •Demo account: Trading on simulated account (not always)
💡 Myths and Realities
❌ Myth: "Prop firms are scams"
✓ Reality: Legitimate prop firms pay millions in profits every month. Thousands of traders make a living from their funded accounts. You just need to choose established firms with good reviews.
❌ Myth: "It's easy to pass the challenge"
✓ Reality: Only 5-10% of traders pass the challenge on the first try. You need a real strategy, discipline and excellent risk management.
❌ Myth: "You trade with real money"
✓ Reality: Most prop firms use demo accounts copied to the real market. Some like FTMO claim to place orders on the real market for funded accounts.
Key Industry Statistics
Market size in 2025
Active prop firms
Active traders
Success rate
Average profit split
Average funded trader income
👤 Who Are Prop Firms For?
✅ Ideal Profile
- • Minimum trading experience (6-12 months)
- • Tested and profitable strategy
- • Excellent risk management
- • Discipline and patience
- • Limited capital but proven talent
- • Time to trade regularly
❌ Avoid If
- • Complete beginner in trading
- • Looking for quick gains
- • No defined strategy
- • Discipline problems
- • Tight budget for evaluations
- • Unrealistic expectations
Ready to Start Your Adventure?
Save up to 90% on your first evaluation with our exclusive promo codes