Choosing The Right Prop Firm
If you’ve ever tried choosing a prop firm by googling ‘best prop firm’ you’ll know that there’s so much information out there about so many firms. Websites will throw out terms like “high leverage” and “high drawdown”, but do you really need those things?
To be honest, there is no singular best prop firm. Each firm has different benefits for different reasons depending on a variety of different elements. What you really should be asking yourself is ‘which is the right prop firm for me?’. Which brings us to this article.
Figuring out which one is best for you depends on your priorities and your trading style. In this article we’ll go over a couple of questions about your trading style and plans, this should be able to help you pinpoint what you’re looking for. We’ll also give you a couple of examples to help point you in the right direction.
What is your starting budget?
All prop firms require a participation fee to begin their challenges. Generally, the lower the fee, the less funding you’ll be given and the less you’ll be able to make. Vice versa, the higher the participation fee, the higher the starter funding capital and the more you’ll be able to make.
If you are an experienced trader and have faith in your skills, you may want to challenge yourself and choose a more expensive plan. Some firms will refund your participation fee once you become a certified trader.
The5ers– lowest: $260 highest: $850
Funded Next– lowest: $99 highest: $999
Smart Prop Trader– lowest: $75 highest: $875
What assets do you specialize in?
Depending on what assets you specialize in trading, you’ll go with a firm that offers those. Most firms offer forex, metals, and indices, but some also allow crypto, commodities, stocks, bonds, and even futures.
FTMO– Forex, Commodities, Indices, Crypto, Stocks, Bonds.
Audacity– Forex, Indices & Commodities
Surgetrader– forex, metals, indices, oil, crypto, and stocks.
The5ers– Forex, metals, indices
Is it important to you to be able to hold overnight/over the weekend?
Depending on your trading style, especially if you’re a swing trader, it might be important to you to be able to hold overnight and on weekends. Some firms do allow holding overnight and on weekends, and some don’t and are more suited to scalpers
The5ers– allow holding overnight and on weekends
Funded Next- allow holding overnight and on weekends
Surgetrader– can hold overnight but not over the weekend
The Funded Trader– allow holding overnight and on weekends
Are you a high-risk trader or a low-risk trader?
If you’re a trader who makes high-risk decisions, you might be interested in going with a firm that offers programs with high leverage, such as:
The5ers High Stakes– up to 1:100
FTMO Evaluation Program- 1:100
The Funded Trader Royal Challenge– up to 1:200
*be aware that high leverage can terminate your account quickly
If you are a low-risk trader, who is nervous about the high-leverage temptation, you might want to choose a firm with a low-risk program, such as:
The5ers Bootcamp– 1:10 leverage
Lux Trading Firm Instant Funding– 1:10
Are consistent parameters important to you?
There are traders who prefer to go with prop firms with more strict rules, such as stoploss, it makes them more responsible traders. Some traders prefer full freedom with no restrictions.
Examples of programs without strict rules:
FTMO Swinger Program
The5ers Instant Funding
The Funded Next Royal Challenge
Examples of programs with tight restrictions:
FTMO Evaluation
The5ers Bootcamp
Lux Trading Firm
How important is reputation to you?
The answer to this question should be ‘very’! But there are traders who like to try new firms because sometimes they start with fewer restrictions (it’s not recommended!).
In order to check a firm’s reputation you should:
- Check Trustpilot
- Check out their social media pages
- See what other traders say about them
- Read the ‘About Us’ section on their website, check if there are real images of employees
- Find out how long the firm has been around for
Are you wanting to make a long-term relationship or make a quick buck?
If you want a long-term relationship with a prop firm, take into account that plans may be more expensive and you’ll have less leverage.
If you just want to make a quick buck, Take into account that the challenge will be harder to pass, but leverage will be higher.
Which payment methods do they accept?
Have a look into the payment methods that firms accept, they generally accept a wide range of methods. If you would like to pay in cryptocurrency, several firms allow this, also look into which cryptocurrencies they accept.
FTMO– Google Pay, bank wire transfer, Nuvei, Checkout.com, Confirmo, Unlimint, Skrill, and cryptocurrencies
E8– Credit/debit card or cryptocurrencies
The5ers– Credit/debit card or cryptocurrencies
Which withdrawal methods are available?
In addition to payment methods, you might also want to take a look at which methods you can use to make a withdrawal.
The Funded Trader– Deel and cryptocurrencies
FTMO– Skrill, bank wire transfer, and cryptocurrencies
E8– Bank wire transfer, Paypal, Revolut, Wisepay, Payoneer, and cryptocurrencies
The5ers– Wise, PayPal, Payoneer, Revolut, and cryptocurrencies
In conclusion, picking a prop firm to start trading with can be tricky, and if not done with enough research, can waste a lot of time and money. By asking yourself these questions before you start your research, you’re going to save yourself a lot of effort.
Let us know in the comments if this helped you choose a prop firm, and if so, which one!
