The Silent Role of Execution in Prop Firms

prop firm trading execution

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Execution is an incredibly important part of forex and prop firm trading. This becomes even more crucial for intraday traders and scalpers. Traders with worse execution often see much worse results in the markets than traders with great execution. 


However, execution is something often overlooked by traders looking to become funded traders. The prospect of trading large volumes of trading capital is often enough to distract traders from the trading conditions – something that cannot be overlooked. 


In this article, we’ll look at execution within prop firm trading. Why it’s so crucial and what you need to look out for. 


The Importance Of Execution In Prop Firm Trading

Execution in trading is crucial. Hedge funds and banks obviously have the best execution and this leads to them having an even larger edge over retail traders. However, retail traders can still get great trade execution and close that gap between them and the institutions.


Many traders, intraday traders specifically, will run tests on a backtester and find a strategy that works perfectly. Then they deploy this strategy on a live environment only to find that it isn’t profitable at all, or certainly not as profitable as it seemed on a backtest environment. 


The reason for this is simple. Backtests rarely take execution into account. On a backtest, the data is “perfect”. There is no latency, low fixed spreads, instant execution at the correct price, no slippage, and no commissions. This leads to great results. 


However, when you add these facts in, traders can have systems that don’t perform as well as they expected. 


This very much rings true with prop firm trading. Where often the orders being placed are very sizable and can take slightly longer to be filled. 


The Benefits Of Great Execution

There are many benefits of having good trading execution in prop firm trading. 


Firstly, trading strategies are more likely to play out over the long term as they do in backtest reports.  


Secondly, you’re much more likely to get filled at the price you’re looking to be filled at and not need to worry about getting filled late or dealing with large slippage in price. 


Thirdly, by having good execution, you’re closing that gap between you and the large institutions that have perfect execution. If you can play on a more level playing field with these institutions, you will always obtain much better trading results. 


The Drawbacks Of Poor Execution

There are plenty of drawbacks of poor trade execution that are commonly seen with some prop firms (primarily prop firms offering demo capital) and offshore forex brokers. 


Firstly, high latency will mean there is a time delay between you entering/exiting a trade and that trade actually being placed. This time delay can cause traders to lose out on profit or lose more than expected in a trade. 


Secondly, high spreads will eat away at profits, making it much harder to be profitable. The lower the spreads with your prop firm, the better. High spreads can also cause traders to be stopped out of traders when they perhaps would not have been, with tight spreads. 


Thirdly, high commissions will prevent further profits. The industry standard is $6 per lot (round turn). If you’re paying anywhere close to the $10 per 1 lot mark, you’re going to be losing a huge amount of money each year when placing larger trades. Ideally, you want the commission to be as low as possible. 


What To Look For In A Prop Firm’s Trading Conditions?

There are a number of things you should be looking at when checking the trading conditions a prop firm offers. They’re fairly simple to check, but often overlooked.




Prop firms don’t typically advertise their latency on their websites as it’s something that 90% of traders don’t even think about, or know about. The only way to really gauge the latency is to download the trading platform and undertake a free trial account, or something similar. 


If a prop firm is partnered with a brokerage, as many simulated prop firms partner with Eightcap for example, you could obtain an Eightcap Demo account and test the latency. 


If you’re using MT4 or MT5, you’ll be able to see the latency in the bottom right corner. It’s worth testing some trades to see a visible delay in the execution time.



Most prop firms will show the spreads of their currency pairs on their website. If not, you could always speak to the support team or set up a free trial account if that is something they offer. 


Once you know the spreads that the prop firm or brokerage is offering, it’s worth comparing these with the spreads of a popular forex broker. IC Markets is renowned for having great spreads, so you could cross reference them to see how the spreads are compared. 




Check what trading platforms are being offered by the prop firm. Ideally, you’ll want the name-brand platforms that everyone has heard of and used. For example, MetaTrader 4, MetaTrader 5, and cTrader are all good platforms. 


If you haven’t heard of the platform being offered, be cautious and perhaps use a free trial to test how the platform is. MetaTrader 5 is the best option in the market for retail traders at the moment and it’s a platform that many prop firms offer.




Most prop firms are upfront about their commissions for different instruments. However, if your chosen prop firm isn’t, you should look to enquire with their support team or undertake a free trial account and test the conditions yourself. 


As we said previously, anything over the $7 mark is considered high, anything around $10 is very high. 

prop firm execution trading

How To Find The Best Prop Firm For You?

There are more prop firms than ever before, so finding the best prop firm for you isn’t always easy. You need to be sure that the prop firm suits your needs and style, rather than just flocking to every new firm that pops up overnight.


So, here is what you need to consider: 

  • Reputation – A prop firm’s general reputation in the industry is very important to consider. Never work with a prop firm that doesn’t have a glowing reputation. 
  • Age – The older the prop firm, the better in most cases. Newer prop firms carry much higher levels of risk for traders. 
  • Reviews – You should be checking third-party review sites like TrustPilot to gauge the reviews of a prop firm. The more reviews and the more positive reviews, the better.
  • Cost – Some prop firms charge extortionate fees for challenges. It’s important to check the costs of challenges and compare them against others within the industry. 
  • Trading Execution – Trading execution is a huge piece of the puzzle and a piece that needs to be truly considered. 
  • Capital – It’s important to understand the maximum capital being offered and the scaling potential. You don’t want to be trading the same capital balance for years to come. 
  • Real Or Simulated – Simulated prop firms run the risk of regulatory enforcement, as seen recently with MyForexFunds. However, this is much more unlikely with a prop firm that offers live trading capital. 



In summary, it’s incredibly important to ensure that you have great trading execution being offered from the prop firm you’re looking to work with. Traders often overlook this, but can be the difference between profitable and unprofitable trading. 


Having great execution is crucial if you’re looking to close that gap between you and the institutions and give yourself the best possible chance at succeeding in forex trading. 


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