5 Ways to Spot a Scam Prop Firm

scam prop firm

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In the world of trading, there are so many amazing opportunities. Unfortunately, there are some prop firms that try to take advantage of enthusiastic traders. Knowing how to tell if a trading company is legitimate or a potential scam is massively important. In this article, we’re here to help you navigate the prop firm space by sharing five easy ways to spot a scam prop firm. From understanding their rules to figuring out if their funding offers are even real. We want to give you the knowledge to trade safely. By sharing these insights, we hope to build a community of smart traders. Who can confidently choose the right path for their trading journey. 

prop firm scam frustrated computer

It is important to note that just because a prop firm may apply to 1 or more of these points, it does not mean that they are a scam. However, they are definitely red flags and if you spot one you should look further into the firm with a critical eye.


Here are 5 Ways to Spot a Scam Prop Firm

  1. No one features in the ‘About Us’ section of their website

If there are no names or images of the team running the prop firm, this is a huge red flag. It means that they do not want to be associated with the firm. A leader of a strong prop firm (or any organization) should be proud to be associated and not hide behind a screen. 

On the flip side, it is a green flag if the management of a prop firm puts themselves out there, on their website or social media. This is especially true if they are using these platforms as tools to teach traders useful trading skills.


2. They have many 5-star Trustpilot reviews in a short amount of time

A large amount of Trustpilot reviews take years to accrue. If a prop firm (or any business) has hundreds or thousands of reviews in a very short amount of time, you should be hesitant. It could mean that they have bribed people into leaving fake reviews. Trustpilot puts measures in place to avoid this from happening, but it does still happen.


3. Their prices are suspiciously low

Suspiciously low pricing usually indicates one of two things: The company needs money, or the program was never worth the original price, to begin with. You must remember that a prop firm is a business and has expenses to cover. If a firm is offering programs at prices that are too good to be true, it probably is. This goes for discounts as well. If a prop firm is offering huge discounts, several times a year on their programs, be wary.

Prop firms might do a low-cost program. This is not relevant here. The implication is that all the programs are very cheap. 


4. Their rules seem unclear or vague

Before starting with a prop firm, it is vital to be aware of all the rules and boundaries that they have in place. This will ensure that you trade according to the rules and do not get penalized for breaking them. When a prop firm has unclear rules, they are purposely setting traders up to trade in a way in which they do not allow, without them knowing. If a firm is not transparent with its rules it is very easy for it to claim that traders have acted wrongfully and terminate their accounts. They will also likely not give a refund. 


5. They have a large amount of social media followers in a short period of time

Similar to the Trustpilot reviews, gaining a large number of followers takes time. It is suspicious if a prop firm has thousands of followers shortly after opening. This usually indicates that they have bought followers. A good, trustworthy prop firm should not need to buy followers. They will gain them over time when they have happy and satisfied customers. 


By shedding light on common red flags and offering practical advice, these tips should give you a hand in making informed decisions. If you need more assistance picking a prop firm, you can either check out our article 10 Questions to Ask Yourself Before Choosing a Prop Firm or send us an email at [email protected]


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