How to Get Funded by a Prop Firm

Proprietary trading firms (prop firms) offer traders the opportunity to trade using the firm’s capital rather than their own, allowing for larger positions and, potentially, greater profits. However, securing funding from a prop firm isn’t as simple as signing up. Most firms require traders to demonstrate their skills, discipline, and consistency before granting access to their capital. Here’s how you can position yourself to get funded by a prop firm.

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1. Understand How Prop Firms Operate

Prop firms provide traders with a funded account, allowing them to keep a percentage of the profits they generate. In return, the firm typically earns a share of the profits and ensures traders adhere to strict risk management rules.

There are two main types of prop firms:

  • Evaluation-Based Firms: Require traders to pass a test or evaluation process to demonstrate their skill. Examples include FTMO, MyForexFunds, and TopStep.
  • Direct Funding Firms: Provide immediate funding but often at a higher cost or lower initial capital. Examples include SurgeTrader and FundedNext.

Understanding their business model will help you select the right firm and prepare for their requirements.


2. Research and Choose the Right Prop Firm

Not all prop firms are the same. When choosing a firm, consider:

  • Profit Split: How much of the profits do you keep? Typical splits range from 70% to 90% in favor of the trader.
  • Trading Instruments: Ensure the firm supports the instruments you trade, such as forex, stocks, or futures.
  • Evaluation Criteria: Understand the rules and targets, such as profit goals, drawdown limits, and trading duration.
  • Fee Structure: Evaluation fees, monthly fees, and profit withdrawal fees can vary widely.
  • Reputation: Look for reviews and feedback from other traders to ensure the firm is legitimate and fair.

3. Master a Profitable Trading Strategy

Before applying for funding, you need a proven trading strategy. This means:

  • Backtesting: Test your strategy on historical data to see how it performs in various market conditions.
  • Live Testing: Use a demo or personal account to refine your approach in real-time markets.
  • Risk Management: Develop a system that includes position sizing, stop-losses, and risk-reward ratios. Prop firms often enforce strict drawdown rules, so risk management is critical.

4. Prepare for the Evaluation Process

Most prop firms require traders to pass a two-step evaluation process to qualify for funding:

Phase 1: Profit Target and Drawdown

You’ll need to hit a specific profit target (e.g., 8%-10%) within a given timeframe while adhering to drawdown limits (e.g., 5%-10%).

Phase 2: Consistency Check

In this phase, traders must demonstrate consistent performance without taking excessive risks. The focus is on proving you can trade sustainably over time.

Tips for Success:

  • Stick to Your Plan: Avoid impulsive trades or over-leveraging.
  • Manage Risk: Never risk more than 1%-2% of your account on a single trade.
  • Follow the Rules: Ensure you understand and adhere to all the firm’s guidelines.

5. Trade Responsibly After Getting Funded

Securing funding is just the beginning. To maintain your funded account:

  • Focus on Consistency: Prop firms value traders who can generate steady profits over time.
  • Avoid Rule Violations: Breaking drawdown or trading limits can result in account termination.
  • Reinvest Profits: Use your earnings to scale up or diversify your trading strategies.

6. Build a Long-Term Partnership

Once you’re funded, the relationship with your prop firm becomes a partnership. Communicate openly with the firm, adhere to their policies, and focus on growing your account responsibly.


FAQs: How to Get Funded by a Prop Firm


1. What is a proprietary (prop) trading firm?

A proprietary trading firm (prop firm) is a company that allows traders to use its capital to trade financial markets. In return, the firm takes a share of the profits while giving traders a majority cut.


2. How do I get funded by a prop firm?

To get funded, most prop firms require traders to pass an evaluation process that tests their ability to achieve profit targets while adhering to strict risk management rules.


3. What are the requirements to join a prop firm?

Requirements vary by firm, but typically include:

  • Completing an evaluation process (if applicable).
  • Meeting profit targets within specified drawdown limits.
  • Paying an initial fee for the evaluation phase.
  • Demonstrating consistent trading performance.

4. Are there any fees involved?

Yes, most prop firms charge an evaluation fee ranging from $50 to $1,000, depending on the account size. Some firms may also have monthly subscription fees for access to their platforms or accounts.


5. What is the profit split with a prop firm?

Profit splits typically range from 70%-90% in favor of the trader, depending on the firm and the account type.


6. What happens if I violate a firm’s rules?

Violating a firm’s rules—such as exceeding drawdown limits or taking unauthorized trades—can lead to disqualification or termination of your funded account.


7. Do I need prior trading experience to join a prop firm?

While experience isn’t always a requirement, it’s highly recommended. Without a solid trading strategy and risk management skills, passing an evaluation or maintaining a funded account can be challenging.


8. What trading platforms do prop firms use?

Most prop firms provide access to popular platforms such as MetaTrader 4 (MT4), MetaTrader 5 (MT5), cTrader, or proprietary platforms.


9. Can I use my own trading strategy?

Yes, most prop firms allow traders to use their preferred strategies as long as they comply with the firm’s risk management rules. Some firms prohibit specific methods, like arbitrage or news trading, so check their policies.


10. What markets can I trade with a prop firm?

Prop firms typically offer a wide range of markets, including:

  • Forex
  • Stocks
  • Futures
  • Commodities
  • Indices
  • Cryptocurrencies

11. How long does the evaluation process take?

The timeframe varies by firm. Some firms require traders to meet profit targets within 30 days, while others provide up to 90 days or more.


12. What happens after I pass the evaluation?

Once you pass, you receive a funded account. You’ll trade with the firm’s capital and share a percentage of the profits.


13. What is the maximum capital I can trade with?

This depends on the prop firm. Many firms offer scaling plans, allowing traders to increase their capital to $500,000 or more based on performance.


14. What if I lose money on a funded account?

Most firms have a predefined drawdown limit. If losses exceed this limit, your funded account may be terminated. The firm covers all losses as long as you stay within their rules.


15. Can I trade for multiple prop firms at the same time?

Yes, many traders work with multiple prop firms to diversify their income sources. However, ensure you can manage the workload and adhere to each firm’s rules.


16. Are prop firms legitimate?

Most well-known prop firms, like FTMO, MyForexFunds, and TopStep, are legitimate. However, there are scams in the market, so always research a firm’s reputation before committing.


17. How much money can I make with a prop firm?

Your earnings depend on your trading performance, profit split, and the account size provided by the firm. Skilled traders can earn thousands of dollars per month, but success is not guaranteed.


18. Is trading with a prop firm suitable for beginners?

Prop trading is more suited for experienced traders who can manage risk and follow rules. Beginners should focus on building their skills on demo accounts or small personal accounts before applying.


19. How do I know if a prop firm is right for me?

Consider the following factors:

  • Evaluation and funding rules.
  • Risk management policies.
  • Supported markets and platforms.
  • Fee structure and profit split.

20. What should I avoid when trying to get funded?

  • Over-leveraging or risking too much per trade.
  • Ignoring the firm’s rules or guidelines.
  • Trading without a tested strategy.
  • Rushing through the evaluation phase without proper preparation.

Final Thoughts

Getting funded by a prop firm is a rewarding but challenging endeavor. It requires preparation, discipline, and a clear understanding of both your trading style and the firm’s expectations. By mastering your craft and choosing the right firm, you can leverage their capital to scale your trading career and achieve financial independence.