With prop trading ecosystem becoming increasingly saturated, it is becoming more difficult to identify good forex prop trading firms. When people talk about trading – forex, indices, crypto, stocks, futures, etc. – it is usually more of how-to and less of where-to. Apart from having a good knowledge of forex trading, it is good to have a good understanding of proprietary firm if you are considering raising capital from them to trade.
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Best Forex Prop Trading Firms in 2024
Proprietary trading, otherwise known as prop trading, involves trading activities in which a trader trades with the capital of a proprietary firm or other financial institutions rather than their own funds.
While prop firms provides the financial capital for trading; traders have the power to make all trading decisions, provided their loss is not above the maximum drawdown level, at which point the prop firm steps in and freezes the trader’s account to prevent further financial loss.
The maximum drawdown (MDD) measures the largest loss a Prop firm can tolerate from a trader, and it depends on several factors, from equity, trading style, trading history, etc.,. Once a trader reaches the MDD level, the firm takes necessary actions to prevent further losses.
How Forex Prop Trading Works
The workability of prop firms is simple; they have the capital and they are constantly in search of good, experience and knowledgeable traders to join them, trade with their funds and share profit. For instance, if you have a good knowledge of forex trading and you don’t have the funds, you can apply to a prop firm and they will assess your skill, if you pass their test, you will be given an account to manage.
The first step for them is to select suitable traders; This usually involves assessing and evaluating traders by their trading experience, past results, risk level and the amount of capital they keep. These also determine how much will be allocated to the traders as capital if selected.
After the selection and capital allocation by the prop firm, the traders begin trading in the forex market with the firm’s capital using different financial instruments. The traders determine the trajectory of their trading, from short-term trading to swing and position trading. They also determine the financial tools to use in their market analysis, either fundamental or technical analysis, or a combination of the two.
Profit sharing is one of the most important aspects of prop trading and this usually follows a pre-defined sharing module. This varies from one company to another as well as from one funding system to another. Overall, most top forex prop firms will display their profit-sharing module on their websites so the traders will know before applying for their program. Meanwhile, some firms charge additional fees to their traders to cover basic costs like utilities, trading software, and terminals, among others.
Although the primary goal of prop trading is to generate profits for the prop firm, there are also some additional perks the traders enjoy, which explains why the forex prop trading ecosystem is growing rapidly. Regardless of the benefits, selecting the best forex prop trading firm is the first step to a successful forex prop trading in 2024.
How to Select the Best Forex Prop Trading Firms
Here are some important things to factor in when selecting a Forex prop firm to trade with;
- Firm’s Reputation: As an aspiring trader or someone seeking to change their prop firm, it is crucial to select a firm with an upstanding reputation, especially when it comes to profit-sharing agreements, among other things. Reading online reviews and testimonials about your potential prop firm is a good way to start as you can learn from other people experience.
- Upfront Fees and Profit-Sharing Structure: Next you want to consider the transparency concerning any upfront fees and associated costs, while also ensuring their profit-sharing module aligns with your interest. While allocating a high percentage of the profit to the traders is a sign of good standing in the prop trading ecosystem, understanding their fee structure will save you from potential surprises that may arise when you start trading. Reputable prop firms will put this information up on their website, but if they don’t, reviews and testimonials will reveal this secret.
- Adequate Support: While transparency with the fee structure and reputation are a necessity, a good client support system cannot be understated. You want to ensure that the prop firm you choose has a proactive client support system and functional community.
- Educational Materials: A key identifier of top forex prop firms is the provision of educational materials for their traders. As an aspiring or seasoned trader, ensure the prop firm of your choice provides you with educational materials. Some firms often go as far as organizing webinars, mentorship programmes, and online communities to help their traders stand out in the forex market and at the same time, mitigate their loss.
- Access to Advanced Trading Platforms: Lastly, ensure the firm you’re trading with is equipped with industry-leading trading platforms with the best functionalities and features that allow you to spread your wings freely.
Top 5 Best Forex Prop Trading Firms in 2024
Here are our top 5 best forex prop trading firms in 2024, this is best on reviews and testimonials, we advised that you do your own added research before making a decision.
FTMO
Founded in 2015 with tons of positive reviews to back it up, FTMO offers an attractive profit split of up to 90% to their traders. This top forex prop firm can offers a capital of up to $200,000 to their traders to trade in different markets, including forex, stocks, indices, commodities, and cryptocurrencies.
Pros
- High profit split of up to 90%
- Leverage up to 1:100
- Trading on MT4 and MT5 platforms
- Access to diverse trading instruments including forex, stocks, indices, commodities, and cryptocurrencies
- No maximum trading period
- First payout after 14 days
- Free trial demo account for beginner traders
- Allows overnight holdings for traders with a Swing account
Cons
- Strict evaluation criteria
- Restrictions of news trading
- High prices
The5ers
Ranked among the top 3 prop firms by multiple reviewers is The5%ers. Founded in 2016 and headquartered in London, UK, with multiple branches across different parts of the world, The5%ers uses the MT5 platform, allowing their traders to trade freely in different currencies, stocks, precious metals, and indexes. Additionally, they offerfull-time traders higher capital than originally available for them, ranging from $5,000 to $500,000 on three different funding programmes.
Pros
- Profit share between 80% to 100%
- Leverage up to 1:100
- Three different funding programmes are available
- Access to a large variety of trading instruments including forex, metals, and indices
- Allows overnight and weekend holdings
- Demo account of $25,000 capitalwith checkpoints, target performance factor, and a winner factor
- Access to trading tools, analytics, strategy ideas, and an economic calendar.
Cons
- Restriction to only three accounts per trader
- Mandatory stop-loss with bootcamp
- Minimum profitable day requirement with high-stakes
- Low leverage with bootcamp and hyper growth
FundedNext
FundedNext is a UAE-based prop trading firm with offices in the USA and Southeast Asia and they provide uninterrupted services to traders worldwide. They can provide trading capital of up to $300,000 to their traders and a profit split of up to 95%.
Pros
- Six different funding programmes that give you freedom of choice
- Profit share of up to 95%
- Leverage up to 1:100
- Overnight and weekend holding allowed
- Trading on MT4 and MT5 platforms
- Demo account with a 15% profit share for each trading cycle
- Supports news trading except for consistency express model
Cons
- Requires minimum trading days of 2 to 5 days
- No news trading with consistency express model
- Profit target of 25% with consistency and non-consistency express model
FundingPips
A unique quality about FundingPips is their phased funding programmes uniquely developed to evaluate traders and provide support in overcoming funding challenges. They offer funding ranging from $25,000 to $100,000 on their three unique account types, which are capped at $300,000 when combined. Overall, Funding Pips believes that traders progress through key evaluation stages in their professional journey and their programme is developed to support their traders’ growth journey.
Pros
- Multi-phased funding programmes designed to support trader’s growth
- Leverage up to 1:100
- Profit share of 60% up to 100% on two-step evaluation
- Supports overnight and weekend holding
- Supports news trading during evaluation
- Pocket-friendly evaluation program prices
- Supports trading in various markets, including forex, commodities, indices, and cryptocurrencies
Cons
- The drawdown on the evaluation programme is equity-based
- There’s a consistency score on the two-step x evaluation
- A minimum trading period on two-step x evaluation
- Has a withdrawal requirement of 1%
E8 Markets
E8 Markets provides capital to traders across the globe without any regional restrictions. With funding ranging from $5,000 to $400,000 and a growth potential of $1 million, they only charge a reimbursable one-time initial fee, which is determined by the selected account type. Additionally, the Tier-1 liquidity provider grants their traders direct market access to their brokers, allowing them to trade in multiple instruments, including forex, currency pairs, stocks, indices, energies, metals, and cryptocurrencies.
Pros
- Three different account types that match the trader’s goals
- Allows weekend and overnight holding
- Support news trading
- Requires only a one-time initial payment which varies with the selected account type
- Funding of up to $400,000
Cons
- Low drawdown compared to the competitors
- Profit can only be withdrawn once in 14 days
- Limited customer support channels
- Platforms are limited to MT5 and Match-Trader
Conclusion
This list of the top 5 forex prop trading firms is based on a result from careful and in-depth research into the forex prop trading ecosystem. While we try to give a definite verdict on our choices, we cannot dispute individual preferences, which differ from one person to another.
However, when deciding on wish firm to subscribe to, it is better to go for a firm whose plans align perfectly with your trading goals and career objectives.