Frequently Asked Questions

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A proprietary trading firm (prop firm) is a company that provides capital to traders to trade financial markets. Unlike traditional trading where you use your own capital, prop firms allow you to trade with their money and share the profits. Most prop firms require traders to pass an evaluation process before gaining access to funded accounts.

Prop firms typically earn revenue through evaluation fees, monthly subscriptions, and profit splits. The core of the business model is the evaluation fee. Traders pay to attempt a challenge, and since only a fraction pass, this creates a consistent profit stream for the firm. Some firms also capitalize by copying the trades of their top-performing traders, allowing them to potentially generate profit directly from the markets using vetted strategies without putting capital at risk with unproven traders.

Many prop trading firms are legitimate businesses that provide real opportunities for traders, but the space also includes some questionable operators. Legitimate firms have clear terms, transparent evaluations, and a track record of paying successful traders. At PropFirms.gg, we actively vet the industry to help you identify trustworthy firms and avoid potential pitfalls so you can focus on trading, not second guessing.

Retail trading involves using your own capital to trade markets, with all profits (and losses) belonging to you. Prop trading involves using a firm's capital, with profits being split between you and the firm. Prop trading typically offers access to larger capital, better trading conditions, and removes the risk of losing your own money, but requires passing evaluations and following trading rules.

Yes, most traders work with multiple prop firms simultaneously to diversify their income streams and access more capital. However, some firms have exclusivity clauses or restrictions on trading the same strategy with multiple firms. Always check the terms and conditions of each firm before trading with multiple providers.

A prop firm evaluation (also called a challenge, assessment, or verification) is a testing period where traders must demonstrate their trading skills before receiving a funded account. Evaluations typically involve profit targets, maximum drawdown limits, minimum trading days, and other rules designed to identify disciplined, profitable traders.

Some prop firms allow evaluations to be completed in as little as one day if profit targets are reached, while others take several days or longer. To find the best match for your goals and trading pace, visit our prop firm comparison page and review your options side by side.

If you fail an evaluation by violating trading rules or exceeding maximum drawdown limits, most firms require you to purchase a new evaluation. Some firms offer discounts on retakes, and a few offer free retries under specific conditions. A small number of firms offer 'reset' options that allow you to restart the evaluation for a fee that's lower than the cost of a new evaluation.

The most common reasons for failing evaluations include: exceeding maximum drawdown limits, violating trading rules (like maximum lot size or news trading restrictions), not meeting minimum trading days requirements, using prohibited strategies, and attempting to manipulate the evaluation system. Psychological factors like overtrading and revenge trading also contribute significantly to evaluation failures.

Yes, some prop firms offer instant funding with no formal evaluation process. RIPS' favorite Straight to Funded model is available through Tradeify. Link Tradeify: https://propfirms.vercel.app/firms/tradeify

The prop firms we work with provide access to a wide range of futures products on top exchanges like CME, COMEX, NYMEX, and CBOT, with some also offering forex or cryptocurrency trading. Our comparison tool makes it easy to find the firm that best matches your markets and trading style.

NinjaTrader and Tradovate are the most commonly used platforms across prop firms, though some do offer proprietary options. Platform availability varies by firm, and our comparison tool makes it easy to find the best match based on your preferred trading platform.

Most of the prop firms we recommend offer generous profit splits ranging from 80 to 90 percent, with some even providing 100 percent up to a set payout threshold. You can compare all the profit splits using firm-by-firm breakdowns, inside our Prop Firm Directory section on the website.

Policies on automated trading vary widely. Some firms explicitly allow EAs and algorithmic trading, others prohibit them entirely, and some allow them with restrictions (like no high-frequency trading). Always check a firm's terms regarding automated trading before using EAs or algorithms.

Most prop firms enforce maximum drawdown limits between 5% and 10% of the account balance. These limits can be based on daily losses, total account equity, or a combination of both. Some firms also apply trailing drawdowns that adjust as your balance increases. Understanding how each firm defines and calculates drawdown is essential before starting an evaluation — our prop firm comparison page makes it easy to compare these rules side by side.

Most top prop firms offer payouts ranging from 80% to 90%, with some allowing traders to keep 100% of profits up to a certain threshold—usually the first $10,000 to $15,000. Payouts are typically processed through services like Rise, Plane, or ACH, and many firms now offer same-day or weekly withdrawal options. You can compare profit splits, payout speeds, and thresholds side by side in our Prop Firm comparison chart.

Most prop firms require you to be in profit and meet a minimum number of trading days before you can request a payout. All payout rules can be easily compared using our prop firm directory or comparison chart.

Yes, income earned from prop trading is generally taxable in most countries. However, how it's taxed varies by location and individual circumstances. In some jurisdictions, it may be considered self-employment income, while in others it might be treated as capital gains or other types of income. We recommend consulting with a tax professional familiar with trading income in your jurisdiction.

If you exceed the maximum drawdown limit in a funded account, the firm will typically close your account. Some firms offer options to retain your trader status, such as purchasing a new evaluation at a discount or paying a reset fee to restore the account. You are not personally liable for losses in the funded account beyond losing access to the account itself.

The firms we feature on PropFirms.gg are reputable and transparent about their pricing. They clearly outline evaluation fees, platform costs, and payout structures so traders know exactly what to expect. Our comparison tool helps you quickly identify these details, making it easier to choose a firm with no surprises.

Consider these factors when choosing a prop firm: trading style compatibility (scalping, day trading, swing trading), account size options, evaluation difficulty, profit targets, drawdown rules, available markets and instruments, trading platform, profit split, payout methods and frequency, customer support quality, and reputation in the trading community. Our comparison tool can help you filter firms based on these criteria.

Start with an account size that matches your experience level and risk management skills. Beginners should typically start with smaller accounts to minimize evaluation costs while learning the process. More experienced traders might start with larger accounts if they have a proven strategy and solid risk management. Consider your trading style, position sizing needs, and the evaluation cost relative to your budget.

Most reputable prop firms we feature offer evaluation accounts starting between $49 and $300, depending on the account size and funding model. Some firms also run frequent discounts or offer Straight To Funded options for a higher upfront fee but no evaluation. With our comparison tool, you can quickly find the best fit for your budget and trading goals.

There's no single 'best' strategy for all evaluations, but successful approaches typically share these characteristics: consistent risk management (usually risking 1% or less per trade), focus on high-probability setups rather than frequent trading, adaptability to current market conditions, and alignment with the specific rules of the evaluation. Strategies that work well include price action trading, trend following, breakout trading, and some forms of swing trading.

To prepare for an evaluation: thoroughly understand all the rules and requirements, practice on a demo account using the same platform and instruments, develop and backtest a trading strategy that works within the firm's parameters, create a trading plan with clear entry/exit criteria and risk management rules, keep a trading journal to track performance and psychology, and start with a smaller account size to gain experience with the evaluation process before attempting larger accounts.