Prop trading, short for proprietary trading, describes the practice where traders engage in trading activities using the capital of a prop firm or financial institution rather than their own capital. These traders participate in a range of financial markets and use a variety of financial instruments, including shares, options, futures, and contracts for difference (CFDs). The traders benefit from having access to funding and resources, while the firm gets access to talent and a share of the profits generated.
A prop firm is a company that provides its traders with access to capital. In return, the traders share a percentage of the profits they generate with the company.
Aspiring traders face numerous challenges in their pursuit of professional success. Capital constraints are a prevalent hurdle, but access to advanced technology, real-time market data, and sophisticated trading tools can also hinder progress. Prop firms can bridge this gap for qualified individuals by providing the necessary capital, comprehensive training programmes, and ongoing support to propel their trading careers.
The operational structure of prop firms varies considerably. Certain proprietary trading houses maintain physical locations and dedicated desks for their traders, promoting a collaborative work environment. Conversely, other firms leverage remote work models, enabling them to recruit talented individuals from a global pool.
Axi Select is a capital allocation programme for traders that provides up to $1 million USD in funding and a profit share of up to 90%. Joining the programme is free, and it consists of six stages. Traders will start in the seed stage, which requires a live account with a deposit of at least $500. After 30 days, traders can progress to the next stage if they meet the necessary requirements.
Axi Select differentiates itself from competitors through several key features. Firstly, the programme is free to join, eliminating financial barriers for aspiring traders. Secondly, the program utilises live trading accounts, providing a realistic market environment for participants, in contrast to many prop firms that rely solely on demo accounts. Furthermore, the programme's 5% profit target is comparatively lower than many competitors, potentially reducing pressure on participants and allowing them to focus on developing their skills. Finally, Axi Select boasts a reputation as one of the leading CFD brokers globally.
Programme |
Axi Select |
Industry Standard |
Registration Fee | No | Yes |
Pass Evaluation | No | Yes |
Restrictive Trading Conditions | No | Varies |
Number of Attempts | 3 | 1 |
Leverage | 100:1 | Varies, majority less than 100:1 |
Account Type | Real Trading Account | Demo |
Additional Tools | Dashboard/Leaderboard, Edge Score, Trading Room |
Varies |
FTMO is a prop trading firm based in Prague, Czechia, and has been operating since 2015. The company is looking to identify and educate talented traders and provide them with funding if they fulfil the necessary requirements.
The FTMO Challenge offers traders a demo account for trading, along with educational materials. If a trader passes the FTMO Challenge, the programme continues with the Evaluation Process, after which the trader could receive access to an FTMO count. While that account is still a demo account, the trader will receive real payouts based on the profits realised on that demo account.
The Forex Funder is among the most popular prop trading firms globally. The UK-based prop firm offers a 1-step and 2-step evaluation process, which allows traders to choose the most suitable one based on their experience and strategy. The Forex Funder uses MetaTrader 4 and 5, and while there is an evaluation fee, there is no recurring membership fee.
All traders start with the evaluation phase, where they must meet the profit target while not exceeding the drawdown limit. A trader that successfully completes the evaluation phase receives a The Forex Funder account, where they retain up to 95% of the profits earned.
E8 Markets, previously known as E8 Funding, is a US-based prop trading firm that has been operating since 2021.
It offers traders a preset 2- or 3-step evaluation programme depending on their strategy and preferences. Traders also have the option to set custom evaluation objectives such as initial balance, initial balance drawdown, and payout share, although this comes at a higher joining fee.
Traders opting for the preset 2-step evaluation will have a profit target of 8% during phase 1 and 4% during phase 2, with a maximum allowed drawdown of 8% during both phases.
Founded in 2021, True Forex Funds is a prop trading firm based in Hungary. The company has a two-stage evaluation process. After successfully progressing through stage 2, traders can receive up to $2.5 million in funding with an 80% profit split.
Phase 1 has an 8% profit target and a 10% maximum drawdown limit. The profit target goes down to 5% in phase 2, while the maximum allowed drawdown remains at 10%.
For traders seeking a faster evaluation, True Forex Funds offers a one-phase option. This expedited track requires achieving a 10% profit goal within at least 5 trading days, all completed within a 30-day window.
Traders that have successfully passed both stages will enter the funded trader programme and are eligible for an 80% profit share.
Established in 2016, The 5ers is an Israeli-based prop trading firm. It offers three different funding journeys: Hyper Growth (1-step programme), High Stakes (2-step programme) and Bootcamp (low-cost programme).
The company utilises the MetaTrader 5 platform and allows all types of trading, including algo trading, news-based trading, and holding positions overnight or over the weekend.
The 5ers charge a one-time fee, with no recurring costs. Funding can grow up to $4 million with a profit share of 100%. The profit target is 10% with a maximum allowed drawdown of 6% for Hyper Growth, while the High Stakes programme allows a maximum loss of 10% with a profit target of 8% in Stage 1.
Founded in 2021, FundedNext is a prop trading firm based in the UAE. The company offers three different challenges called Stellar, Express, and Evaluation, all with different targets and structures.
The prop trading business is booming, despite recent regulatory challenges. With the number of operators rising, it is even more crucial for traders to conduct thorough research before choosing a prop trading programme.
Traders should consider the firm´s reputation and how long it has been operating, as well as the online reviews and feedback from fellow traders.
The pricing structure of the programme should be clear and transparent from the beginning. Traders must also carefully go through the programme´s terms and conditions, as some challenges have stricter rules. Not being aware of the rules and not adhering to them could result in dropping out of a challenge and losing the joining fee.
Finally, ask yourself the question: does the programme leave the impression that it is investing in the success of its traders, or does it sound like a money-grabbing operation focused on generating subscription fees?
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*The Axi Select programme is only available to clients of AxiTrader Limited. CFDs carry a high risk of investment loss. In our dealings with you, we will act as a principal counterparty to all of your positions. This content is not available to AU, NZ, EU and UK residents. For more information, refer to our Terms of Service. Standard trading fees apply.
This information is not to be construed as a recommendation; or an offer to buy or sell; or the solicitation of an offer to buy or sell any security, financial product, or instrument; or to participate in any trading strategy. It has been prepared without taking your objectives, financial situation, or needs into account. Any references to past performance and forecasts are not reliable indicators of future results. Axi makes no representation and assumes no liability regarding the accuracy and completeness of the content in this publication. Readers should seek their own advice.
FAQ
Prop trading involves using the capital of a prop firm or financial institution rather than traders’ own capital for trading activities.
A prop firm is a company that provides its traders with access to capital. In return, the traders share a percentage of the profits they generate with the company.
Search the internet for reviews, browse through trading forums and communities for feedback from fellow traders, and do some research on the company behind the programme (history, regulation, and management).
Axi Select, FTMO, The Forex Funder, E8 Markets, True Forex Funds, The 5%ers, Funded Next.
A challenge is an evaluation process that allows the prop firm to assess your trading skills. Some funding programmes will consist of multiple challenges, while others will consist of only one.
It is common to receive a profit share of 80-90% once you have reached the advanced stages of a prop trading programme.
Many prop trading firms operate purely with demo accounts, even when traders reach the funding stage. Axi Select is an exception, as traders use live accounts from the beginning.
Most prop trading firms allow traders to have a drawdown of up to 10%, although some have stricter requirements.
It varies from programme to programme, but the most popular programmes will provide their best traders with 7-figure funding amounts.
MetaTrader 4 and 5 remain popular, but with the recent regulatory crackdown, cTrader and DXtrade are emerging as alternatives or additional options.