Prop Firms Reviews

The proprietary trading industry is booming, with hundreds of prop firms emerging and offering skilled traders access to significant trading capital. This surge presents an exciting opportunity, but it also brings hidden risks, complex conditions, and wide variation between firms.

Without proper research, traders risk wasting evaluation fees or falling into the traps of opaque and unreliable firms. That’s why a big-picture perspective is essential.

This article serves as a comprehensive hub, covering everything from basic definitions and firm models to account types, payout structures, and the “unspoken rules” of the prop firm world. If you’re looking for a prop firm that aligns with your trading style and profit goals, this is where your journey should begin.

1. What is a prop firm, and is it right for you?

If you're a trader with a solid strategy but not enough capital to scale, a prop trading firm might offer a serious breakthrough. Instead of risking your own money, you trade using the firm’s funds and split the profits under clear terms. 

1.1.  Prop firms explained in simple terms

A proprietary trading firm, often called a prop firm, is a company that funds skilled traders to trade financial markets. Rather than using your own capital, you use the firm’s. In return, you share a portion of the profits, usually 70% to 90%, with the firm.

It’s a performance-based partnership: the firm provides funding and tools, and the trader brings skill and consistent execution.

1.2. Key benefits of joining a prop firm

Trading with a prop firm isn’t just about getting funded; it’s also about growth and professionalism. Here are the most attractive benefits:

• Access to large trading capital: You can trade with $10,000 to $200,000+ without using your own money. This allows you to scale faster and execute larger trades.
• Low personal risk: Your only financial risk is the one-time evaluation fee. You don’t lose your own funds if you fail.
• Better trading discipline: The firm’s rules, like drawdown limits and minimum trading days, push you to follow a structured, disciplined trading system.
• High earning potential: Most firms offer 70% to 90% of profits to the trader. Skilled traders often earn more here than by trading small personal accounts.

This model isn’t for everyone, but if you have trading experience and a proven strategy, a prop firm can be a serious step forward. Still, it demands patience, emotional control, and consistency under pressure.

1.3. Risks you need to know before joining a prop firm

With opportunity comes risk. Prop trading can be rewarding, but only if you understand the downsides and prepare for them:

• Evaluation fees are non-refundable: If you fail the challenge, you lose the fee. Many traders lose money due to overconfidence or a lack of preparation.
• Strict rules can be unforgiving: Violating even one small rule, like a daily loss limit, can cost you the entire account, even if you were profitable overall.
• Scam firms do exist: Some “prop firms” exist just to collect evaluation fees. Red flags include vague terms, no company info, and consistent complaints about payouts.
• Some funded accounts are only simulations
  A few firms run simulated accounts even after funding. This can affect trade execution and doesn't replicate real market conditions.

Understanding these risks helps you avoid false expectations and poor decisions. Prop trading isn’t an easy money path; it’s a serious model that suits traders with skill, discipline, and a long-term mindset.

2. Types of Prop Trading Firms

Prop firms today are generally divided into two main types, each with different operating models and suited for different trader profiles:

• Broker-backed prop firms: These firms partner directly with licensed brokers, providing real trading environments (live execution), direct market access, and often faster payout processing. They may also earn additional revenue through spreads, trading commissions, or platform fees.
• Independent prop firms: These firms are not affiliated with any broker and usually use simulated environments to evaluate traders. Most of their revenue comes from challenge fees and profit sharing. Well-known firms like FTMO and The Funded Trader belong to this group.

Although both models aim to help traders access large capital, they offer very different experiences. Understanding the difference between broker-backed and independent prop firms will help you choose the one that best matches your trading style, profit expectations, and risk tolerance.

3. How a prop firm works

Behind every funded trading account is a tightly structured process designed to assess a trader’s skills and risk control. Understanding how a prop firm operates not only helps you prepare better but also increases your chances of choosing a transparent and trustworthy firm.

3.1. A typical journey: From evaluation to payout

Most prop firms follow an evaluation model, where traders must pass one or more assessment phases before receiving a live funded account. Here’s the standard process you’ll go through when working with a prop firm:

• Choosing a firm and registering for the challenge: Traders research and compare different firms, then select one that fits their strategy. After that, they pay the required fee to join the challenge.
• Passing the evaluation phase: You trade on a demo account with clearly defined rules for drawdown, profit targets, and minimum trading days. You must follow all the rules to be approved.
• Receiving a funded account: Once you pass, you get access to a live account with capital that is significantly larger than your own. At this point, you officially become a trader for the firm.
• Trading and generating profits: You trade using your own strategy while respecting the firm’s risk limits. Any profits you make will be shared according to the agreed payout ratio.
• Requesting payouts: At regular intervals (usually every two weeks or monthly), traders can request their share of the profits, once the firm confirms all rules were followed.

This process allows prop firms to filter out unqualified traders and protect their capital from reckless behavior. If you're well-prepared in terms of strategy and mindset, this is a real opportunity to scale up your trading without using large personal funds.

3.2. How prop firms make money (and why you should care)

To avoid financial traps, it's essential to understand how a prop firm generates revenue. This insight helps you distinguish between firms that support traders long-term and those that primarily profit from challenge fees.

1. Evaluation fees: This is the most common and consistent source of revenue. Every trader must pay a fee to join the challenge, regardless of success or failure. With relatively low pass rates (estimated at just 5–10%), many firms rely heavily on this income.
2. Profit splits: This revenue comes from successful traders. When a trader earns profit on a funded account, the firm keeps a percentage (usually 10–30%) as a commission fee.
3. Trading-related costs: Some firms, especially broker-backed ones, also profit from spreads, commissions, or platform fees, creating an additional income stream.

If a firm seems focused only on collecting evaluation fees, designs overly strict rules to lower pass rates, or shows little interest in trader development, these are warning signs. A sustainable firm will actively support its traders because their success means mutual profit: when traders win, so does the firm.

4. Common types of prop firm evaluations

Each prop firm has its own evaluation model, ranging from simple to complex, designed to assess a trader’s skill and risk management. 

Understanding these formats will help you choose the one that best matches your experience and personal strategy.

No matter which format you choose, it's essential to read each firm's rules carefully to avoid disqualification over minor mistakes. Choosing the right evaluation model not only improves your chances of passing but also helps you maintain your funded account over the long term.

5. Funded Accounts

A funded account is the ultimate goal for most traders joining a prop firm. However, not all funded accounts are the same. Depending on the firm's model, broker-backed or independent, you may be trading on a real-money live account or a simulated environment where profits are tracked but don’t fully reflect real market conditions.

5.1. Live Funded Trading

This is the highest-tier account type, where traders operate directly in the live financial markets using the firm’s real capital. All trades are executed live at market prices, just like a personal trading account with a broker.

Key features:

• The account is connected directly to the market (live execution), not influenced by simulation.
• Execution speed, latency, and slippage reflect real market conditions.
• Profits earned are real and can be withdrawn after each payout cycle (usually biweekly or monthly).

Advantages: Traders experience a fair, real-market environment that helps optimize true performance. Strategies like news trading, scalping, or arbitrage can be more effectively applied under live market conditions.

Note: Not all firms offer live accounts. This format is more common with broker-backed prop firms like Blueberry Funded or IC Funded, which can provide real liquidity.

5.2. Simulated Trading

This is the most common account type in today’s prop trading world, especially with independent firms like FTMO or The Funded Trader.

Key features:

• Trades are based on real market data, but orders are not executed in the live market. Instead, the system simulates execution to calculate results.
• Trader profits are tracked virtually and can be withdrawn if firm conditions are met.
• Factors like slippage, spreads, and execution may be modified using the firm’s internal algorithms.

Advantages: Useful for evaluating a trader’s risk control and discipline. Lower operational costs for the firm make these accounts more accessible to new traders.

Limitations: Traders cannot apply strategies that rely on precise execution (like arbitrage or news trading). Some firms may use simulated environments to limit risk by applying wider spreads or restrictive conditions.

5.3. Profit Splits

Whether the account is live or simulated, all prop firms operate on a profit-sharing model between the trader and the firm.

Common structures:

• Typical profit splits are 70/30 or 80/20, with traders receiving the majority.
• Some firms offer up to 90% if the trader maintains consistent performance over several cycles.

Things to watch for:

• Some firms have a minimum withdrawal threshold or fixed payout windows (e.g., after the first 30 days).
• The payout model may vary depending on account type (live vs. simulated) and the firm’s specific withdrawal policies.

6. 9 key criteria to evaluate and choose the right prop firm

Not all prop firms offer the same trading experience. A good firm doesn’t just give you access to capital; it also helps you grow as a trader, maintain consistent profits, and avoid unnecessary risks. Before getting started, it’s essential to evaluate each firm based on 9 proven criteria trusted by the trading community.

1. Evaluation process: Understand whether the firm uses a 1-phase, 2-phase, or instant funding model. Each format varies in difficulty, time, and requirements, depending on the trader's level. Some firms also impose time limits or hidden rules that can easily trip you up if you're not careful.
2. Profit split and payout policy: Most firms offer a profit split between 70% and 90%. Look for firms with clear and flexible payout schedules (e.g., every 2 weeks or monthly). Also, check for rules like minimum holding periods before your first payout, or restrictions on how and when you can withdraw funds.
3. Account types and fees: Compare one-time challenge fees versus subscription-based models. Some firms may charge additional fees for account management, withdrawals, or platform access. Check whether you can choose from standard, speed, or instant funding accounts.
4. Trading rules and risk limits: Many traders fail due to strict or unclear rules: equity-based drawdown, daily loss limits, consistency rules, or volume restrictions. Read the rulebook carefully and clarify anything vague before you commit to a challenge.
5. Leverage and tradable instruments: Some firms offer high leverage during the challenge phase but reduce it significantly after funding, potentially limiting your strategy. Also, review the range of instruments allowed; many firms are forex-only, while you might need access to indices, gold, crypto, etc.
6. Trading platforms and tools: MT4, cTrader, and MT5 are common and beginner-friendly platforms. If a firm uses a proprietary platform, test for execution speed, stability, and compatibility with your strategy (e.g., EA, scalping, copy trading). Some firms also offer intuitive dashboards to manage your account.
7. Customer support and education: Choose firms with responsive support (ideally 24/7) via live chat or email. Learning resources like webinars, trading guides, and market blogs are a bonus, especially helpful for new or evolving traders.
8. Transparency and community: Firms with a public CEO, verified headquarters, and a track record of operations are more trustworthy. Join communities on Discord or Telegram to learn from real trader experiences and get an honest read on a firm’s reputation.
9. Onboarding process: A reliable prop firm should offer a smooth onboarding process with simple registration, fast verification, and no excessive paperwork. The timeline from challenge completion to receiving a funded account should be clear, with no long delays.

Choosing a prop firm shouldn’t be based on gut feeling or flashy marketing. Take the time to evaluate each criterion carefully. A well-informed decision from the start will help you reduce risk, maximize earnings, and build a long-term partnership with a trusted firm.

7. Best Prop Trading Platforms

When trading with a prop firm, the platform you use plays a critical role in your performance and experience. Each firm may support one or multiple platforms, but in general, they fall into two categories: shared platforms and proprietary platforms.

7.1. Shared Platforms

These are third-party platforms widely used by multiple prop firms. Their biggest advantage is accessibility, traders can easily get started and switch between firms without having to learn a new system.

1. MetaTrader 4 (MT4):

The most popular platform among prop traders, MT4 features a familiar interface, fast execution, and full support for Expert Advisors (EAs). It's used by top firms like FTMO and The Funded Trader.

Key benefits:

• Widely supported by nearly all major prop firms
• Includes 30+ technical indicators, 23 charting tools, and customizable charts
• Enables automated trading via EAs, ideal for optimized strategies
• Supports copy trading for beginners who want to follow experienced traders

2. cTrader:

Designed for professional traders, cTrader offers a modern UI, advanced order types, copy trading, and automated strategy building via C# with cTrader Automate.

Key benefits:

• Sleek, beginner-friendly interface with powerful tools
• Offers Level II pricing and advanced order types
• Allows automated trading using C# (cTrader Automate)
• Supports copy trading and integration via Open API

7.2. Proprietary Platforms

Some major firms develop their own trading platforms to optimize trader experience and internal risk control. These platforms often include features like challenge progress tracking, trading behavior analytics, and real-time risk alerts.

However, the quality of these platforms varies. They often require time to learn and can’t be reused across firms.

Things to consider:

• Check for order execution speed and latency
• Confirm EA compatibility (many platforms don’t support it)
• If available, test with a demo account before going live

You can refer to the comparison table below to help choose the most suitable trading platform in the prop trading space:

In conclusion:

• If you prioritize familiarity and flexibility, MT4 is the best choice.
• If you need more advanced trading tools and powerful automation, cTrader is a better fit.

Meanwhile, if you plan to commit long-term to a specific firm, a proprietary platform can deliver an optimized experience, as long as you're ready to invest time learning it.

8. 5 hidden rules prop firms won’t tell you (but you need to know)

Even skilled traders can fail when joining a prop firm, not due to lack of ability, but because of hidden rules or unclear terms. Below are five common pitfalls that often lead to wasted fees or unexpected disqualifications, even when no obvious mistakes are made.

8.1. Max drawdown: Is it calculated by balance or equity?

Most firms apply a drawdown limit, but how they calculate it makes a big difference:

• Balance-based drawdown: The limit only applies to closed losses. If you're running a losing trade but haven't closed it, it doesn’t count against you yet. This is more lenient and suits swing traders who hold trades longer.
• Equity-based drawdown: Losses are counted in real time, even if the trade is still open. If the market temporarily moves against you and equity drops to the limit, you’re disqualified instantly, even if it later recovers.

If you're unaware of which method the firm uses, placing large trades or holding overnight positions can unexpectedly cost you the challenge, even with an overall winning strategy.

8.2. Minimum trading day requirement

Some traders hit the profit target within the first few days and plan to stop trading to lock in profits. However, many firms require a minimum number of trading days, usually between 5 to 10, regardless of whether the target has already been reached.

This forces traders to continue “just to meet the quota,” which increases the risk of unnecessary trades that may trigger a drawdown or disqualification.

Always check the firm’s day requirement before starting and plan your trades accordingly, so you don’t end up “forced to trade” even when your goal is already met.

8.3. High leverage during the challenge, reduced after funding

A common tactic used by some prop firms is to offer high leverage during the challenge to attract traders. But once you pass and move to the live account, the leverage is often significantly reduced, sometimes to as low as 1:10 or 1:20.

This change can make your challenge-tested strategy ineffective. For traders using scalping or news-based strategies, the drop in leverage can completely distort their risk-reward ratios.

That’s why it’s crucial to compare the specs of the challenge account and the funded account before signing up.

8.4. Consistency rule in profit generation

Some firms don’t just require you to hit your profit target, they also want the profits to be distributed consistently across trades. For example, no single trade should account for more than 30–50% of your total gains.

Let’s say you made $5,000 in profit, but most of it came from one large trade. The firm may deem you "inconsistent" and reject your funding, even though you met all other criteria.

The goal is to discourage gambling behavior or going “all in” on a single trade. But if this rule isn’t clearly disclosed upfront, it can feel unfair and cause frustration.

8.5. Slippage and unusually high trading costs

Execution conditions and hidden fees often go unnoticed but can heavily impact your bottom line.

Some firms work with low-quality brokers, leading to severe slippage, especially during news events or high-volatility periods. Others impose above-average commissions, which quietly eat into your profits even if you trade correctly.

If you don’t review broker conditions and trading costs ahead of time, you may find yourself in a situation where you’re “right on the trade but wrong on the payout.”

These hidden rules aren’t necessarily bad, but they must be disclosed transparently. A trustworthy prop firm will never hide important conditions. On the contrary, they’ll help you understand and prepare for them.

That’s why it’s essential to read the rulebook carefully, look for community reviews, and clarify every condition before you begin.

9. How to start trading in a prop challenge

Starting with a prop firm isn’t just about signing up and paying a fee. You need solid preparation in knowledge, strategy, and mindset. Here are the basic steps to begin your journey the right way:

1. Choose the right firm: Compare challenge models (1-phase, 2-phase, instant funding), fees, profit splits, and trading rules to select the firm that best fits your trading style.
2. Register and pay the evaluation fee: Once you've picked a firm, you'll pay a fee to enter their evaluation, typically via a simulated account to test your trading skills.
3. Trade by the rules: Strictly follow the firm’s guidelines: respect drawdown limits, minimum trading days, profit targets, and avoid even the smallest rule violations.
4. Pass the challenge: Meet all the requirements set by the firm to qualify for a live funded trading account.
5. Become a funded trader: From this point on, you'll trade with the firm’s capital and receive payouts on a regular basis based on the agreed profit split.

Important note: Risk management is critical, avoid excessive leverage, stay emotionally balanced, and stick to your trading plan. Success doesn’t come from one lucky trade, but from long-term consistency.

Trading with a prop firm is an exciting opportunity for traders to access large capital, reduce personal risk, and unlock greater earning potential. But success in this model requires a deep understanding of how different firms operate, the types of evaluations they offer, and the hidden rules that can impact your results.

Most importantly, evaluate your skills, clarify your goals, and choose a firm based on transparency, credibility, and effective support.

To dive deeper into specific prop firms, their strengths, weaknesses, and payout policies, check out the detailed reviews at H2T Funding, a neutral platform that helps traders choose the right firm for the right goal.