10 Things to Look out For when Choosing a Prop Firm


Are You Planning on Becoming the Next-Gen Multi-Millionaire from Trading Forex? Then you have to get your prop firm choice right! This post contains 10 things you need to consider in choosing a prop firm.


How to Choose Prop Firm
How to Choose Prop Firm in 2022

Your success or failure as a prop trader depends heavily on the prop firm you trade for. Since that isn’t something you can find in textbooks, and with virtually all prop firms making self acclamation of being the best, choosing a right prop firm can be quite an arduous task. That is why this post is custom made for you.

I have carefully selected 10 things to consider in choosing a prop firm if you indeed want to hit it big. Let’s go:

Wondering what Prop Trading is? Click here:

1. Traders Review

The first thing you want to check out regarding a prop firm is their trader reviews which is simply the verdict and testimony of traders who have had first-hand trading experience with them.

While prop firms often promise heaven on earth on their media channels including their official website, blog and youtube channels, their trader reviews either reveals the genuineness of their enticing offers or expose them for the sham that they are. This is because they have little or no influence on what these traders have to say.

Hence, before you dabble into trading with a prop firm, it is vital that you learn from the experiences of those that have tested the waters.

So, where do I get to read traders review you ask? Right below!


  • Via Independent customer review websites:

There are certain websites created exclusive for this course to give accommodate real-life experiences of traders and expose scam companies especially nowadays that the rate of swindling has increased. These websites are independent and free from any sort of manipulations.

Two most used websites in this category are Trustpilot and Forexpeacearmy. You can click on either, and input the name of the prop firm you seek in their search boxes to access the customer reviews.

  • Via reputable blogs:

This is a little tricky due to the fact that scam prop firms pay bloggers to write good reviews about them. However, there are reputable blogs that give objective reviews and critically analyze prop firms’ policies and packages. One of such blogs is this: monbustech.com and you can check out my objective reviews on several prop firms by using the link below:

READ: Prop Firm Reviews

  • Via reputable youtube channels:

This medium allows you visual aids as these youtubers share their screens, and other illustrations that you blogs may not provide.

It’s just that even some of these youtubers get paid by prop firms for them to put up good contents about them. Hence, review websites like Trustpilot still remain the best bet.

If a prop firm passes this review test then we can go to the next. Shall we?

2. Funding Program: Evaluation Challenge or Instant Funding?

Having considered the review, the next fundamental thing to examine is their funding program. In other words, what the prop company requires of you for you to get funded.

Generally speaking, funding programs in the prop industry can be categorized into two: The Evaluation Challenge and The Instant Funding Option.

The Evaluation Challenge simply explained is a carefully developed trading assessment that traders must pass within a stipulated period of time before being deemed worthy of funds by the prop company. This allows amateur traders to learn on the job and gradually gain understanding of forex trading. This is the major intention of the challenge.

For exclusive details about the evaluation challenge, its meaning, essence, intricacies and lots more, click the link below:

READ: Prop Firm Evaluation Challenge Explained: The Meaning, Essence, Intricacies, Advantages and Disadvantages

The Instant Funding option on the other hand grants traders the handsome privilege of being funded right away and commence profitable trading without any wait or delay. It is important to note however, that the instant funding option suits pro-traders more as their trading experiences and knowledge would help them hit the ground running. Amateur traders may need to reconsider the evaluation challenge.

The Instant Funding option isn’t as common as The Evaluation Challenge. Hence, several prop firms do not employ it as part of their policies. However, you can click the link below for viable prop firms that grant instant funding:

READ: No Evaluation Prop Firms

So which kind of program do you wish to be on? Be clearly defined in your decision and seek prop firms that offer such.

If you intend going for the evaluation challenge, then the next point is especially for you.

3. How Easy or Difficult Is It to Pass the Evaluation Challenge?

Before delving deep into your decision to undergo the evaluation challenge, it is important to carefully examine and understand the challenge rules and stipulations as this is crucial to your success or failure on the challenge.

Usually, evaluation challenges are in two phases: Phase 1 and 2. For more information on The Evaluation Challenge Phases, you may need to refer to my post on The Evaluation Challenge by using the link below:

READ: Prop Firm Evaluation Challenge Explained: The Meaning, Essence, Intricacies, Advantages and Disadvantages

So what things should you look out for in the evaluation challenge stipulations?


  • Profit Target:

This is the amount of profit you must make before you are translated from Phase 1 of the challenge to Phase 2, and from Phase 2 to a live account.

Usually, the profit target in Phase 1 is 10% and 5% for Phase 2

  • The drawdown limits:

This refers to the maximal amount of loss that a trader could incur before their account get terminated. In most cases, there are two drawdown limits: the daily drawdown limit which is usually set at 5% and the overall drawdown limit which is usually set at 10%.

Once the overall drawdown limit is matched, a trader’s account is terminated.

  • Minimum and Maximum Day Limit:

This entails the number of days a trader is allowed to meet the stipulated targets. While some prop firms mandatorily want traders to spend 30 and 60 days on Phase 1&2 respectively, other prop firms are not rigid.

Summarily, it is expedient to be on the lookout for those three things in the evaluation challenge of whichever prop firm you choose. Be especially wary if they deviate from the statusquo by demanding for more profit % or less drawdown limits and days required.

This next point is for both instant funding and evaluation challenge traders.

4. Subscription Plan: Account Sizes and Pricing

As fantastic as the reviews and funding programs of a prop firm may be, it is mandatory you examine their subscription fee and policy and be sure that it suits the size of your pocket.

Account sizes and Pricing are major areas where prop firms engage in fierce battles, and you can be sure that there are available account sizes at friendly prices that suit your pocket size regardless of your financial power. As a matter of fact, you can purchase a $10,000 instant funding account with just $99 with Blufx.

You can click the link below to check out the profiles of several prop firms and their pricing:

EXCLUSIVE: Prop Firms Profiles and Pricing  

5. Consider Their Trading Conditions and Rules

While the account sizes and the pricing may be attractive, the trading conditions and rules should be of greater concern else you get entrapped in what you will not be able to effectively manage and sustain. Few of the things to look out for in the tradition conditions and rules; whether or not the prop firm allows:

  • the use of CopyTraders and EAs. Expert advisors (EAs) are basically automated programs that buy and sell for you. And many forex traders make use of them in one form or another. For more information about what Copytraders and EAs are, click here
  • night trading,
  • weekend trading,
  • news trading;
  • The maximum drawdown limits
  • Minimum number of times to trade per week
  • Trading lots, leverages and position

6. Profit Split Percent

If a prop firm offers you all of the aforementioned, the next thing to consider is their trader’s share of the profit made – their profit split percentage. Remember that the main essence of prop trading is to make money and earn big from your tradings.

Here are the popular profit split percentages in the industry: 50:50; 60:40; 70:30; 80:20; 90:10

For a comprehensive list of the profit percentage offered by several prop firms, click the link below:

READ: Prop Firm Payouts

7. Scaling(growth) Plan

Scaling plan refers to the growth opportunities granted to the traders to trade larger account sizes and earn more profit. This is a means through which profitable traders are compensated.

In other words, while traders may not be able to afford the subscription fee for larger accounts, they get another shot at it through the scaling plan, even though it takes time.

The standard scaling requirement for most firms is that traders trade profitably at 10% for 2 out out 3 months. However, tons of prop firms have deviated from this policy. Hence, it is highly recommended that you take due diligence to read, understand and be confident that the firm has a feasible scaling plan.

So make sure whichever firm you’re working with has room for growth.

8. Withdrawal Duration and Rules

You’ll also need to know how often you will get paid. Is it once a month, twice a month, weekly and so forth? This is an important thing to look out for. Remember prop trading is all about the money, but just that, the frequency at which the money will be coming in is a matter of huge relevance too. 

9. Trading Platform

Endeavour the prop firm you are choosing uses a trading platform you are familiar with, and that the trading platform is compatible with your trading devices. MT4 and MT5 are two popular trading platforms and they are supported by most devices. 

So beware of firms that offer their own trading platform. Chances are there’s a lot of room for manipulation. You have to know that in every business there are always people looking to take advantage, just make sure they’re not taking advantage of you.

10. Education and Support

Education and Support are traders-central policies that most prop firms operate. While they educate their traders via insightful blog posts, market analysis and video interviews with successful traders, they offer support which is a customer-care service rendered to traders to assist them with any challenges they are encountering.

These are two vital things to watch out for in choosing a prop firm. You need a prop firm that will consistently provide you with vital information that will be crucial to your trading success, and one that readily helps when you encounter issues. These are some things to keep an out for when go through through a prop firm’s trader review.

In conclusion, how do you pick the right prop firm? Consider those 10 things mentioned above and you can be sure to make the right choice.

Good luck and happy trading.