Most people may have come across the term, ‘prop firms’, but may not understand what it really is. Knowing about the best prop firms, and understanding the impact they have in forex trading can be of great benefit to forex traders. It is on this premise that this article is published to provide you with detailed information on this subject matter.
This article will therefore provide a detailed explanation and also highlight some of the best prop firms in 2024. This will not only add to your knowledge, but will also serve to guide you in making a selection of the best prop firms, either for yourself, or when making recommendations to others.
What are Prop Firms?
Proprietary trading firms ( referred to as ‘prop firms’) are companies that provide skilled forex traders an opportunity to put their trading skills into use for the company. Prop firms basically give traders access to needed capital which they can use to trade the financial market, including forex, in exchange for a share of the profit made.
Besides forex trading, prop firms also provide capital to traders in other financial assets such as stocks, futures, currencies, commodities and derivatives.
Trading for prop firms differs from retail trading in terms of funds used for trading. Whereas retail traders use personal funds to trade, prop traders use the firm’s capital to trade. Furthermore, prop firms impose risk management rules such as daily loss limits or maximum drawdown in order to protect the capital.
List of Best Prop Firms in 2024
Haven given an overview of what they are, let’s now give a rundown of some of the best prop firms in 2024. They are given below:
- FTMO
- The5ers
- FundedNext
- Fidelcrest
- BluFx
- TopStepFx
FTMO
Ranked among the best prop firms in 2024, FTMO is very popular for different reasons. The reasons include its transparent nature as well as its strategies for comprehensive evaluation. Also, FTMO is a ‘go-to’ for a wide range of traders because of its consistency in delivering well-structured solutions to challenges and for the significant capital structure it offers. FTMO places a daily loss limit of up to 10% and a maximum drawdown of 20%, and uses a user-friendly evaluation system. Also, the firm provides its traders with high capital for trading and pays up to 90% of the share of profits made.
The 5ers
This is another highly rated company among the best prop firms in 2024. The 5ers is a company believed to focus more on consistency over profit targets. This implies that traders under this firm are not necessarily pressured by the firm to hit specific targets only. While hitting targets is also important for the company, they actually emphasize more on consistency and performance that facilitate effective risk management. The profit split ratio for this prop firm is 50/50 initially, but is amenable to upward review progressively. The 5ers emphasizes strict risk management with low drawdown thresholds, which is considered ideal for traders that are conservative.
FundedNext
Next up on our list of best prop firms in 2024 is FundedNext. This firm offers a wide range of different trading account types and uses a profit split ratio ranging to 60% and 90% for traders. They allow traders to choose between three one-step evaluations, three two-step evaluations and six account types.Traders on FundedNext are allowed to use cTrader, MT4 and MT5 trading platforms. Furthermore, this prop firm has a well structured challenge system that offers successful participants access to a trading capital reaching up to USD200,000. The traders are allowed to retain up to 95% of the profit generated from this.
Fidelcrest
Fidelcrest offers traders the option of choosing between two account types depending on their ability and preferences. Traders can choose either a standard account with low profit targets and higher drawdown limits, or an aggressive account with higher risks and higher rewards to complement. This prop firm allows a profit split ratio up to 90% for traders and a maximum drawdown of 20%. However, Fidelcrest also requires that traders complete a two-step challenge which is generally regarded as a fair and transparent practice.
BluFx
BluFx has a unique monthly subscription based model that allows traders access to instant funding without necessarily undergoing the challenging processes of evaluation. This model is ideal for traders who want straightforward access to capital for trading. The prop firm uses a profit split ratio of 50/50, and strictly applies daily and overall drawdown limits so as to maintain consistency.
TopStepFx
TopStepFx stands out among the best for its unique focus on support for traders. The firm uses a one-step evaluation structure, and rather focuses on discipline, risk management and consistency of traders. The profit split ratio used is 80/20, and can become progressive depending on the performance of traders. TopStepFx also offers traders a variety of educational support, coaching and feedback resources to help them improve their trading strategies. Truly, their commitment to the development of traders ranks them high among the best prop firms.
Each of the prop firms highlighted above have their unique areas where they excel. They also have some features that indicate a certain level of similarities in some of their operations. Overall, they have been able to establish themselves in one way or the other among the best prop firms. Looking at each of them and their specific features, one can easily make a selection depending on individual preference.
Frequently Asked Questions
Do prop firms pay you?
- Prop firms do pay their traders. However, the amount of money a trader gets depends on the trader’s performance and also, their terms of agreement.
Which prop firm has the lowest fees?
- The 5ers is believed to be the prop firm that charges the lowest fees. The lowest possible account tier offered by the 5ers starts at USD39 monthly.
Are prop firms legal in the US?
- Yes, they are legal in the US. It is however important to note that prop firms equally have their own risks and challenges.