Prop Firm
Definition
A prop firm (proprietary trading firm) provides traders with company capital to trade in exchange for a share of the profits. Traders typically pass an evaluation to prove their skills before receiving a funded account.
Modern online prop firms have democratized access to trading capital. Instead of requiring traders to deposit large sums, firms charge an evaluation fee ($100-$1,000+) and provide simulated or real capital accounts ranging from $10,000 to $400,000+. If a trader passes the evaluation by hitting profit targets while respecting risk limits, they receive a funded account.
The prop firm model works because firms earn revenue from evaluation fees (since most traders don't pass) and take a percentage of profitable traders' gains. For traders, it eliminates the need for large personal capital while providing access to significant buying power.
Major prop firms include FTMO, Topstep, Apex Trader Funding, FundedNext, The5ers, and MyFundedFX. Each has different rules, pricing, and profit splits. PropJournal supports all major prop firms with customized compliance tracking for each firm's specific rules.
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