Prop Trading

Accelerating your trading career has never been easier. With prop trading, you can achieve exciting earnings even with a demo account and with minimal initial capital. All you need is determination and a basic understanding of how prop trading works. Fintokei, supported by the Purple Group, will take care of the rest.

What is prop trading?

the opportunity to trade on accounts with significant virtual capital if they demonstrate their skills and pass the trading challenge. They can then receive a portion of their profits directly into their bank account.

How does prop trading work?

Choose your trading program

Individual prop trading programs differ in various aspects such as the complexity of the evaluation phase (aka trading challenge), the entry fee amount, the account size, and the percentage of profit you can earn. However, it’s always demo trading.

Prove your trading skills

The trading challenge (evaluation phase) is the core concept of prop trading and every prop trading firm has one. Its length can vary between one or several rounds and you must be able to generate a certain profit with trading strategies of your choice. At the same time, you have to keep losses in check and make sure that the drawdown in your account does not exceed the tolerable limit.

Receive a Virtual Trading Account

After successfully completing the trading challenge, you will receive a trading account with virtual capital from the prop trading firm. Now comes the most exciting part—generating profits and withdrawing a portion of them into your bank account as a performance reward or the so-called payout.

Receiving Performance Rewards

Payouts are rewards for consistently profitable trading in your virtual account. Consistency means you must still manage drawdowns even while trading on your virtual trading account. Exceeding the drawdown limit will result in the account suspension. However, keep your drawdown in check, and the reward of having a portion of your profits paid into your bank account every 14 days is definitely worth it.

5 facts about prop trading

Low-Capital Requirement

Unlike standard broker trading, where you need a higher level of capital to open and fund an account, prop trading works differently. The only deposit required from you is a one-time fee to purchase the trading program.

Suitable for Novice Traders

While many of the prop trading programs are designed for more experienced traders, there are also versions for beginners. For example, our Fintokei StartTrader program.

Prop Trading = Demo Trading

Prop trading is essentially a form of demo trading. All trading occurs on demo accounts with virtual capital. However, it simulates a real market environment, including response times, slippage, and other aspects of actual trading.

The Rewards Are Real

Once you pass the evaluation phase and receive a virtual trading account, you can start earning rewards. In prop trading firms, this is known as a performance reward or payout. You always share your profits with the prop trading firm in a specified ratio. Depending on the program, this ratio can range from 50:50 to 95:5 (with you receiving the larger share). Even though this is demo trading, the profits are real.

Watch Out for Drawdown

Daily drawdown, or overall drawdown, is a crucial metric that every prop trader must monitor. If the drawdown on your account reaches a certain predefined threshold, it indicates non-compliance with the rules and can result in the suspension of your account. Which means the end of the game for you.