At a proprietary trading firm, traders can use a pool of money instead of their own to make more money. In these firms, traders usually get a piece of the profits they make from their trades. However, prop trading can be tough and comes with its own set of challenges. In this guide, Traders Union (TU) experts talked about the best proprietary trading firms in 2023. If you’re thinking about starting your prop trading career, they’ll give you some important info.
Understanding proprietary trading
Proprietary trading is when a financial firm or bank invests directly in the market to make money for itself, rather than making money by trading for clients and earning small fees. They trade various things like stocks, bonds, and currencies.
According to TU’s analysts, prop traders use strategies like merger arbitrage, index arbitrage, and more to try to make a lot of money. They have fancy software and lots of information to help them make smart choices.
Being a prop trader has perks, like learning from experienced traders, getting access to more money, and having no-risk accounts to practice with. But it can also be expensive and competitive, with high fees.
Top prop trading firms
Analysts at Traders Union have determined the best proprietary trading firms. They offer diverse options for traders seeking to start proprietary trading.
- Topstep – known for its innovative approach, it offers a funded account program with simulated futures accounts ranging from $150K to $300K. Traders can qualify within eight days by demonstrating consistent profitability, with flexible pricing starting at $165 per month.
- The 5%ers – they have a unique approach, requiring traders to complete their Level 1 Program with profit targets of 10% to 25%. Entry costs range from $275 to $875, with a 50/50 profit split.
- Earn2Trade – they offer three funded trading programs and a variety of trading platforms. Costs vary, with the Trader Career Path offering funded accounts without monthly fees. Traders earn 80% of profits.
- SurgeTrader – they provide a 75% profit split to funded traders with packages suitable for all skill levels. Audition fees range from $200 to $6,500, and they offer various tradable assets.
- FTMO – specializing in Forex trading, FTMO offers access to 44 currency pairs, cryptocurrencies, and more. Traders receive capital ranging from $10,000 to $400,000, with an 80/20 profit split. Larger accounts have a potential profit split of 90:10.
Selecting the right prop trading account for your needs
When seeking the right prop trading account, consider these factors with insights from TU’s experts:
- Reputation – check the firm’s industry reputation and history of profitability. Read trader reviews and look at Trustpilot scores.
- Available assets – look at the variety of assets offered, such as stocks, futures, and forex, to find the best fit for your trading skills and preferences.
- Fees – understand the fee structure, including any one-time evaluation fees, and ensure it aligns with your budget.
- Trading platform and style – ensure the firm offers a suitable trading platform, and check if their trading approach aligns with your own style.
- Client support – choose a firm with strong client support to assist with questions, software issues, and account-related matters.
Conclusion
Proprietary trading offers traders a unique opportunity to use pooled capital to earn profits. However, it comes with its own set of challenges and fees. Traders Union has highlighted the top proprietary trading firms for 2023, providing options for those considering a career in prop trading. It’s crucial to consider factors like reputation, available assets, fees, trading platform, and client support when selecting the right prop trading account. Proprietary trading can be rewarding, but choosing the right firm is essential for success.