Easy
What is Prop Firm? All about the prop firms, their operation and how to integrate them for the crypto trading
A Prop Firm (Proprietary Trading Firm) is a company that offers traders to use its capital to trading financial markets such as Forex, actions, cryptocurrencies or raw materials . This model, also called owner trading , is increasingly attracting beginners and independent traders who wish to embark on trading without risking their own money. Discover here everything you need to know about the Prop Firms , their operation, the advantages and disadvantages , and how to join a Prop Firm for trading cryptocurrency market .
Table of contents
Prop Firm: definition and principle
A Prop Firm is a company specializing in prop trading or trading for own account . It provides a trading account and allows traders to make trading decisions on the financial markets with its capital. The trader keeps a share of the benefits generated (often 70 to 90 %), while the Prop Firm keeps the rest. This model helps traders to access trading funds , while limiting their exposure to losses .
- The trader does not risk his own money: he uses the capital of the Prop Firm .
- Each Prop Firm imposes trading rules , to be respected to keep the trading account .
- Profits are shared according to a contract defined in advance.
In the world of trading , the Prop Firms have become essential for traders who wish to live trading without initial capital. Prop Firms also offer supervision, sometimes advanced tools and a trading environment .
How does a Prop Firm work?
The functioning of a Prop Firm is based on the selection of traders via challenges and tests :
- To join a Prop Firm , you have to pass the challenges : an evaluation phase on a demo or real trading account
- The goal: to prove your trading skills by achieving an objective of gains without exceeding the limits of losses imposed by the Prop Firm .
- If the trader succeeds, he obtains a funded trading account trading on the financial markets with the capital of the company.
- The profits are then shared according to the contract.
The Prop Firms set up trading rules : objective of gains, maximum drawdown, minimum number of trading days , risk management and sometimes restrictions on certain assets or schedules. Each Prop Firm has its own requirements and it is important to understand them well before committing.
The steps to integrate a prop firm
- Choose a Prop Firm adapted to your profile, by consulting the detailed reviews and conditions.
- Register and pay the registration fees to access the challenge or the test .
- Respect the trading rules loss limits , number of trading days , etc.).
- In the event of success, access a funded trading account trader with a Prop Firm on the proposed trading platforms .
- Share the profits according to the contract.
What are the advantages and disadvantages of prop Firms?
The advantages
- Access to a trading fund without personal capital.
- Sharing profits for traders .
- Supervision, advanced tools and sometimes mentoring to progress in trading .
- Possibility of living trading even without equity.
- Professional environment and access to quality trading platforms
The disadvantages of the Prop Firms
- The Prop Firms are paid : you must pay the registration fees to pass the challenges and the tests .
- Strict conditions: high gains objectives, loss , rigorous risk management.
- Low success rate: less than 5 % of traders manage to obtain a funded trading account
- Risk of falling on an unregulated or unreliable prop Firm the opinions and comparing the best prop Firms ).
- Strong psychological pressure, as an error can lead to the loss of the funded account or exclusion.
The advantages and disadvantages vary according to the function of the prop Firms and their economic model. The best Prop Firm will be the one that corresponds to your profile and your goals.
What are the conditions imposed by the Prop Firms?
Prop Firms impose strict rules to protect their capital and guarantee the quality of traders :
- Objective of earnings to be achieved (often 5 to 10 % of capital).
- Limit of losses (Drawdown).
- Minimum number of trading days to validate performance.
- Respect for trading rules (risk management, lever effect, prohibition of certain practices such as copy trading or trading on news).
- Respect for trading conditions specific to each market (stocks, cryptocurrencies , forex or indices, raw materials ).
The Prop Firms apply a commission on profits (split profit) and sometimes costs for premium withdrawals or services.
Prop Firm Crypto: How does it work?
In the universe of cryptocurrencies , a Prop Firm allows trading on bitcoin, eTH or other tokens without using your own capital. The Prop Firms offer challenges to trading skills on crypto pairs, often with high volatility, while respecting company's trading rules
- Access to partners or owners trading platforms
- Sharing of profits generated in stablecoin s, crypto or fiat.
- Risk management conditions adapted to the volatility of cryptos .
Prop trading crypto attracts traders who want to take advantage of the liquidity and volatility of cryptocurrencies without risking their own money. A Prop Firm can be a solution for traders as well as for beginners .
Where to take long and short positions on cryptocurrencies?
Before registering with a Prop Firm. It is strongly advised to improve your traidng methods.
To do long trading or shorts on cryptocurrencies, we especially recommend decentralized trading platforms
- Drift : platform on Solana , low fees, fast execution, more than 50 pairs of cryptos. Connect your wallet, place USDC USDC choose your pair and open a long or short position with lever effect (up to 10x or more). Prediction market, performance vaults, decentralized management of positions.
- dYdX : Dex on Cosmos, more than 200 perpetual markets, lever effect up to 50x, decentralized order book, security via independent validators. Total control over funds via your portfolio.
To learn how to use a decentralized wallet, we offer our free guide, step by step, supporting screenshots.
What you will learn:
✔ Master a decentralized portfolio ( DEFI ) - Learn to manage your assets without intermediary and to interact directly with the blockchain.
✔ Perform transactions via a decentralized wallet - a practical guide to exchange cryptos independently.
✔ Explore decentralized finance ( DEFI ) - Discover advanced concepts such as staking and NFT , and optimize your investment strategies.
📥 Download the guide freely by filling out the form below:
What are the markets accessible via a Prop Firm?
- Cryptocurrencies (Bitcoin, ETH, A LTC ltc ...)
- Forex or currencies
- Stock market indices
- Actions
- Raw materials
Each Prop Firm trading universe , with trading conditions adapted to each market. Traders must choose their Prop Firm according to their trading strategy and expertise.
The trading strategy and the expertise of traders play a decisive role in the choice of a Prop Firm, because each company imposes rules, markets and tools adapted to specific profiles. For example, a trader specializing in scalping on cryptocurrencies will favor a prop Firm that authorizes this type of strategy, offers a flexible lever effect and allows trading on reactive platforms with low costs.
Conversely, a Swing Trading oriented trader on raw materials or the Forex will seek a Prop Firm offering access to these markets, suitable position conditions and risk management compatible with longer horizons.
The use of expert advisors or automated strategies is also a criterion: certain prop Firms accept these tools, others not, which directly impacts the choice according to the technical expertise of the trader.
Finally, the level of experience influences risk tolerance: a beginner will often opt for a Prop Firm with educational support and less strict rules, while a confirmed trader will seek a structure offering more capital and greater freedom in the management of its positions.
What are the criteria for choosing your Prop Firm?
- Reputation and user reviews
- Transparency of the rules and trading conditions .
- Sharing of profits proposed.
- Amount of registration fees and any commissions.
- Diversity of accessible markets and instruments.
- Speed of payments and clarity of withdrawal conditions.
- Tools, support and support offered.
The best Prop Firms offer a transparent framework, clear rules and a sharing of profits , while ensuring the safety of funds and the reliability of platforms .
What are the risks and disadvantages of prop Firms?
- Very low challenges success rate
- Sometimes criticized model: losers ' registration fees
- Risk of losses so non-compliance with the rules.
- Risk of unregulated Prop Firm
- Significant psychological pressure.
It is crucial to compare the best Prop Firm , to read the conditions well and to favor recognized societies to avoid unpleasant surprises.
How to succeed in the challenge of a Prop Firm?
- Master a trading strategy adapted to the rules of the Prop Firm .
- loss limits and the drawdown.
- Favor regularity over the duration of trading days .
- Read all the rules and conditions carefully.
The most efficient traders are those who combine discipline, risk management and adaptation to markets. Successful challenge requires rigor and patience.
Conclusion: Prop Firm, a springboard for Crypto traders?
Understanding what a Prop Firm is to seize a unique opportunity to trading on the financial markets without initial capital. Working with a Prop Firm can be a springboard to live trading and progress in this world. Nevertheless, it is obviously advisable to choose a reliable company and to respect all the rules imposed by the Prop Firms . For motivated traders trader with a Prop Firm allows access to trading funds , share the profits generated and to professionalize in trading activity on cryptocurrencies and other markets.
Investments in cryptocurrencies are risky. Crypternon could not be held responsible, directly or indirectly, for any damage or loss caused following the use of a property or service put forward in this article. Readers must do their own research before undertaking any action and investing only within the limits of their financial capacities. Past performance does not guarantee future results. This article does not constitute an investment .
Certain links of this article are sponsorship links, which means that if you buy a product or you register via these links, we will collect a commission on the part of the sponsored company. These commissions do not train any additional cost for you as a user and certain sponsorships allow you to access promotions.
AMF recommendations. There is no guaranteed high yield, a product with high performance potential implies a high risk. This risk taking must be in line with your project, your investment horizon and your ability to lose part of this savings. Do not invest if you are not ready to lose all or part of your capital.
All our articles are subject to a rigorous verification of the facts. Each key information is verified manually from reliable and recognized sources. When we cite a source, the link is systematically integrated into the text and highlighted by a different color, in order to guarantee transparency and allow the reader to consult the original documents directly.
To go further, read our pages legal notices , privacy policy and general conditions of use .
Noah
Training engineer, I quickly became interested in the field of finance. Convinced that decentralized finance has a bright future ahead of it, I participate in its democratization by developing Crypternon.
