How to Choose a Prop Firm

Notes

14 sections · 1928 words

1Company reputation and history

The first thing worth studyingis who is behind the Prop Firm and how long the company has been on the market.

A company's age alone guarantees nothing. A young Prop Firm isn't necessarily bad, and a long history is no guarantee of no problems. But the more history a company has accumulated, the more information you can study before making a decision. What to check?

•When the company started operating
•Is there clear information about the company
•How transparent its rules are
•Have the working conditions changed significantly
•Have there been public conflicts with traders
•Have there been mass complaints about payouts or bans
•How the company responded to problems

What to pay special attention to? Not only the fact that a problem occurred. In a large company, disputes are practically inevitable. Much more interesting:

How does the company behave once a problem has already occurred? Does it ignore it or explain the situation? Does it resolve traders' requests? Does it publicly announce changes? This gives more information than just the number of negative comments.

2Prop Firm rankings

A ranking helps you quickly get an overall picture of a company, but it shouldn't be the only selection criterion. For example:

Prop Firm A4.8/5

Prop Firm B4.4/5

This doesn't yet mean that the first one is automatically better for you. Look deeper:

•what the score is made up of;
•how many reviews the company has;
•which problems are mentioned most often;
•how recent the reviews are;
•whether the same complaints repeat;
•whether the company responds to requests.

The main rule:

A rankingis a starting point for checking, not a ready answer to “buy or not buy”.

On PropMarketCap, the ranking exists precisely to help you start analyzing a company faster.

3Trader reviews

Reviews let you see what sometimes can't be understood from the official rules alone. For example, users' experience with:

•payouts;
•support;
•verification;
•account bans;
•trade execution;
•rule interpretation.

But reviews also need to be read correctly. Don't look only at the average score

A company may have thousands of positive reviews and a few negative ones. One negative review doesn't yet mean a systemic problem. Recurring situations are much more interesting. For example, if different users independently and regularly report the same problem, it is worth looking into in more detail.

When reading reviews, check:

•What exactly is the trader writing about?
•Is the situation described?
•Does this problem recur?
•How recent is the review?
•Did the company respond?
•How did the situation end?

Important

Reviewsare an additional source of information, not absolute proof of a company's reliability or unreliability.

4Payout history and reliability

One of the main reasons to use a Prop Firmis the chance to reach a Payout, that is, to receive the reward you've earned.

So before buying a Challenge, it's worth studying other traders' experience with payouts. What to check?

•Are there confirmed payouts
•Are there regular complaints about delays
•Are there cases of payout refusal
•For what reasons the company refused
•How clearly the Payout rules are written
•When the first payout is available
•How often subsequent payouts can be received
•What additional checks a trader may go through

An important point

A payout refusal alone doesn't prove a problem on the Prop Firm's side. The trader may really have broken the rules. So you need to look at the context of the situation and the reason for the refusal, not just the headline:

“THE PROP FIRM DIDN'T PAY ME $10,000”.

5Trading platform and available markets

Now we move from the company's reliability to the trading itself. Trading platform

Trading platformthe program through which the trader opens and closes trades, sets Stop Loss and Take Profit and manages their positions.

For example:

•MetaTrader;
•cTrader;
•Tradovate;
•other platforms.

If you have never used the available platform before, it's advisable to get familiar with it before starting the Challenge. Why? Because a technical mistake can cost you the account. For example:

MistakePossible consequenceEntered the wrong position sizeOpened a much larger volumeSet the Stop Loss incorrectlyTook a bigger loss than plannedDidn't notice an open positionThe trade kept affecting EquitySet the Take Profit incorrectlyThe trade closed not according to your plan

What to check?

•Which platforms are available?
•Are you familiar with them?
•Can you test the platform in advance?

Available markets

Not every Prop Firm offers the same set of trading instruments. Check whether the markets your strategy works on are available:

•Forex;
•Crypto;
•Futures;
•indices;
•commodities;
•stocks;
•other instruments.

If you trade mostly crypto, there's no point choosing a Challenge that is good on other parameters but poorly suited to your main trading.

6Fees and trading conditions

Now you need to understand how much making trades actually costs you. Here a beginner needs two concepts explained.

Spreadspread

Spreadthe difference between an instrument's buy and sell price.

In simple terms, it is one of the trading costs a trader incurs when opening a position. For strategies with many short trades, the spread size can matter especially.

Trading Commissiontrading commission

Some programs additionally charge a commission for executing trades. Its size and calculation method depend on the market, platform and specific Prop Firm. So we compare:

•Spreads
•Commissions
•Execution conditions
•Available instruments
•Other trading costs

Important

You can't simply say:

“The lower the commissionthe better the Prop Firm”.

What matters to a trader is the full set of conditions. For example, for a scalper trading costs may be one of the main criteria. For a trader who makes a few trades a month, their impact may be much smaller.

7Support and disputes

While everything works well, support seems unimportant. Its value becomes clear when there is:

•a technical problem;
•a question about the rules;
•an account ban;
•a payout delay;
•a disputed trade;
•a verification problem.

How to evaluate support?

•What contact methods are available?
•How clearly does the company answer questions?
•Is there a separate procedure for disputes?
•What do other traders write about the support?
•How did the company resolve public conflicts?

You can even write to support before buying and ask a specific question about the Challenge you're interested in. The quality of the answer will already give you some idea of how the company works. PropMarketCap Protection

For PropMarketCap Membership holders, help with disputes involving Prop Firms is a separate privilege. If a dispute arises between a trader and a partner Prop Firm, PropMarketCap can help sort out the circumstances and the communication with the company.

However, having such help doesn't mean the dispute is guaranteed to be resolved in the trader's favor.

8Restricted countries

This needs to be checked before paying for a Challenge. Some Prop Firms don't provide services to users from certain countries or regions. The reasons may vary:

•legal restrictions;
•sanctions requirements;
•payment system rules;
•the company's own policy.

Restricted Countries

Restricted Countriescountries or territories whose residents the Prop Firm restricts from accessing its products.

Before buying, check:

•Does the company work with your country?
•Can you pass verification?
•Are payment methods available?
•Are payouts available?
•Are there additional regional restrictions?

This information can also be taken into account when choosing a company through PropMarketCap.

9How to compare several Prop Firms

Now let's put it all into one system. Imagine you liked three companies. Don't try to pick a winner based on one characteristic. Use this sequence:

STEP 1. Availability

Does the Prop Firm work with my country? No → exclude it. Yes → move on. STEP 2. Reputation

We check:

history → ranking → reviews → disputes. STEP 3. Payouts

We check:

Profit Split → first payout → frequency → restrictions → Payout reviews. STEP 4. Challenge

We use what we learned in the previous lesson:

Profit Target → Daily Drawdown → Maximum Drawdown → Consistency → restrictions. STEP 5. My strategy

Does the Prop Firm suit my particular trading? Markets → News Trading → Weekend Holding → EA → Copy Trading → other restrictions. STEP 6. Trading conditions

We compare:

platforms → spreads → commissions → available instruments. STEP 7. Price

And only now do we compare:

Challenge price → discount → promo code. So it goes:

First, does the company suit me → then, does the Challenge suit me → and only after that, how much it costs.

10Why the discount and price are not what matters most

This is especially important for PropMarketCap, because there are constantly promotions on the market:

−10%

−20%

−30%

Flash Sale

Promo codes

And a discount really can make a purchase more cost-effective. But:

A discount only matters when the Challenge itself suits you. A $300 discounted Challenge doesn't become a good choice just because it cost $400 yesterday. If its:

•Drawdown doesn't fit your risk model;
•rules prohibit your strategy;
•platform is inconvenient for you;

Funded Account conditions don't suit you —

you just bought an unsuitable product cheaper. Conversely, there's no point automatically choosing the most expensive Challenge in the hope that it will be better. The right sequence:

1Does the Prop Firm suit me?

2Do its rules suit me?

3Does the Challenge suit my strategy?

4And only then — where can I get the best purchase terms?

This is where a discount and a promo code truly become an advantage. CHECKLIST: HOW TO CHECK A PROP FIRM

Before choosing a company, ask yourself the following questions. COMPANY

☐ How long has it been operating?

☐ Is the information about it transparent enough?

☐ Have there been serious public problems? REPUTATION

☐ What is its rating?

☐ What do the negative reviews say?

☐ Do the same complaints repeat?

☐ How does the company respond to them? PAYOUTS

☐ Are there payout confirmations?

☐ Are there recurring Payout complaints?

☐ Are the payout rules clear? TRADING

☐ Is the market I need available?

☐ Does the trading platform suit me?

☐ What are the spreads and commissions?

☐ Is my strategy allowed? SUPPORT

☐ How can I get in touch?

☐ How quickly and clearly do they answer?

☐ How are disputes resolved? REGION

☐ Does the Prop Firm work with my country?

☐ Will I be able to pass verification and get a payout? CHALLENGE

☐ Do its rules suit me?

☐ Does the Drawdown suit me?

☐ Does the Profit Target suit me?

☐ Do the Funded Account rules suit me? AND ONLY AFTER THAT

☐ How much does the Challenge cost?

☐ Is there a discount?

☐ Is there a promo code? Key takeaway of the lesson

There is no Prop Firm that will be the best for every trader.

For one trader the priority isminimal trading costs.

Another needs to hold positions over the weekend. A third trades the news. A fourth needs a specific platform. For a fifth, a certain Drawdown model matters more. So the task is not to find:

“The best Prop Firm on the market”. But to find:

“The Prop Firm that suits my particular trading”. How PropMarketCap helps with this

Opening the websites of ten Prop Firms yourself and studying their Challenges, rules, markets, reviews and payout terms takes a long time and is inconvenient. This is exactly the problem PropMarketCap solves. On the platform you can study Prop Firms in a single format and compare their main conditions, ratings, available Challenges and other important information.

But PropMarketCap shouldn't make the decision for you.

Our jobis to give you the information and tools so you can make an informed choice yourself.

Lesson outline