Table of content
Forex prop firms allow traders to trade on their behalf using the firm’s capital and share profits. Lately, this financial trading sector has become immensely popular, as many traders see it as the possibility to trade large accounts without having to invest their money. While many reliable firms are operating in this space, there are scams and frauds as well, which makes it very critical to select the best Forex prop firm. Despite reliability, other considerations include funding options, tradable assets, fees, and many more. This is why it is crucial to select the right firm for you depending on your trading needs.
This page will focus on the best firms, their profitability, risks, fees, and the legitimacy of payment.
What Are Forex Prop Trading Firms?
Proprietary trading firms, sometimes also called prop firms for short, are companies or financial institutions that engage in trading activities on financial markets using their own capital. Financial markets on which prop firms operate are diverse such as Forex, futures, commodities, indices, stocks, cryptos, and more. These firms can be banks, hedge funds, or independent trading firms. In the context of Forex prop firms, they allow traders to engage in trading with the firm’s capital and share profits. The best prop firms for forex offer better conditions but operate using a similar business model as prop firms for other assets. Here is how it works:
Capital allocation
Forex prop firms allocate their capital to traders who are usually their employees or selected using some kind of challenge or evaluation method.
Traders use the firm’s allocated capital to trade on financial markets and share profits with the firm. The best funded forex prop firms usually offer very diverse funding options from as low as 1k to over a million dollars and enable traders to select their comfortable amount.
Recruitment and selection
Prop firms conduct a thorough evaluation process to ensure that traders can perform profitably on the financial markets. They may look for individuals with strong trading skills, strategies, and a proven track record.
Depending on the contract, traders can be employers of the firm, making salaries together with shared profits. Large prop firms usually have offices where traders can engage in financial trading activities. However, the vast majority of prop firms just fund traders’ accounts and share a considerable percentage of profits with them. Best forex prop firms typically share 75-80% of the profits with traders, further encouraging them to become better traders.
Risk Management
The best forex prop trading firms have strict risk management policies, reflected in trading rules and risk limitations. If the trader breaks one of these risk rules called hard breach rules, their funded account is terminated. This way, the prop firm limits financial damage from losses.
Funded account fees
Forex prop firms typically have a wide range of funding options, from 1,000 to millions of dollars. Traders can select any of these funded options, and they typically pay an evaluation fee. These fees can be one-time or monthly, depending on the prop firm’s policies. We will talk more about fees and industry-accepted standards to aid our readers in selecting the best firms in the below topics. We can think of funded account fees like extra insurance for prop firms to protect their capital and motivate traders to approach trading with more responsibility.
Should you trade with a Forex prop firm?
Selecting and trading with the best prop firms can be super beneficial for traders. In the list of reasons, probably the most important is to access a large trading capital for a short fee. On our platform, we have the best Forex prop trading firms rated and reviewed that can help with the selection process.
However, it is crucial to have a profitable and tested trading strategy to use all the advantages of prop firms. Below are some top reasons traders should opt for prop trading:
Access to Significant Capital:
Providing access to accounts with 100,000 USD and more, prop trading firms can be an especially attractive option for traders who lack a considerable budget for trading. This enables traders to make larger profits and make a living from trading activities.
Scaling Opportunities
Many firms offer scaling plans to increase the account size without paying an extra fee. To activate a scaling plan, traders need to hit predetermined profit targets, which vary depending on the firm. The commonly accepted profit target is around 10%. Scaling is very advantageous, as traders can start from the lowest funded account size and scale up to higher than the maximum funding option.
Risk Management:
The most critical way by which Forex prop firms protect their capital is to place strict risk limitations and trading restrictions. With strict rules and guidelines, prop firms ensure their capital is protected by the highest standards. This is also beneficial for traders as they learn strong risk management and discipline skills.
Professional Development
Trading with prop firms, traders have an opportunity to learn from experienced professionals as the majority of prop firms offer dedicated special trading courses and technical analysis services. Forex trading is a very practical matter, and learning from experienced traders is the best way to become a profitable trader. Large capital also allows traders to focus more on trading, as they can make a living and replace their salary.
Top Forex Prop Trading Firms
Here are the top forex prop firms according to our research methodology.
| Firm | Overall Score | Min instant funding | Max instant funding | Min instant funding fee | Profit share | Daily loss limit | Max loss limit | Action |
|---|---|---|---|---|---|---|---|---|
| Funded Trading Plus | 4.05 | 5,000 USD | 250,000 USD | 229 USD | 70-80% | 3-4% | 5-8% | Register |
| FTMO | 4.03 | 10,000 USD | 200,000 USD | 164 USD | 90% | 5% | 10% | Register |
| Lark Funding | 3.89 | 5,000 USD | 1,000,000 USD | 50 USD | 75-80% | 5% | 10% | Register |
| Audacity Capital | 3.67 | 10,000 USD | 480,000 USD | 129 USD | 50-85% | 10% | 10% | Register |
| Smart Prop Trader | 3.57 | 10,000 USD | 200,000 USD | 67 USD | 85% | 4% | 8% | Register |
Forex Prop Trading Firms Mini Reviews
Mini reviews of the best forex funding firms will offer a glance at some of the best prop firms. These reviews can be used as a reference for selecting the most suitable options according to the trader’s needs. We will also provide an overall score for each of the top firms. Generally, anything beyond 3.5 can be considered a decent firm and is highly likely to allow traders to withdraw profits without issues.
FTMO Mini Review – One of the best prop firms overall
| Safety | Funding and Capital Allocation | Assets | Rules and Limits | Fees | Platforms | Profit-sharing and withdrawals | Education | support |
|---|---|---|---|---|---|---|---|---|
| 5 | 3 | 4 | 4.8 | 2.5 | 5 | 5 | 5 | 3.6 |
Overall = 4.03
FTMO is a flagship prop firm attracting prop traders around the world with a strong track record in the industry. It offers two funded account types with different risk levels, allowing traders to select their preferred trading style. The firm allows profit withdrawal without fees and has low spreads and commissions.
Safety is a priority at FTMO as the firm has high ratings on the FPA (4.49) and Trustpilot. The firm has been around since 2015 giving it legitimacy. The minimum funding amount starts from 10,000 USD and the maximum is capped at 200,000 USD. For aggressive accounts, the highest funding is at 100,000 USD. Traders can access both MT4, MT5, and cTrader advanced trading platforms, giving traders extra flexibility.
The firm has no restrictions for holding positions over weekends and during the major economic news releases. Traders are allowed to trade at their own pace, with a minimum trading requirement of days during each cycle. The minimum audition fee starts from 164 USD for the 10k accounts. Allowed daily loss is 5%, profit target 10%, and maximum trailing drawdown 10%.
With a 90% profit split, FTMO is very advantageous for traders who want to make a living from trading. Available trading markets include Forex, indices, commodities, and cryptos.
Sign up with FTMO now
Funded Trading Plus – Low fees high reliability
| Safety | Funding and Capital Allocation | Assets | Rules and Limits | Fees | Platforms | Profit-sharing | Education | Support |
|---|---|---|---|---|---|---|---|---|
| 3 | 4 | 4 | 4 | 5 | 5 | 4 | 2 | 5 |
Overall = 4.05
Funded Trading Plus is one of the top prop forex trading firms as it offers diverse funding options, safety, and competitive fees. It was established in 2013, with funding options ranging from 5,000 USD to 250,00 USD with scaling plans up to 2.5 million USD.
Here is a brief summary of key features and ratings for Funded Trading Plus prop firm:
Safety-wise, the firm is solid despite lacking some features. The firm lacks reviews on the FPA (Forex Peace Army), but has a solid experience and reputation, offering trading services through a regulated broker, EightCap.
Funding and capital allocation are diverse at Funded Trading Plus. The firm offers three account types to appeal to all kinds of traders, low fees from 119 USD for 15k accounts, and low spreads. The tradable asset classes include Forex, commodities, indices, and cryptocurrencies. More than 70 FX pairs are offered, together with 16 indices, 8 commodities, and 200+ crypto pairs. Forex pairs offer spreads from 0 pips. The firm does not offer stock trading. Allowed daily loss limits are between 3-4% depending on the funded account type selected, and the profit target starts from 10% during evaluation and is 0% after the trader becomes funded. Maximum trailing drawdown varies between 5 and 8% and the profit split is 70-80%. Withdrawals are processed quickly, under 1-2 business days.
All the assets can be traded on MT4 and MT5 advanced trading platforms offered by EightCap. The firm is a solid choice for experienced traders but offers superior flexibility for beginners as well, with its competitive low additional fees to start small and gradually increase funded accounts using the scaling plan.
Sign up with Funded Trading Plus now
BuoyTrade – Diverse funded account options
| Safety | Funding and Capital Allocation | Assets | Rules and Limits | Fees | Platforms | Profit-sharing | Education | Support |
|---|---|---|---|---|---|---|---|---|
| 3 | 5 | 3 | 5 | 5 | 5 | 2 | 1.3 | 2.4 |
Overall = 4.22
BuoyTrade is a Singapore-based Forex prop firm that was launched in 2021, making it a relatively young company. Despite this, the firm has already accumulated a solid reputation for offering minimum funded amounts from 1,000 USD up to 1 million USD. BuoyTrade lacks reviews on the FPA because it is young, however has a 4.2 score on the Trustpilot. The firm has levels for funding amounts starting from 1,000 on level 1 and capping up to 1 million USD for level 10 accounts. There are occasional discounts on the audition fees, making the firm super attractive for traders. The firm currently offers Forex pairs, commodities, and indices, with plans to introduce cryptocurrency trading soon. Diverse funding options are supported by low audition fees of 78 USD, which enables traders with small budgets to access financial markets. What’s more exciting is the lack of daily loss limits and low-profit targets of 5%. The maximum trailing drawdown is 5% and the profit share starts from 50%. Profit share is divided into levels, depending on the trader’s account level it may increase up to 80%. The firm emphasizes a minimalistic approach to trading rules and limitations, which may be attractive for experienced traders. Spreads are low from 0 pips as the main partner broker is EightCap which offers attractive trading spreads on MT4, MT5 and WebTrader advanced platforms. Live chat support offers quick assistance in case traders need any help from the firm.
Sign up with Buoy Trade now
Instant Funding – A young and promising FX prop firm from the UK
| Safety | Funding and Capital Allocation | Assets | Rules and Limits | Fees | Platforms | Profit-sharing | Education | Support |
|---|---|---|---|---|---|---|---|---|
| 1.5 | 5 | 3.5 | 4.8 | 5 | 4.1 | 3 | 3 | 3.8 |
Overall = 4.11
Instant Funding is a UK-based Forex prop firm that was launched in 2023. It offers attractive trading conditions, flexible funding options ranging from 1,250 to 200,000 USD, and diverse account types. Three account types are Instant Funding, One-Phase, and Two-Phase. Any trader with any trading experience can freely select a suitable account. There is also a scaling plan, to increase maximum funding up to 1.25 million USD. There is no daily loss limit, the maximum drawdown is at 10%, and the profit share starts from 70% and increases to 90% through scaling. The firm has a wide range of trading assets including Forex, indices, commodities, and cryptos on the ThinkMarkets’ MT4 and MT5 advanced platforms. Despite being young, the firm seems very promising with its minimalistic approach to rules and low-profit targets of 0-3% depending on the account type and challenge phase.
Sign up with Instant Funding now
Assessing Profitability with Forex Prop Trading Firms
The potential for making a profit with top prop forex trading firms is very high if the trader has a well-tested trading strategy. Trading on the 100,000 USD account for just under a 1000 USD fee can make a huge difference in profitability. With just 5-6% monthly profits and 80% profit share, traders can expect to make somewhere 5-6,000 profits. After the 80% profit split, the withdrawal can hit around 4-4,800 USD per month. This is a serious income and traders have an opportunity to switch trading full time. However, reaching these profit targets monthly can be a challenging endeavor. Let’s discuss all the main factors that affect the profitability of a prop trader.
Trading strategy
The first and most important factor is having a well-tested trading strategy. Trading strategy is a list of all rules for entering, exiting, and managing risk for trading positions. Without a well-defined trading strategy that lists all the rules and details for opening and closing trading positions, profitability is impossible to achieve.
Depending on the trading strategy-specific risk-to-reward ratio and trading, the profitability can be drastically different for different traders and strategies.
Risk limits
Properly controlling risk is key to achieving profitability in the Foreign exchange market. Some trading strategies may have a higher risk acceptance which may be prohibited by the prop firm, reducing the potential performance of a trader. Strict risk limits may damage profitability, as some prop firms are known for offering near impossible-to-follow risk limitations. These limits can be a 2% daily loss limit and if the trader is a trend follower, the account will get terminated before profits can be made.
Win rate
Win rate means how many trades are profitable from 100 trades. If a trader uses a strategy with a 50% or less hit rate, it is difficult to end the day without breaking the daily loss limit. This is because for a 50% win rate strategy the probability of 3-4 consecutive losing trades is around 12% which is a very high probability. So, together with a well-tested trading strategy, it is also important to select a strategy with a certain win rate and risk-to-reward ratio to follow risk rules.
Profit share
After selecting the strategy that can make money while following the firm’s risk rules, profit share comes into the game. The firm might offer low fees and more tolerant risk limit rules, but if the profit share is 50% it would be less attractive as traders will have to pay half the profits back to the firm. The best prop firm for forex must be offering at least 75-80% profit share. Some firms offer a purchasable add-on to increase the profit share to even 90% which is very appealing for profitable traders.
Analyzing risks associated with Forex Prop Trading
There are several risks associated with trading on funded accounts. Apart from trader’s risks, there are risks for the prop firms as well.
Capital loss
Traders may incur substantial losses that have the potential to damage the firm’s financialperformance. This is why the majority of firms conduct a rigorous checking of that reader’s risk management and profitability before allowing them to trade on live accounts.
For traders, there is a risk of the prop firm having hidden rules that may result in account termination and subsequently losing the audition fee.
Hidden rules
Hidden rules are trading restrictions that are not clearly visible or explained on the firm’s website. These rules may be hard or soft breach rules. This is why the rating of the best prop firms can be used as an indicator of their safety. Firms in our top list have no hidden rules, eliminating the risk of unexpected account termination. Many fraud firms use hidden rules to collect fees from traders, and it is crucial to check our reviews to ensure that the firm is reliable. We usually indicate all the flaws and red flags for each firm. If our review says to stay away from the firm, then there is a significant risk of losing money with them.
Market risks
Traders are exposed to market risks whenever they open a trading position, with tight risk limits set by the prop firms it is easy to experience losses that break the firm’s hard rules.
Understanding Fees Involved in Forex Prop Trading
Diving deep into fees and how they affect trading costs is important before applying for a funded trading account. Commissions and spreads are the main fees for trading the financial markets and can make a huge difference in a trader’s profitability. Short-term trading strategies are especially susceptible to performance damage by trading fees.
Why commissions matter
There are two types of fees when trading on the funded account. The audition fees are commissions charged by the prop firm one-time or monthly for each funded account. Other commissions are related to trading and include spreads and trading commissions. If a trader breaks any hard breach rules such as daily loss limit or all-time drawdown limits their account is usually suspended, and they lose audition fees. Some firms have free repeat or discounts for re-applying for funded challenges, while others charge full audition fees.
What are industry standards?
Knowing the industry standards for risk rules and fees can be a great reference point for concluding if the prop firm is competitive. For traders, it is essential to select the best option with low fees and acceptable risk rules. The best trading rules and conditions are usually offered by the best Forex prop firms and are as follows:
- Daily risk limits – at least 5%
- Maximum drawdown – at least 8%
- Profit share – at least 80%
- Profit target – less than 10% (usually 5-6% or 0% on funded accounts)
Discounts matter
Popular firms have periodic discounts that can be used to start trading with the smallest fees. However, the majority of newly established Forex prop firms also use this tactic to attract customers. New companies are much riskier than reviewed and researched firms, as they lack experience and their legitimacy can not be easily checked. The lack of regulatory requirements for prop firms makes them risky for traders.
A quick guide to starting a successful prop trading career
Becoming a funded trader is not an easy task, as it requires considerable effort and discipline. Trading is not easy, but not impossible. So, several steps can greatly accelerate the rate of becoming a successful trader with enough income to switch to full-time day trading. Below are the exact steps that can be used by any beginner as a guide.
Step One: Trading strategy
The most important thing before trading is to have a trading strategy that has all the rules and steps listed. Without the exact trading strategy, it is super difficult to become a trader. Simply put, a trading strategy is a set of rules that a trader follows to execute trading operations consisting of opening, managing, and closing positions.
Step Two: Essential Skills and Knowledge
Before developing the trading strategy which is necessary to achieve success in this dynamic business environment, it is a must to learn all the basic concepts and topics about financial trading. What is Forex, who are market participants, how prices move, and many more together with the ability to analyze price charts and fundamental data will lay the groundwork for a successful trader. Here is what you need to know for developing a comprehensive trading strategy:
- What are foreign exchange markets and how do they work
- How to read price data, technical analysis, and fundamental analysis
- Discipline to put theoretical knowledge into a practical trading plan that you will strictly follow
- Back-testing and forward-testing of the trading strategy
- Strong risk management skills and trading psychology
Step Three: Choosing the Right Prop Trading Firm
After developing and testing the trading strategy, it is time to select the Forex prop firm from our list of the best Forex prop firms. When having a working trading strategy that has been tested on historical and live data on the demo account, it is necessary to select an FX prop trading firm that offers safety and minimalistic risk rules. Together with safety, low fees and achievable trading goals are necessary.
Step Five: Choosing the right funded account type
Depending on your level of trading experience, different funded account types may be suitable. For experienced traders, one-step evaluation and instant funding accounts are much better. For beginners, it is essential to select any account with low audition fees and at least one phase of the challenge where you can test your risk management skills and ensure you will be profitable on the live funded account.
Step Six: Risk management again!
Every Forex prop firm has stringent risk limit rules. Traders must not lose more than a certain percentage of the initial balance per day, usually, this is around 5%. Another important rule is maximum drawdown which is typically around 5-8% which means a trader can not lose more than the predetermined percentage on all their trades. Without following these rules, it is impossible to maintain the funded account. The only way to solve this challenge is to have a strategy with strong risk management rules.
FAQs about the Forex prop trading firms
Is forex prop trading risky?
Can you make a profit with forex prop trading?
Does forex prop trading have extra fees?
Are forex prop firms worth it?
