Well to majority of us traders we tend to view prop firms as the holy grail gateway of getting cash from very little fees we can be able to raise to buy these challenges so that the payouts can fund the live accounts to millions also serving us a massive lucrative way of financial freedom attainment.
As this may sound to be true its' also serves as a trap to those who aren't consistently in their trading behaviour and exert a proper risk management accompanied with discipline throughout their challenge and funded stages as one mistake can erase days of hard work.
Factors that include ..unlike the demos and live accounts where traders are less limited to lots per instrument..max leverage per account with some having exponential such as 1:1000 and drawdown isn't a factor for early account blown as much as 10% DD.Hence this poses a great deal to traders who are used to flexibility n back tested strategies that might work but not in strict rule based environment.
Prop firm is a riskier venture than funding your own live account because of the rules which seam simple on the outer surface but requires a traders understanding..plan and proper trade execution aligning with laid rules..since one mistake can lead to account termination whether you had previously passed the evaluation or when you are funded because their edge is when you blow your account.
On prop firm you want to know the types of challenges account sold and what rules are applied on each challenge before purchase;And these include
1.Is news trading allowed in the product you want to buy
2.Type of drawdown- is it balance -based or account based
3.Type of trading strategies that aren't allowed
4.Risk exposure on traded pairs like max lot to avoid being flagged or suspended by risk-management on the said program.
5.Type of scaling or percentage on the product to advance to being funded and how the prop firms handles that so you don't get locked out of your winnings by understanding the payment cycles and structure involved.
6.Max allocation you can have in overall accounts and whether EA are allowed and rebuy options incase you breach..AMONG OTHERS which are treated as soft breach that can be on be found on individual prop firms T&Cs
7You may as well compare the spreads and commission fees and trading platform available in those prop firms (only few have mt5 by 2025)
Prop firm are good for a disciplined traders who have low capital to inject but dedicated enough to follow their trading plan to be able to not just get a refund upon successful completion of evaluation step to being funded to being able to make withdrawals..
Feel free to ask for more insights and you can also direct message
ALSO for verified and regulated prop firm i use the links are on my bios.
and if this helped you then feel free to buy me a coffee link is on bio
cheers and lets have a pipful 2025
THE GOAL ISNT TO BEAT THE MARKET RATHER TRYING TO HAVE AN EDGE IN IT.