Are you tired of trading with a small account that barely grows, no matter how good your strategy is?
Imagine trading with $20,000 or even $100,000 of someone else’s money, keeping most of the profits—without risking your own cash. That’s what joining a prop firm can do for you, and I’ll show you exactly how to get started.
In this guide, I’ll walk you through the step-by-step process to join a prop firm, share tips to pass their challenges, and point you to three trusted firms to consider.
What Is a Prop Firm?
A prop firm, or proprietary trading firm, gives traders money to trade markets like stocks, forex, or futures, splitting the profits with you—usually 50-90% in your favor. You don’t use your own cash. Instead, you pay a fee to take a test called a “challenge.” Pass it, and they fund you with their capital.
For example, a 5% gain on a $1,000 personal account is $50, but on a $100,000 prop firm account, it’s $5,000, and you might keep $4,000. It’s a way to scale your trading, but you need to follow their rules to succeed. Learn more about what a prop firm is here.
How to Join a Prop Firm: Step-by-Step Guide
Here’s how to join a prop firm and start trading with their money:
Step 1: Practice in a Demo Account
Before you join, make sure you can trade profitably. Use a demo account to practice your strategy until you can make 5% a month consistently—like $500 on a $10,000 account. This builds your skills and prepares you for the real-money pressure of a prop firm challenge.
Step 2: Choose the Right Prop Firm
Not all prop firms are the same—some focus on stocks, others on forex or futures. Pick one that matches what you trade. For example, I’m interested in stocks, so I’d choose Trade The Pool, which offers over 12,000 stocks. If you trade forex, The 5%ers might be better, or My Funded Futures for futures. Research their rules, fees, and reviews to find a trusted firm.
Step 3: Sign Up and Pay the Challenge Fee
Once you pick a firm, sign up on their website and pay a fee to enter their challenge. Fees range from $39 to $1,500, depending on the account size. For Trade The Pool’s Mini Swing program, it’s $195 for $3,000 buying power. This fee gets you a demo account to prove your skills.
Step 4: Pass the Challenge
The challenge tests if you can make profits while following rules. For Trade The Pool Mini Swing, you need to make $270 (9% profit) in 100 days, keep daily losses under $60 (2%), and total losses under $150 (5%). You also need at least 10 trades. Other firms might have different targets, like 10% profit in 30 days. If you fail, you pay the fee again to retry.
Step 5: Get Funded and Start Trading
Pass the challenge, and the firm gives you a live account with their money—like $3,000 buying power with Trade The Pool. You trade, keep 50-90% of profits (50% for Trade The Pool Mini), and they take the rest. Follow their rules, or you’ll lose the account—but your own money stays safe.
Step 6: Scale Your Account
If you trade well, many firms let you grow your account. With Trade The Pool, every 10% profit (e.g., $300 on $3,000) increases your buying power by 10% (to $3,300). Keep going, and you could trade much larger amounts over time.
5 Things Beginners Often Don’t Understand
Prop firms can be tricky. Here are five things new traders often miss:
- Strict Loss Limits: You can’t lose much—like $60 a day on Trade The Pool—or you’re paused, even after funding.
- Profit Isn’t Easy: Hitting $270 includes fees and slippage, where you might pay $50.10 instead of $50.
- Buying Power Isn’t Cash: $3,000 buying power means $1,500 to trade with leverage, not the full amount.
- Market Restrictions: Some firms limit you to stocks or futures—not everything works.
- Real Pressure: Trading their money feels harder than a demo, and stress can throw you off.
Tips to Pass a Prop Firm Challenge
- Start Small: Pick a smaller account—like Trade The Pool’s $195 Mini—to keep fees low while you learn.
- Stick to Your Strategy: Use the same plan that worked in your demo, like 2-3% gains per trade.
- Watch the Rules: Track daily losses (e.g., $60) and total drawdown (e.g., $150) to avoid failing.
- Trade Liquid Markets: For stocks, use big names like Apple to avoid slippage.
- Be Patient: You have time—100 days with Trade The Pool—so don’t rush.
Which Prop Firms Should You Join?
I’ve researched three trusted prop firms that work well for beginners. Trade The Pool is great for stock trading, The 5%ers for forex, and My Funded Futures for futures. Want to see how they stack up? Check out my comparison table on prop firms to pick the right one for you.
Final Thoughts
Joining a prop firm lets you trade with big money while keeping your risk low, but it takes practice and discipline. Follow these steps, start with a demo, and choose a firm that fits your trading style.
