Are "Prop Firms" Legit?

The forex market is a vast and complex animal, and it can be difficult for traders with low capital to compete with the whales. However, there are a number of prop firms that offer funding to traders who meet their trading criteria. This can be a great way for traders with low capital to start trading with a larger account size with the potential to cash out on more profits.

What is a Prop Firm?

A prop firm, or proprietary trading firm, is a company that provides funding to traders who meet their trading criteria. The prop firm will then take a percentage of the trader's profits, typically 15-20%. Every prop firm is different, but usually the incentive is there to keep the competition strong amongst other firms. The business model for a prop firm is simple. The trader pays an initiation fee, then must pass whilst following the criteria. Prop firms are either a single or dual phase, meaning either one or two trials must be passed by the trader before they're funded. Whether the trader passes or fails, the prop firm still collects a check. If the trader fails to pass, the firm collects the fee the trader paid to attempt the challenge. If the trader passes and is profitable, the firm still makes money. It's a win/win situation for the firm, and potentially the trader too.

Prop firms are a good option for traders with low capital because they allow you to start trading with a larger account size once the trial phase(s) is passed. This can give you more leverage and the potential to make more profits. However, it is important to note that prop firms are still an investment. You're not only investing in yourself, you're investing in your ability to be consistently profitable as a forex trader, which is difficult. At CTMFX, we suggest trading using a demo or "paper trading" account before trading with live money. Prop firms are still considered "live" trading, since real accounts are in use.

How to Choose a Prop Firm

When choosing a prop firm, there are a few things you should keep in mind:

  • The trading criteria: Each prop firm has its own trading criteria that you must meet in order to be funded. These criteria typically include a minimum account balance, a minimum trading volume, and a minimum profit target.
  • The fees: Prop firms typically charge fees for their services. These fees can include a monthly subscription fee, a performance fee, and a withdrawal fee.
  • The reputation: It is important to choose a prop firm that has a good reputation. You can read reviews online or talk to other traders who have experience with the prop firm. Traders must be wary of choosing a prop firm as some are found to be "fly by night" organizations that have no true intention of paying out their clients, regardless of how profitable their traders may be.

Here are some of the best (verified) prop firms for forex traders with low capital:

  • TopstepFX
  • FTMO
  • MyForexFunds
  • SurgeTrader
  • The 5%ers

How to Trade Forex with a Prop Firm

Once you have chosen a prop firm, you will need to pass their trading challenge. This challenge is designed to test your trading skills and make sure that you are a profitable trader. If you pass the challenge, you will be funded with an account from the prop firm.

Once you have been funded, you can start trading. It is important to use risk management techniques to protect your capital. Always use risk management, and be sure to comply with the daily loss limits, in unison with the allotted leverage for your account. Most prop firms allow 1:100-1:200 leverage.


Prop firms can be a great option for forex traders with low initial capital. However, it is important to do your research and choose a prop firm that is reputable and has a good track record. If you are a profitable trader, prop firms can be a great way to grow your trading account and become profitable without leveraging thousands of dollars.

Here are some additional tips for trading forex with a prop firm:
  • Be patient: It takes time to become a successful trader. Don't expect to become a millionaire overnight. Just keep learning and practicing, and eventually you will achieve your goals.
  • Get help: There are many resources available to help you learn how to trade forex. There are books, courses, and even mentors who can help you on your journey.
  • Never give up: Trading forex is a challenging but rewarding endeavor. If you are willing to put in the work, you can achieve success.

*Article assisted by AI & Google Bard