Are you a day trader looking to scale your capital without risking your own money? Prop trading firms may be your ticket to the next level. In this guide, we’ll break down exactly how prop firms work, what to look for in a trustworthy firm, how to pass the evaluation process, and how to claim exclusive prop trading evaluation discounts.

This article is based on insights from a million-dollar funded prop trader who has helped over 1,000 traders get funded—and it’s everything they wish they knew before starting out.

What Are Prop Trading Firms?

Proprietary trading firms (“prop firms”) provide traders with access to significant trading capital. In exchange, the trader agrees to follow the firm’s rules and split a portion of their profits.

The Traditional Model

Historically, prop firms were part of banks or hedge funds. They recruited traders, trained them, and tested them through evaluations. If successful, the firm provided capital, and the trader earned a percentage of profits while respecting strict risk parameters.

The Virtual Model: A Modern Opportunity

In today’s digital age, virtual prop firms have revolutionized this process. Traders can now qualify remotely by completing a challenge or evaluation using a simulated account. Once they pass, they get access to a funded account and share in the profits.

How Prop Firm Evaluations Work

Most virtual prop firms use a one- or two-step evaluation model.

For example, firms like FTMO offer accounts from $10,000 to $200,000. Here’s how the evaluation typically works:

  • Phase 1: Earn a 10% return without losing more than 5% in a day or 10% overall.
  • Phase 2: Earn 5% profit under the same drawdown conditions.
  • Get Funded: Meet the targets, and you’ll receive a live funded account.

Once funded, traders usually keep 80% of the profits and may even get their evaluation fee refunded after their first payout.

Why Use a Prop Firm?

Scaling your profits is the biggest benefit:

  • Trading a $1,000 account with a 10% return = $100 profit.
  • Trading a $100,000 account with the same return = $10,000 profit.

No extra work, no inventory, no employees—just better returns on the same trading skills.

How to Choose the Best Prop Firm for Beginners

If you’re looking for the best prop trading firms for beginners, consider these key factors:

1. Reputation

Always research a firm’s track record:

  • Check TrustPilot and other review sites.
  • Use tools like Prop Trading Deals to compare firms based on reviews, pricing, and reputation.

Avoid shady prop firms that don’t pay out or disappear overnight.

2. Profit to Drawdown Ratio

This metric shows how difficult the challenge is:

  • A 10% profit target with a 5% drawdown is much harder than an 8% target with a 10% drawdown.
  • Look for firms with reasonable targets and generous drawdowns.

3. Pricing

Don’t just jump at the cheapest firm. If something seems way below the industry average, it may be a red flag. Stick to firms with long-term viability.

Red Flags: How to Avoid Prop Firm Scams

Protect yourself by following these rules:

  • Avoid firms that allow High-Frequency Trading (HFT)—it’s often a scam indicator.
  • Choose firms that have been in business for 4+ years.
  • Look for transparency: real people running the firm, not anonymous operators.

Sites like Prop Firm Match can help identify scammy firms that don’t pay or treat traders unfairly.

Real Talk: The Success Rate Is Low

Only 6–7% of traders who take a prop firm challenge actually get funded. Even fewer—just 1.75%—make it to their first payout.

That’s why having a proven strategy and picking the right firm is essential.

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Final Thoughts: Should You Try a Prop Firm?

Prop firms can be a game-changer for skilled traders—offering the ability to scale quickly without putting your own money at risk. But not all prop firms are created equal.

Choose one with a solid reputation, fair rules, and transparent operations. And if you’re looking for a cheap futures prop firm evaluation with an unmatched discount, Apex Trader Funding should be at the top of your list.

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