Comparison between real prop firms & online prop firms

In this article, we will make a general comparison between real proprietary trading firms and online proprietary trading firms. We will go through the requirements you need to fulfil to join them, how they function, and what they offer to forex traders.

Real proprietary trading firms

Real proprietary trading firms are interested in recruiting experienced traders who can show and prove their trading history with a track record. After their track record is accepted, traders are called up for an interview to determine if they will be compatible based on what the firm is looking for. If the firm accepts the trader, they begin teaching him the exact trading strategies he is expected to trade with. As most of you know, in this industry, the learning doesn’t stop, so there are many meetings and seminars every trader participates in to develop the knowledge required to be successful continuously. Note that the amount of traders is limited and is in most cases below 100 unless the firm has been well-established in the industry for a more extended period. In that case, the number of traders at the firm can be more significant.

Traders who start working for a real proprietary trading firm receive a real live account funded with the capital of the firm they are representing. They are paid on a monthly basis, as well as eligible for profit splits that are usually around 50%. However, you are expected to use the trading strategy that the firm educates you to use with highly calculated risk management. Traders are always expected to follow the rules provided by their supervisors while also having their work reviewed so no significant errors can occur and the consistency doesn’t worsen. They are expected to be professional individuals who are disciplined and can control their emotions while participating in the market’s ongoing conditions.

Real proprietary trading firms offer real offices or, in other cases, trading floors to their traders, where everyone has their trading desk to work at. Traders at these trading floors are always encouraged, which can be seen by the continuous education the firm provides for them to improve their habits and mentality. The more disciplined and educated a trader becomes, the more consistent he will be in the long run. Real proprietary trading firms want every trader on their trading floor or in the office to be successful in making money. That is because if all traders make money consistently on a monthly basis, the firm will continue to grow, which makes all the sacrifices the firms make to educate every individual worth it.

Online proprietary trading firms

On the other hand, online proprietary trading firms require no track record of traders that are interested in joining them. However, they offer various funding options that traders can opt for with specified rules and guidelines. Usually, the funding programs options can be one-step or two-step evaluation challenges, direct funding, or asset management, which is the only instance a trader has to provide the firm with a track record. These funding options require a certain fee, which can be a one-time or a monthly fee.

Traders that start working for online proprietary trading firms start their evaluation stages on demo accounts, which allows them to prove themselves to the firm that their trading strategy is profitable in the markets. However, after successfully passing the challenge, some firms provide traders with real live accounts. The rest of them copy the trades themselves and rely on covering payouts from the initial fees acquired from the unsuccessful evaluation challenges. In some cases, you could say that some of the online proprietary trading firms have the intention to collect fees from unsuccessful traders that participate in the challenges.

Working with online proprietary trading firms can sound tempting, primarily because of the profit splits you acquire, leading up to 90%. Due to that, many traders decide to join before they educate themselves about the ongoing conditions in the markets. Since almost everyone can join an online proprietary trading firm and trade from pretty much anywhere globally, they can have a massive amount of traders worldwide. These numbers can reach even over 100,000, which can be hard to handle for their customer support teams, making you wait for crucial matters when you encounter problems.

Note that online proprietary trading firms can be an excellent choice for individuals who have the knowledge one needs to be active in the market. However, beginners can encounter quite a few problems along the way, so we advise you to educate yourself and practice before joining the markets with your hard-earned capital. Always research the online proprietary trading firm before deciding to pay for the challenge they are offering. After that, follow your initial trading strategy and risk management parameters that you usually use without letting emotions overflow you.

If you are interested in joining an online proprietary trading firm, you can check complete reviews for the proprietary trading firms listed on our website.