Getting Paid by Prop Firms Isn’t Easy (2024)

Prop firms look like an attractive option for those traders with experience and skill but also with a limited budget. Yet it is a well-known fact that very few traders pass the evaluation in prop firms, with the vast majority failing to meet the objectives and even fewer reaching the first payout. But how bad is the situation exactly?

Just look at this data released by MyForexFund in December 2021:

It provides quite a few interesting insights, like the fact that day traders seem to be much more successful than swing or other longer-term traders. But for the topic of this guide, the important part is the rate of traders who have reached the first payout. While the 3% rate seems to be already very low, it is important to understand that it is the percentage among the people who have already passed both stages of the evaluation. Using simple math, we can discover that the rate of people who have reached the first payout compared to the total number of people attempting to pass the evaluation is just a meager 0.072%! That result should look catastrophic for anyone who hopes to join a prop firm.

The article from Lux Trading Firm provides slightly different results. According to it, 4% of traders, on average, pass prop firm challenges. But only 1% of traders kept their funded accounts for a reasonable amount of time. While this result is not nearly as bad as the one discussed earlier, it still looks bleak for prospective prop traders.

But why is the percentage of failure so high? It is true that, according to some studies, the rate of loss among Forex traders can be higher than 90%. But it is still nowhere as terrible as a 99.9% failure rate reported by prop firms. So, what can the reasons for this be? While it can be hard to say for sure, market experts and traders have several theories for such a phenomenon.

Conflict of interests between traders and prop companies

Usually, one of the first reasons for an extremely high failure rate of prop traders cited by detractors of prop trading is often strict and unfair rules imposed by prop firms. Or, to put it simpler, those people claim that prop trading is a scam, equating it to a Ponzi scheme. And they point to the results shown above as evidence that prop trading is bad.

This point of view does not seem to be without merit. After all, when a prop trader fails, the prop firm can pocket the application fee without paying the trader anything back. And if 99.9% of the applicants fail, it should not be hard to pay out the monthly profit split for the few successful traders from the money acquired from the fees. And the prop firm can still earn hundreds of thousands or even millions of dollars each month. That is especially likely in the case of prop firms who boast a 100% profit payout, as they simply do not have many other sources of income besides the application fees. And, of course, this leads to a conflict of interests as it is beneficial for prop firms to make the applicants fail the evaluation, so they would have to pay the fees again.

Defenders of prop trading claim that it is far more beneficial for prop firms to earn profit with the help of successful traders than to make them fail. After all, the vast majority of traders will very likely fail anyway, so there are few benefits for a prop firm to make a profitable trader fail as well. Some even claim that many prop firms, banking on profit from application fees and not on employing profitable traders, have failed as the fees do not cover the expenses. Without solid data and evidence, it is hard to say whether it is true or not.

What is easier to confirm is the fact that prop firms can offer another chance to retry the evaluation. For example, probably the most popular prop firm, FTMO, offers a free extension of the evaluation period and a retry free of charge if your account is in profit. Some other prop firms have similar offers, providing either limited retries or unlimited retries if you manage to be profitable. This makes it look more likely that such firms genuinely want to find profitable traders and not just collect application fees from them, making them fail again and again. Other firms do not offer free retries but offer discounts for those traders who have failed the evaluation process.

While it is highly likely that there are indeed a number of scam prop firms out there, that does not necessarily mean all prop firms are scammers. There can be other reasons for how difficult it is to join a prop firm. Such as...

Anyone can try to apply to a prop firm

It is true that prop firms aim to find experienced and skilled traders. But that does not mean that only such traders can try to join a prop firm. Anyone can apply and start the evaluation process providing they have paid the application fees. And the prospect of significant trading capital attracts many newbie and inexperienced traders who are drawn towards prop firms by the promise of seemingly easy money. Such traders will almost certainly fail, but they are still included in the statistics. Traders who had applied for evaluation but were not trading for whatever reasons, traders who burned their account in the first few days and left, and other people who were not serious about trading— all of them are also included in the stats, and they make the success rate looks worse than if only serious traders were included in the data. There are many mistakes that an inexperienced trader can make. Among them...


Prop trading may look like a fast road to easy money. And traders, who were lucky to pass the evaluation, may feel themselves overflown with confidence and lose caution because of this. And this can lead to greed among novice investors who, after getting funded, may want to try earning as much money as they can as fast as they can. Such an approach can lead to overtrading, the use of extremely big leverage, and other mistakes that lead such traders to lose their funded accounts. And among the most frequent mistakes is...

Lack of proper risk discipline

Risk discipline is crucial regardless of your style of trading. But it is especially important in prop trading as prop firms' strict rules make it too easy to blow your funded account. While some prop firms demand their traders to use mandatory stop-losses, not all do. The data from MFF shows that more than 60% of traders do not use stop-losses. Some specialists voiced doubts about that statistic, theorizing that plenty of traders may be using hidden stop-losses, which the prop firm does not see. Whether this is true or not, there is no doubt that many traders, especially beginners, fail to assess risks properly and fail because of that. Of course, it is essential to understand that evaluating risks in prop trading can be more complicated than in regular trading due to...

Not understanding what drawdown entails

Almost universally, prop firms have a drawdown limit. If a trader breaches it, they lose their funded account. Some traders argue that this means that the size of trading accounts offered by prop firms should be considered far smaller than prop firms claim. For example, a prop firm provides a $100,000 account with a 10% drawdown limit, which is pretty typical. Let us say a trader wants to risk no more than 1% of their account size on each trade and opens five trades, risking 5% of the overall account size or $5,000. That seems pretty reasonable. Except, some traders argue that due to the drawdown limit, the effective capital a prop trader can actually risk without exceeding the drawdown limit is just $10,000. Meaning that in the aforementioned example, the prop trader's risk is not 5% (like it would be if they were trading with their own money) but 50%. But that is not the only problem traders may have with a drawdown.

Relative drawdown

A relative drawdown is one of the more insidious limits a prop firm may have. Unlike an absolute drawdown, which is easy to calculate and account for, a relative drawdown changes together with changes in your trading performance. And it increases not only with losses but also with profit. With an absolute drawdown, you can shield yourself from exceeding the drawdown limit by not taking the payout and growing your account. This way, the losses you incur will eat up your profits but will not bring you closer to the drawdown limit. But you will not be able to do so with a relative drawdown. That is because the increase in your account size increases the amount of funds you have to keep in your account without going into a drawdown. And that makes it impossible to protect yourself from the volatility and unpredictability of markets.


It is incredibly challenging to become a funded trader, and the data discussed in this guide proves this. Prop firms want to do business only with the best of the best, and the vast majority of traders do not cut it. That does not mean you cannot try to join the select few traders funded by prop firms. But if you want to try your hand at prop trading, you need to be wary of the reasons that make the majority of traders fail to join a prop firm or get a payout from it.

If you want to share your opinion, observations, and conclusions or simply ask questions regarding why getting paid by a prop firm is not easy, feel free to join a discussion on our forum.

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Getting Paid by Prop Firms Isn’t Easy (2024)


Is it easy to pass prop firm challenge? ›

This is a popular way for traders to prove their skills and potentially secure funding from a prop firm. However, passing this challenge can be quite daunting and requires a lot of hard work and dedication.

What percentage of people pass prop firm challenges? ›

The article from Lux Trading Firm provides slightly different results. According to it, 4% of traders, on average, pass prop firm challenges. But only 1% of traders kept their funded accounts for a reasonable amount of time.

Does Prop firm really pay? ›

Yes, prop firms do pay. While there are some scams out there popping up everyday, reputable prop trading firms like True Forex Funds, FTMO,5%ers,FundedNext are legitimate and pay traders according to their profit-sharing agreements. As for True Forex Funds, I can vouch for their credibility.

What is the failure rate for FTMO? ›

According to FTMO statistics, only about 10% of traders are able to pass the funded account challenge at any account level. This means approximately 90% of aspiring funded traders fail the evaluation and are unable to gain access to the firm's capital.

What is the success rate of prop firm evaluation? ›

It is estimated that only 4% of Forex traders succeed with prop firm challenges, and only 1% of traders can generate profits consistently without violating any rules.

How to pass every prop firm challenge? ›

Tips for Passing a Prop Firm Trading Challenge
  1. Understand the Rules of Engagement: ...
  2. Master Your Trading Strategy: ...
  3. Risk Management is Non-Negotiable: ...
  4. Leverage Your Analytical Skills: ...
  5. Stay Disciplined and Patient: ...
  6. Continuous Learning is the Key: ...
  7. Embrace Feedback and Adapt: ...
  8. Simulate Real Trading Conditions:
Feb 5, 2024

Why do people fail prop firm challenges? ›

At Lux Trading Firm, our Elite Traders Club has the highest pass rate in the industry – so we know what we're talking about! The most common reasons traders fail prop firm challenges are simply overleveraging their trades, not understanding the rules, and not having a profitable trading strategy.

Is it hard to get funded by a prop firm? ›

Becoming a funded trader with a prop firm involves showcasing your trading skills and adherence to risk management during an evaluation process. While the difficulty can vary, it's achievable with consistency, dedication, and a solid trading approach.

What happens if you lose a prop firm challenge? ›

When you are trading with a prop firm, your losses are usually limited to the foregone risk of your challenge/account fee. You are generally not liable for the prop firm's lost funds.

What are the negatives of prop firms? ›

Foreign Exchange Specialist at FTMO.
  • Strict Risk Management Rules and Trading Guidelines: ...
  • Profit Sharing: ...
  • Profit Targets During the Evaluation Period: ...
  • Limited Control Over Capital and Payouts: ...
  • Lack of Regulatory Oversight: ...
  • High Leverage and Margin Requirements: ...
  • Financial Risk and Capital Exposure:
Feb 11, 2024

How many people pass FTMO? ›

There is estimated to be a 90% fail rate of traders that take the FTMO challenge. The reason behind this is due to traders chasing the profit target with a time restriction in place. A trader doesnt know when a winning streak might occur, or when they may take a string of drawdowns.

Which is the most trusted prop firm? ›

The most popular prop trading firms and funded programmes
  • Axi Select.
  • FTMO.
  • The Forex Funder.
  • E8 Markets.
  • True Forex Funds.
  • The 5%ers.
  • Funded Next.

What is the biggest FTMO payout? ›

Dariusz from the USA exceeded everyone's expectations and made his dreams come true. As our FTMO Trader with a maximum allocation, he beat the previous record payout of $500,180 thanks to his profit of $1,206,225, the biggest payout in the industry! Huge respect for Dariusz.

Is FTMO banned in the US? ›

FTMO Banned USA Clients – Heres our Top 5 Alternatives (Accepting USA Traders) FTMO have now restricted access to all new US-based traders as of January 2024. This appears to be related to regulatory issues and may have something to do with the recent My Forex Funds case.

Can you get banned from FTMO? ›

Besides the standard eligibility conditions, you should not have any past or prevailing conflict of interest with FTMO, or engagement in the Forbidden Trading Practices, as laid out in the Terms & Conditions (clause 5.4).

How long should it take to pass a prop firm challenge? ›

In conclusion, it can take around 4-5 months to pass a prop firm trading challenge and become a funded trader. However, it can take much longer than that to become a profitable trader beforehand – which is a necessity.

How long does it take to pass the prop firm challenge? ›

For most funded trading accounts, it takes around four to five months to pass the screening process or prop firm trading challenge, before funding will be allocated to a trader. However, some prop firm challenges can be passed in a much shorter time, in as little as two days, though this involves using increased risk.

How many traders pass prop firm challenges? ›

How Many Forex Traders Get Prop Firm Funded Accounts? It's hard to be entirely sure of how many traders are failing prop firm challenges across the industry, but we have a pretty good idea! We estimate that around 5% of forex traders are actually obtaining funded accounts.

What happens if you pass the prop firm challenge? ›

Account Funding and Scaling

Upon successfully passing a Prop Firm Challenge, traders may be required to fund their trading accounts with an initial amount. The firm may also have scaling plans that determine how much capital traders can access based on their performance.

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