Trading is a world where you make choices that can either make or lose you money. It’s complex. So you gotta understand some key ideas that impact what goes on. These big ideas like “proprietary trading firms,” “instant funding,” and “evaluations” can be confusing.
Not getting them right can seriously mess up your trading and (simulated) prop firm capital funds. This article breaks down what these mean and how they change how you trade. It also gives some real advice to help traders handle these things. If you get these concepts, you’ll be more ready for the tough and good stuff in trading. And you’ll give yourself a better shot at making bank.
The big firms that trade their own money and sometimes others’ money too are “proprietary trading firms.” Getting “instant funding” means quickly having access to more simulated trading capital from a firm. “Evaluations” just refer to how firms assess your trading.
It’s crucial to grasp these if you wanna trade well. Messing them up can make a nasty dent in your trading and money. This article looks closer at them so traders can use them to their advantage. Some solid tips here also help traders work with them better.
By getting the ins and outs of these key ideas, traders will have a heads up on the challenges and wins in trading. This will let you trade smarter and give you a better chance to build that money pile!
Page Contents
What is a prop Firm?
A “prop firm” is short for a proprietary trading firm. This is a company where traders use the firm’s money, not customer money, to trade things like stocks, bonds, and currencies. The main goal is for the firm itself to profit directly from trading or from selling prop firm challenges.
The traders might be employees or contractors providing money to the firm to trade with. In the case of modern prop firms, the customers are more likely to trade simulated capital, but still be eligible for pay-outs thanks to their business model.
The Truth About Instant Funding
Source: fundyourfx.com
On the surface, instant funding makes it seem like prop firms give traders immediate access to money to trade with. This appeals to traders, especially those without much money of their own.
But there’s a catch. Traders need to make enough trading profits to reach a buffer zone or safety net for the firm. Only then do traders get their share of profits. So the funding isn’t really instant. The system protects the firm while rewarding traders for making money.
What is an example of an Instant Funding Prop Firm?
Fast Track Trading offers a unique proposition with its instant funding model and flexible trading conditions. You can read more about Fast Track Trading here, Fast Track Trading – Must-Read before signing up : r/PropFirmTester (reddit.com).
Success requires understanding and adhering to their specific rules, particularly the 5% buffer zone and 20% consistency rule. While it presents opportunities for significant earnings, traders should approach it with realistic expectations and a solid risk management strategy.
Key Points Summary ─ Fast Track Trading
Source: istudy.org.uk
- Account Types and Costs
- GT account is popular, costing $599 as a one-time fee
- Discount codes are available, potentially reducing costs to around $330
- No monthly subscriptions or activation fees
- Trading Instruments
- A wide range of future symbols is available
- Includes equity futures, interest futures, currency futures, agricultural futures, energy futures, metal futures, micro futures, and cryptocurrencies
- Forex pairs can be traded through futures contracts (e.g., 6E for Euro/Dollar)
- Trading Limits
- GT account allows trading up to 15 Mini Contracts and 150 micros
- More micros allowed compared to some competitors (e.g., Topstep)
- Risk Management
- Recommendation to start with micro contracts for better risk control
- End of Day Drawdown rule: maximum drawdown is 5% of the current balance
- Trading Platforms
- Supports Rithmic-compatible platforms
- Offers Nitro, a free version of Quanttower with copy trading features
- Payout Eligibility
- 5% buffer zone: Traders must reach $7,500 profit for a 150K GT account
- 20% consistency rule: Most profitable day can’t exceed 20% of total earnings over 5 or 10 trading days
- Payout Policies
- 5-Day Payout Policy: Payout possible in 5 days if daily profit is 20% of profit buffer
- 10-Day Payout Policy: Payout in 10 days if the best day doesn’t surpass 20% consistency rule
- Payout Limits
- GT account: Up to $3,000 per account for first eight payouts, then up to $6,000
- Limits in place to manage liquidity
- Account Resets
- Available for GT and Le Mans accounts
- Must have met 5% account buffer
- Reset gives 50% of the previous day’s ending balance
- Costs 10% of the account’s balance at the end of the previous day
- Unique Features
- Instant funding model (no evaluation phase)
- Copy trading across multiple accounts is possible
- Tips for Success
- Start with micros for better risk management
- Aim for consistently smaller profits
- Understand and work within the 20% consistency rule
- Use account resets judiciously
- Consider multiple accounts for higher potential earnings
- Potential Earnings
- Six-figure payouts are possible with multiple accounts and copy-trading
- For $10,000+ monthly earnings, at least four GT accounts recommended
Understanding Prop Firm Evaluations
Source: realtrading.com
In prop firms, evaluations judge trader performance on things like:
- Meeting profit targets
- Following risk rules
- Consistent results over time
Some firms do a single evaluation. Others have multi-stage evaluations with new targets to meet at each stage. In the case of instant funding prop firms, there are no evaluations, but you do need to reach a certain amount of account balance to become eligible for payouts.
Single vs. Multi-Stage prop firm challenges?
The difference lies in structure and targets. Single-stage may have one higher target with more flexibility. Multi-stage has lower targets initially but requires repeatedly proving skill and consistency.
The Psychological Side or instant funding
Source: jpmarkets.co.za
Despite the misleading name, “instant funding” has a mental advantage. With multi-stage evaluations, continually needing to hit targets can stress traders out and disrupt decision-making. With single targets, traders can better focus on trading strategies vs. chasing multiple goals.
In Conclusion ─ Are Instant Funding Prop Firms any good?
While prop firms seem appealing, trading isn’t easy money. It’s wise to watch this Youtube video about Fast Track Trading before you start trading with prop firms. There’s pressure to generate profits and cover risks. But for disciplined traders who have the skills and risk appetite, prop firm trading offers a way to engage financial markets while outsourcing capital concerns. Understanding reality is key.
