What you'll learn
- Apply an ordered checklist to any firm
- Weigh transparency and payout record ahead of price
- Match the rule set to your own trading
The checklist
| Factor | What to look for |
|---|---|
| Company transparency | A named legal entity, a real address, named founders, years in business, published terms, a public record of paying |
| Rules | Clear definitions of every limit, measured how and when; the same for evaluation and funded |
| Drawdown | Static or trailing, on balance or equity, in both stages |
| Profit target | Ratio to the maximum loss; realistic for your method |
| Profit split | Starting split, path to a higher one, conditions |
| Payouts | Frequency, minimum, caps, review time, method, track record |
| Platforms | One you can use; your automation permitted |
| Markets | The instruments you trade, at realistic simulated costs |
| Price | Fee per 10,000 dollars, discount, refund, reset cost |
Transparency and history
Several large firms have stopped paying and closed with no notice, usually after a period of slowing payouts and rule changes. The warning signs were public: payout delays discussed in forums, new consistency rules, a broker relationship ending. A firm that has paid for years, publishes payout figures, names its people and answers questions is a different risk from one that appeared last quarter with a bigger split. Weight this above everything else.
Matching the rules to you
Swing traders need weekend holding and static drawdown. Scalpers need a platform with tight simulated spreads and no tick-scalping ban that catches them. News traders need a firm without a news window. Traders with a few big days a month need no consistency rule. Write down what your method needs before you look at any firm, then filter.
Regulation
Most prop firms are unregulated because selling a simulated evaluation is not a regulated activity in most countries. That is changing: some regulators now treat certain models as financial services. Until it does, the firm's reputation is your protection, and the checks above are how you assess it.
Key takeaways
- Order: transparency, rules, drawdown, target, split, payouts, platforms, markets, price.
- A firm's payout history is the closest thing it has to regulation.
- Write down what your method needs before comparing firms.
- Price last, because it is the only factor that cannot cost you more than the fee.
Knowledge check
Trading forex, CFDs and other leveraged products carries a high risk of losing money. This lesson is general education, not advice. Risk disclosure.