Prop Firm
A prop firm (proprietary trading firm) funds traders with the firm's own capital after they prove their skill through an evaluation, then takes a percentage of the profits the trader generates.
The evaluation model
Modern prop firms operate on an evaluation model: you buy access to a simulated account (the combine), trade it until you hit a profit target without breaking any rules, and the firm graduates you to a funded account where you trade real capital. The combine acts as both a paywall and a filter.
Some firms run a one-step evaluation: pass the target, get funded. Others use a two-step model where you have to pass an evaluation phase and a verification phase before going live. The economics work because most participants don't pass, and the evaluation fees fund the rare traders who do.
How payouts work
When you trade a funded account, you keep a percentage of the profits — typically 80-90%. The firm keeps the remainder. Payouts usually require minimum profit thresholds, minimum trading days, and consistency rules (no single oversized day distorting the average).
You don't deposit capital and you don't lose money beyond the combine fee. The firm absorbs the trading losses on funded accounts. This is why the rules are strict — the firm is on the hook for your bad days.
The rules that matter
Every prop firm enforces a maximum trailing drawdown, a daily loss limit, and a maximum account loss. Break any one of them and the account closes — even on a funded account where you've been profitable for weeks. The rules are designed to filter for traders with controlled risk, not lucky ones.
Some firms also enforce consistency rules (no single day greater than 30-50% of total profits), scaling rules (max contracts based on account size), and news-event restrictions. Always read the current rulebook of the specific firm you're evaluating, because the rules change frequently.
The major futures prop firms
Apex Trader Funding, Tradeify, Lucid Trading, MyFundedFutures, TakeProfitTrader, TradeDay, and Earn2Trade are the names most futures-focused prop traders run combines with. Almost all of them execute on Tradovate underneath, which is why a single Tradovate-native copier can serve every one of them.
In the forex space, the major names are FTMO, MyForexFunds (when active), and various MT4/MT5-based firms. Those run a different execution stack — MetaTrader and cTrader — which is why copying across futures and forex prop firms typically requires two different copier products.
Frequently asked questions
Is the money in a funded prop firm account real or simulated?
It depends on the firm's model. Many futures firms keep even funded accounts on a simulated or firm-capital account and pay you real cash for the profits you generate, rather than giving you direct access to a live market account. Either way you don't deposit trading capital and your losses beyond the evaluation fee are the firm's to absorb — which is why the rules are strict.
How much does a prop firm evaluation cost?
Evaluation fees scale with account size and are usually a modest monthly or one-time charge relative to the buying power you're testing for — smaller accounts cost less, larger ones more. Firms run frequent discounts, so the headline price is rarely the real price. Treat the fee as the cost of the attempt, since most participants don't pass on the first try.
Can I run more than one prop firm account at the same time?
Yes, and most serious traders do — it's the main way to scale a working strategy past a single account's buying-power cap. Each account carries its own independent rules (trailing drawdown, daily loss limit), so running several at once multiplies both the opportunity and the number of rule breaches you have to manage simultaneously.
What happens if I break a rule on a funded account I've been profitable on?
The account closes, regardless of how profitable it had been — a trailing-drawdown or daily-loss breach ends it even after weeks of gains. Depending on the firm you may be able to reset or repurchase, but any unpaid profits in a breached account are typically forfeited. The rules exist to filter for controlled risk, not past performance.
Do prop firms let me copy trades across several of their accounts?
Copying your own master to your own accounts is generally allowed at most futures firms, but the details vary and some restrict cross-firm copying or flag identical fills under consistency rules — always confirm in the rulebook first. Because most firms run on Tradovate, a copier like PropCopy can drive followers across several firms from one master, with per-account limits so a single bad day doesn't breach every account at once.
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