What is a Prop Firm?

A proprietary trading firm, or "prop firm," provides capital to skilled traders who can demonstrate consistent profitability and sound risk management. Instead of trading with their own limited capital, traders can access significant funding from the firm, sharing a percentage of the profits they generate. This model allows talented individuals to scale their trading operations without personal financial risk.

Prop firms typically employ a rigorous evaluation process, often called a "challenge," where prospective traders must meet specific profit targets and adhere to strict drawdown limits within a set timeframe. Successful completion of these challenges leads to a funded account, enabling traders to earn a profit split from their trading activities.

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