Prop trading firms give traders access to capital without risking personal funds. Account types vary, from quick one-step challenges to multi-step evaluations and instant funding options. This guide covers each type, helping you find the right pathway to a funded account.
Prop trading firms let traders access more capital through structured accounts and evaluations, using the firm’s funds instead of their own, so they don’t take on financial risk.
To get a funded account, you need to complete an evaluation or challenge, which involves hitting specific profit targets within risk limits. After passing the challenge, you can start trading with the prop firm’s capital instead of your own money.
Some trading firms also offer instant funding accounts, which skip the evaluation for a higher fee. To keep your funded account, you must follow the prop firms trading rules, like risk and drawdown limits.
One-step evaluations are straightforward, single-phase challenges that let you demonstrate your trading skills by meeting a single profit target within defined risk limits.
Unlike multi-step evaluations, this model fast-tracks you to funding with just one successful performance check. You’ll pay a one off fee to access the challenge, and if you meet the profit and drawdown requirements, you’ll be eligible for a funded account.
One-step evaluations suit confident traders with a solid trading background who want a quicker route to a funded account but still value some level of performance assessment.
If you’re comfortable managing risk and hitting targets without needing an extensive evaluation period, a one-step challenge may be a good fit.
For beginner traders, however, it may lack the structured progression that multi-step models offer.
Pros and Cons of One-Step Evaluations
Prop Firms Offering One Step Challenges
Prop firms such as DNA Funded and FundedNext provide streamlined one-step evaluation challenges, allowing traders a quicker path to securing funded accounts.
These challenges offer a simplified evaluation process with straightforward profit targets, appealing to traders seeking fast-track funding without multi-phase evaluations.
Two-step evaluations involve a two-phase challenge to assess your trading skills and consistency. In the first phase, you’re typically asked to reach a specific profit target while adhering to drawdown limits.
If you meet these goals, you’ll progress to the second phase, where the requirements are often reduced, such as a lower profit target, allowing you to focus more on stable performance rather than aggressive growth. By completing both stages, you gain access to a funded account.
Two-step evaluations suit traders looking for a more measured approach to prop funding. They provide a balanced assessment, allowing you to show consistent performance over two phases.
This structure may appeal if you’re comfortable with evaluation but prefer a bit more structure than a single-phase model offers. Newer traders also benefit from the added structure, as the phased approach allows for gradual skill development.
Pros and Cons of Two-Step Evaluations
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Cons
Prop Firms Offering Two Step Challenges
IC Funded and OANDA Prop Trader both offer two-step evaluations, ideal for traders seeking a structured pathway to a funded account.
IC Funded partners with IC Markets, providing competitive spreads from 0 pips, low entry fees starting at $49, and profit splits from 75% to 80%. OANDA Prop Trader offers accessible fees from $35, profit splits up to 90%, and the MetaTrader 5 platform.
Three-step evaluations add an extra layer of testing to assess a trader’s long-term consistency, discipline, and risk management skills.
Typically, these accounts require traders to complete three distinct phases, with each step involving a progressively refined set of goals and drawdown limits. For instance, the first phase may have a higher profit target, while subsequent stages may introduce additional rules that encourage disciplined trading.
Passing all three stages typically results in a funded account with the firm.
Three-step evaluations are ideal if you’re looking for a thorough assessment of your trading abilities or if you’re a trader who thrives under structured, progressive challenges. This model is particularly beneficial for traders who want to develop and refine their approach, as it provides a more gradual path to funding.
However, it may not be suitable if you’re aiming for faster access to capital, as the three-step process demands time and consistent effort across multiple phases.
Pros and Cons of Three-Step Evaluations
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Cons
Prop Firms Offering Three Step Challenges
Only a few prop firms currently offer three-step evaluation models due to the comprehensive nature of this process. Firms like Maven Trading and The 5%ers include this option, catering to traders who prefer a more in-depth, phased approach to becoming funded.
Instant funding accounts let you skip the evaluation phase entirely, giving you immediate access to trading capital from the start.
These accounts appeal to prop traders looking for a fast pathway to trading with larger capital without meeting extensive profit targets or other benchmarks first.
The one-time fees for instant funding is typically higher than for accounts with multi-step evaluations, but the trade-off is direct access to a funded account without going through an evaluation phase.
Instant funding accounts are ideal if you’re an experienced trader with a consistent track record and you want to start trading with capital right away. This prop model works well for those who want to avoid the challenge of meeting multiple evaluation stages and are confident in their ability to manage risk from day one.
However, it may not suit if you are new to prop trading and need a structured assessment period to refine your trading strategies.
Pros and Cons of Instant Funding Accounts
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Best Prop Firms for Instant Funding
Several prop firms provide instant funding options for traders who want immediate access to capital. Examples include FTP’s Masters Program offers a straightforward pathway to funded trading without an evaluation stage.
Once traders successfully complete the evaluation phases—whether through one-step, two-step, or even three-step processes—they transition to a funded account.
With a funded account, you gain access to the firm’s capital, allowing you to trade larger positions and capture opportunities you might not otherwise reach with personal funds alone.
Transitioning from an evaluation account to a funded account is often a shift in trading responsibility. You now have access to real capital, so firms typically require traders to maintain a steady performance.
Firms implement drawdown limits and require regular risk management to ensure the firm’s capital is protected. Some prop firms continue periodic evaluations to ensure traders are upholding standards, reinforcing a sense of accountability and long-term stability.
Funded accounts operate on a profit-split model, where the prop firm takes a percentage of any profits earned. Most firms offer competitive profit splits—often ranging from 70% to 90%—allowing you to keep the majority of your earnings while sharing a smaller portion with the firm.
Payment schedules vary, with some firms allowing weekly or bi-weekly withdrawals, while others operate on a monthly cycle. When choosing a funded account, check the payout conditions and make sure they align with your trading style and cash flow needs.
Many prop firms encourage successful traders by offering scaling plans to increase account size over time. Scaling allows you to grow your trading capital incrementally based on your consistent performance.
For example, some firms double your account balance after achieving specific profit and risk milestones over a set period. Scaling not only increases your earning potential but also provides an incentive to maintain disciplined trading practices.
Some prop firms offer standout funded trader programs that cater to various trader needs. Prop firms like DNA Funded and IC Funded are known for their generous profit splits and flexible payout structures, while FTMO and FundedNext provide scaling opportunities that reward disciplined, consistent performance.
Each trading program varies, so reviewing individual terms can help you find the best fit based on your trading goals and growth aspirations.
Many prop trading firms offer add-ons that allow you to tailor your account to better match your trading goals and preferences. These optional features enhance flexibility in areas like profit-sharing, leverage, and payout frequency, providing you with a more personalised trading experience. Add-ons are especially useful if you’re looking to maximise earnings, reduce restrictions, or access funds more quickly.
Types of Challenge Add-Ons
Add-ons vary by firm, but some common types include:
Customising accounts with add-ons allows you to adapt the prop trading experience to your specific trading needs. By selecting options like higher profit splits or reduced restrictions, you can create an environment that maximises your earning potential while providing flexibility.
This is especially beneficial if you have a specialised trading strategy that doesn’t fit within the standard account parameters.
While add-ons can offer significant advantages, they often come with additional costs, so it’s essential to weigh the benefits against the extra fees. Also, consider how each add-on aligns with your risk tolerance and trading goals.
Choosing the right prop trading challenge can make a big difference in your trading journey.
Here’s a step-by-step guide to help you assess and select a challenge that aligns with your experience, goals, and risk tolerance.
Prop trading firms are companies that fund traders with capital, allowing them to trade financial instruments with the prop firm’s money rather than their own capital. Traders go through an evaluation process with a simulated account to prove their skills, meeting specific profit targets and risk requirements. Evaluation fees are the primarily way prop trading firms make money.
Upon passing, they receive a funded account with profit-sharing terms. This setup appeals to traders who want access to larger trading capital without personal financial risk, offering unique growth opportunities and performance incentives.
The best prop trading firm in Australia is DNA Funded, known for its low fees, profit splits of 80%–90%, and access to multiple markets through platforms like DXTrade and Trade Locker. IC Funded is another top choice, offering tight spreads, popular platforms like MT4 and MT5, and deep liquidity from IC Markets. OANDA Prop Trader also ranks highly for beginners, with low challenge fees, a profit split of up to 90%, and support via MT5. Each firm provides unique benefits suited to different trading needs, so be sure to check our prop firm reviews for a comprehensive comparison.
Yes, many proprietary trading firms now offer cryptocurrency in addition to forex trading within their evaluation challenges, allowing you to demonstrate your trading skills in digital asset markets like Bitcoin and Ethereum. Prop firms such as DNA Funded and Blueberry Funded provide access to a variety of cryptocurrencies, catering to the growing interest in crypto prop trading.
As well as forex markets and crypto, you can also trade CFDs in challenges like indices, commodities, shares, and ETFs. Find out more in our full DNA Funded Review.
Yes, many prop trading firms allow traders to trade futures in their prop challenges. Futures trading often requires an additional fee for real-time data feeds, which is essential for accurate price tracking and decision-making. Beyond futures, some firms provide access to other derivatives like options and CFDs, giving traders a broad range of instruments to diversify their strategies.
Yes, Funded trading accounts are legit when offered by reputable prop trading firms that clearly outline their rules, profit splits, and evaluation processes. These accounts often referred as instant funding prop firms allow traders to use the firm’s instead of their own funds for trading while sharing a percentage of the profits. Legitimate firms provide transparent evaluation stages, fair profit-sharing models, and reasonable trading conditions, and often have strong partnerships with forex brokerages.
To become a proprietary trader, you typically need to pass an evaluation with a prop trading firm to demonstrate your trading skills and risk management. Most firms offer challenges with profit targets and drawdown limits to assess consistency. Once you pass, you receive a funded account to trade the firm’s capital. Some firms also offer instant funding options, allowing experienced traders to start trading immediately without an evaluation. Successful traders can often scale their accounts over time.
The best trading platforms for prop trading are considered to be MetaTrader 4 (MT4), MetaTrader 5 (MT5), cTrader, TradingView, and Match-Trader, each catering to different trading needs. MT4 and MT5 are popular for their automated trading options and technical analysis tools, while cTrader appeals with advanced charting and user-friendly design, while TradingView is preferred for its powerful analysis tools and social features. Match-Trader combines TradingView’s charts with versatile forex and prop trading features, offering an all-in-one solution.
Building a prop trading career involves developing trading skills, mastering risk management, and gaining experience in financial markets. Most traders start by using their own money to trade CFDs, or working in financial institutions managing client funds before transitioning to proprietary trading, where firms provide capital for trading activities. Success requires discipline, continuous learning, and a strong track record, which are crucial to advancing in prop trading roles.
