What is Prop Trading?
Prop trading, short for proprietary trading, is when a company uses its capital to trade financial markets for profit. A prop trading firm might look like a hedge fund company on the surface but what makes them different is the source of money used to trade.
Unlike collective investments like hedge funds or mutual funds, which pool many investors’ money or money managers who directly manage another person’s capital, a prop trading firm only uses capital from its balance sheet. As prop trading firms do not work for investors, they have more flexibility when making investment decisions.
LegendaFX is a new breed of prop trading firm offering anyone from anywhere the opportunity to become a prop trader through our funded trader programs.
What is a Funded Trader Program?
Funded trader programs are the latest innovation in the prop trading industry and the most popular pathway to becoming a prop trader.
We launched our funded trader program to embrace the emerging remote working and gig economy culture to reach a talent pool of experienced traders, especially the hundreds of thousands of self-taught traders scattered across the globe.
However, before we can onboard and fund new traders, we need to verify their trading capabilities; that’s how the funded trader concept was conceived.
How the Funded Trader Program Works
Many Prop Firms, including ours, charge an evaluation fee for those who want to trade for our firm. This evaluation fee basically covers the administrative costs to review their trading performance.
During the evaluation, traders are not trading with real funds yet. The evaluation takes place on a demo account, sometimes referred to as paper trading. To pass the evaluation, a trader needs to demonstrate that they can follow strict risk management rules and meet profit targets. Once they do pass, they can then trade live with capital provided by the firm.
Trading with LegendaFX
At LegendaFX, we offer multiple products, with and without the evaluation process, to cater to the different needs and objectives of various traders, new and seasoned. If you are just dipping your toes into the world of Prop Trading, the Evaluation Program is more suitable for you. Pass the 2-stage evaluation process in this program and you can trade live for LegendaFX.
However, if you are confident with your trading skills and want to dive straight into Live Trading, check out our Instant Funding section.
We also offer an unlimited reset evaluation alternative for those who are not comfortable enough to trade live but are struggling with the Evaluation programs. With Unlimited Reset, you can restart the evaluation process with a fresh account each time you exceed the maximum loss allowed. For more details, check out our Unlimited Reset section.
How to Become a Prop Trader?
As of 2022, the most common pathway to becoming a prop trader is to cooperate with a firm like LegendaFX that specialises in working with forex traders. The first step is to enrol for an initial evaluation, a process which typically lasts between one and three months, or apply for an instant funding account.
To pass the evaluation, you’ll need to trade frequently and reach profit targets while not exceeding drawdown limits.
Once you start and grow your trading account, you’ll be given additional funds to manage. With more capital, you can open larger positions or more trades, increasing your profitability.
The best part of all is that as a LegendaFX prop trader, you get to keep 50% of the profits you generate. There is no limit to how much you can earn.
Why You Should Become a Prop Trader
If you’re an experienced trader and want to take things to the next level, trading with a prop firm is one of the only ways to trade with someone else’s money without requiring a special license as a money manager or financial adviser. Start your prop trading journey with LegendaFX today.