Prop Firms Without Fees - The Forex Geek (2024)

Proprietary (Prop) firms without fees try to offer an attractive opportunity for Forex traders looking to leverage their skills in the highly volatile foreign exchange market. These firms try to provide trading capital to traders, trying to allow them to trade on the firm’s account and share potential gains, without requiring an upfront fee. Typically, such firms conduct a thorough evaluation of a trader’s skills, often through a challenge or demo period, before offering a funded account.

The no-fee structure of these prop firms tries to reduce the financial barrier for traders, especially those starting in the Forex market. It also allow skilled traders to trade significant sums without risking personal assets, thus trying to provide an opportunity to earn substantial potential opportunities. However, these firms usually have rigorous performance expectations and risk management rules to try mitigating their financial exposure.

Structure

Proprietary (Prop) Firms Without Fees are unique entities in the trading world that try to offer traders the opportunity to trade on the firm’s account without requiring an upfront fee or capital contribution. Their structure revolves around specific elements that differentiate them from traditional prop firms.

• Capital Provision: The distinctive feature of no-fee prop firms is that they try to provide the trading capital. Instead of traders using their own funds, the firm tries to allocate a specific amount of capital that traders can use to execute trades in the Forex market. The amount of capital provided can vary from firm to firm and is often linked to the trader’s skill level and consistency.
• Selection Process: Before providing the trading capital, these firms usually conduct a selection process that involves a demonstration of a trader’s skills. This often takes the form of a challenge or demo period, where traders must hit specific potential targets while adhering to predefined drawdown limits. Successful completion of this phase tries to lead to the allocation of the firm’s capital for trading.
• Profit Sharing: Potential gains generated through trading are typically split between the firm and the trader. The split can vary, but it often ranges between 50/50 and 70/30 in favor of the trader. The exact split is usually outlined in the contractual agreement between the trader and the firm.
• Performance Evaluation: Regular performance evaluations are conducted to try assessing the trader’s potential results and adherence to risk management rules. Traders who try to consistently generate potential trades and follow risk guidelines may be rewarded with increased capital for trading.

Selection Process

• Demonstration of Trading Skills: Initially, traders are required to try demonstrating their trading abilities. This is often done through a trading challenge or a trial period, where traders are given a demo account with virtual capital. The firm sets specific potential targets and maximum drawdown limits to gauge a trader’s skill level, understanding of market dynamics, and ability to manage risks.
• Evaluation Period: The duration of this evaluation period varies among firms, but it typically lasts a few weeks to several months. During this time, the firm tries to observe not only the trader’s ability to generate potential trades but also how well they handle drawdowns and adhere to risk management rules.
• Potential Targets and Drawdown Limits: Traders need to try reaching a specific potential target within the evaluation period while keeping their drawdown (peak-to-trough decline during a specific period) within a defined limit. The exact figures vary among prop firms but are usually explicitly stated at the beginning of the selection process.
• Trading Behavior: Firms often try to look beyond just numerical targets. They also try to consider trading behavior and strategies, ensuring traders are not employing high-risk strategies to meet the targets. The firm may also try to assess how traders react to losing positions and whether they adhere to stop-loss rules.
• Approval and Fund Allocation: Traders who successfully complete the evaluation period by hitting the potential target and respecting the drawdown limit are typically offered a funded account.

Risk Management

• Trading Limits: Prop firms try to impose various trading limits to control risk. This may include daily drawdown limits, maximum drawdowns, or stop-out levels. These limits are designed to try preventing a trader from incurring significant drawdowns that could endanger the firm’s capital.
• Monitoring of Trading Activities: Regular monitoring of trading activities tries to help prop firms identify potential risks. This might involve scrutinizing individual trades, checking for consistency in trading strategy, and trying to ensure that traders aren’t engaging in high-risk trading practices.
• Leverage and Position Size Control: The firms control the amount of leverage and the size of the positions that traders can take. This tries to help to manage the potential drawdowns that the firm can incur from any single trade.
• Compliance with Regulatory Guidelines: Prop firms must comply with the regulatory guidelines set by financial regulatory bodies. This includes guidelines on risk management that are designed to protect the financial stability of the firm and the broader financial market.
• Periodic Review and Adjustments: Risk parameters are often reviewed and adjusted based on the trader’s performance, market conditions, and regulatory changes. For instance, a trader who consistently generates potential trades and adheres to risk guidelines may be granted higher trading limits, while traders who fail to comply with risk management rules may face reduced limits or termination of their trading account.

Profit Sharing

• Profit Split: Potential results generated through trading are divided between the firm and the trader. The split varies among firms but often ranges between 50/50 and 70/30 in favor of the trader. This means that traders receive a substantial portion of the potential gains they generate using the firm’s capital.
• Payment Schedule: The schedule for payouts also varies among firms. Some firms might distribute payments monthly, while others might do so quarterly. Traders are typically informed about the payout schedule in advance.
• Performance-based Adjustments: In some firms, the profit split can be adjusted based on a trader’s performance. For instance, traders who consistently try to generate potential trades over time might receive a larger share of the potential gains.
• Drawdowns and Recovery: In the event of a drawdown, most prop firms without fees do not require traders to reimburse the drawdown from their share of gains. The firm absorbs the drawdown and adjusts the trading limit or risk parameters to prevent further drawdowns. However, traders are typically expected to recover the drawdown from future potential trades before they can receive their share.

Benefits

• No Upfront Capital: The most obvious advantage is the elimination of the upfront fee or capital contribution. This opens up opportunities for talented traders who might not have the financial resources to start trading on their own.
• Access to Larger Capital: Traders are given access to larger capital than they might be able to leverage individually, thus trying to enable them to potentially generate higher gains.
• Shared Risk: As the trading capital is provided by the firm, the financial risk is borne largely by the firm and not the trader.
• Learning and Development: Many prop firms try to offer resources for learning and development, including access to experienced traders, training programs, and analytical tools, which can try to help improve a trader’s skills.
• Profit Sharing: Profit sharing arrangements can try to provide traders with substantial income. Potential traders can try to earn a significant portion of the potential gains they generate using the firm’s capital.
• Regulatory Compliance: Prop firms are generally compliant with regulatory standards and try to provide a legal framework for trading, reducing the regulatory burden on individual traders.

FTMO

FTMO has designed a unique, two-tiered Evaluation Course, tailor-made to try identifying promising trading talents. This evaluation involves two stages – the FTMO Challenge and Verification, which are tried to aim for testing your trading skills and discipline.

Successful completion of this Evaluation Course tries to open the door to a position within FTMO’s Proprietary Trading firm, where you are given the opportunity to remotely manage an FTMO Account. The trading capital provided can be as high as 400,000 USD. The path to this point may be demanding, but you will be supported by educational resources, account analysis tools, and a performance coach to try guiding you towards financial independence.

FTMO Challenge

The FTMO Challenge is the preliminary step of the Evaluation Process. You must try demonstrating your trading skills and discipline in meeting the Trading Objectives to move forward to the Verification stage.

Verification

The Verification stage is your final hurdle to becoming an FTMO Trader. Once you have passed this stage and your results are confirmed, you will be offered a position to trade for the FTMO Proprietary Trading Firm.

FTMO Trader

Upon becoming an FTMO Trader, you are expected to trade responsibly and consistently to receive up to 90% of your potential gains. If you try to demonstrate consistent potential trades on your FTMO Account, your account may be scaled up in accordance with the firm’s Scaling Plan.

Before you are allowed to trade for the firm, FTMO must confirm that you are capable of managing risk effectively. Therefore, Trading Objectives have been developed as a means of try proving your discipline and trading experience. Your trading style is entirely your own choice; FTMO places no restrictions on the instruments you trade or the size of your positions.

Achieving an FTMO Account does not signify the end of your development within the project. In fact, it’s quite the opposite. You can learn about the principles of capital increments on this page. A larger account balance tries to allow you to scale up your positions without assuming higher risks.

The process of capital increments on an FTMO Account follows a four-month cycle. For a capital increase, you are expected to generate a minimum net potential gain of 10% (20% for an Aggressive account type) over four consecutive monthly cycles (i.e., an average of at least 2.5% net potential gain per month for a standard account type or 5% net potential gain per month for an Aggressive account type). Concurrently, you must try to process at least 2 payouts within this 4-month period.

Eligibility for scaling up is automatically evaluated, and you will receive a detailed breakdown of your progress and the requirements each time a Profit Split is processed. If you meet the criteria, you can request to have your account scaled up during your Payout processing, and the platform will assign you a larger FTMO Account for the following trading period.

Your drawdown limits will adjust accordingly with the scaling-up process, and the calculation of drawdown limits remains unchanged (5% Max Daily Drawdown/10% Max Drawdown of the initial account balance after scaling up). After another 4 months, if you meet the account growth conditions and have processed the required 2 payouts, you will be eligible for a further 25% increase of the demo capital in your FTMO Account. However, the increment of demo capital is capped at $2M per trader ($1M for Aggressive accounts).

FTMO Traders on the scale-up plan enjoy an upgraded Profit Split ratio of 90/10. The enhanced Profit Split applies to newly scaled-up accounts, not newly merged accounts with accounts already on the scale-up plan. If you choose to combine a non-scaled-up account with a scaled-up account, the Profit Split ratio adjusts to 80/20.

TopStep

THE JOURNEY: Rising From Trials

TopStep founder, Michael Patak, began his trading journey facing several challenges. After depleting three brokerage accounts, he found the key to try for constant performance. His past experiences inspired the creation of an innovative platform where traders can try to refine their skills and participate in live capital trading without risking their life savings.

THE LEGACY: Origin of Top Step

In the old days, the potential pit traders were honored with the title of “Top Step”, a prominent label trying to allow them to be at the highest level of the trading pit. This vantage point tried to enable a comprehensive view of all activities and better access to orders compared to the traders in the lower echelons of the pit.

THE EVOLUTION: A Trailblazer in Trading

Initially born as Patak Trading Partners in 2012, their mission was explicit—to try providing a haven for traders to professionalize their passion. As they evolved into TopstepTrader, the platform tried to initiate the Trading Combine, a funding opportunity for retail traders. Today, under the name Topstep, the platform tries to persist in assisting traders worldwide to reshape their mindset and attain consistent potential without risking their own capital.

THE GROWTH: Unceasing Progress

Topstep has tried to empower thousands of traders globally, disbursing millions in withdrawals. They have made their mark on the Inc. 5000 list of America’s rapidly growing private companies, been recognized as one of Crain’s 100 Best Places to Work in Chicago, and tried to made a national impact on the Deloitte Technology Fast 500 list. Although they are proud of they accomplishments, they always have an eye on the future and what it holds.

THE OPPORTUNITY: Earning Through The Trading Combine

What is the Trading Combine?

The Trading Combine is a novel learning and evaluation program for futures traders. It tries to provide a platform for traders to enhance and validate their skills in simulated markets and also try to earn funding upon achieving certain trading benchmarks. Regardless of experience, traders can try to take benefit from the discipline and habit-building methods of the Trading Combine.

Trading Plan and Objectives

A key aspect of TopStep Trading Combine is adherence to the trading plan, the primary rule of which is the Maximum Loss Limit (MLL). A breach of the MLL results in a rule violation. Topstep’s MLL is computed based on your end-of-day balance, unlike other prop firms which rely on intraday unrealized potential gains. They take pride in trying to offer the industry’s best drawdown and provide traders with substantial room to trade. Other objectives they try to encourage traders to follow include Potential Target, and Daily Drawdown Limit.

TopStep VISION: Elevating Lifestyles

TopStep aspiration is to try serving as a beacon, illuminating a path towards an enhanced quality of life.

TopStep MISSION: Refining Traders

TopStep tries to aim to transform enthusiasts of trading into polished traders. They try to promote healthier habits and also tries to ensure a deep understanding of trading through a model of learning by doing.

TopStep VALUES: Guiding Principles

• TopStep Team’s Well-being: TopStep tries to hold their team’s welfare close to their hearts and deeply care about their well-being.
• Motivation & Development: TopStep continually strive to inspire and cultivate the skills of their traders.
• Diversity: TopStep welcome a multitude of perspectives and appreciate the richness of thought they bring.
• Accountability: TopStep tries to foster a culture of taking responsibility for one’s actions and driving outcomes.
• Feedback: TopStep tries to regard feedback as a crucial instrument for both personal and professional growth.
• Learning: TopStep believe that learning is an unending journey, and they are always on the quest for improvement and growth.

THE TOOLS: Available Trading Platforms

TopStep tries to offer two major platforms for trading:

NinjaTrader

• Compatibility: Windows
• Third-party add-ons: Yes
• Platform fees: $0 in SIM, discounted in Funded
• Commissions in the Funded Account: $0.53/contract

Quantower

• Compatibility: Windows
• Third-party add-ons: Yes
• Platform Fees: Free for Topstep Traders
• Commissions: $0.53/contract

THE SUPPORT: Free Coaching

TopSteop are entirely devoted to trader’s success as a Topstep Funded Trader and tries to provide complimentary coaching tailored to their needs.

TopStep Approach to Coaching

TopStep unique coaching methodology, Prep–Trade–Reflect, tries to aim to simplify the process of establishing daily trading habits, thereby helping the traders achieve consistent performance.

Group Coaching

Engage with other traders in their Group Coaching sessions, where the traders can try to discuss current market trends and have their questions answered live by futures trading veteran, John Hoagland.

One-on-One Coaching

Take advantage of regular personalized sessions with an expert to try to dissect trader’s trading strategy, risk management techniques, and the mindset required for consistent potential trading.

The 5ers

The 5%ers – Providing Unparalleled Funding Opportunities

Instant Funding in Live Accounts

The 5%ers set themselves apart by trying to offer an unrivaled funding program that eliminates qualification phases. From day one, you’ll be able to try operating with real capital, bringing authenticity to your trading journey.

Simultaneous Earnings and Expansion

Experience the convenience of instant payouts with just a click. Additionally, you can try to anticipate growth as your funded trading account size doubles with each milestone. And the cherry on top? Your payout doesn’t get subtracted from your balance when reaching these milestones.

Superior Trading Environment

Trading conditions with the 5%ers are in a league of their own. They try to permit overnight and over-the-weekend holdings for forex and metals, along with news and algorithmic trading. As an exclusive forex currencies fund without any CFDs, they try to guarantee low commissions, tight variable spreads, high-quality market executions, and the usage of Metatrader 5.

Nurturing a Vibrant Traders Community

Join 5%ers thriving community of potential traders, trying to provide a unique platform to exchange ideas, seek advice, and gain valuable feedback.

All Trading Styles Celebrated

At the 5%ers, the platform tries to champion diversity in trading styles. Their funding program is flexible, designed to try accommodating any strategy.

Accelerated Growth Plan

Experience 5%ers unrivaled growth plan that doubles your account size at each milestone, up to $4 million. Meanwhile, enjoy regular payouts every potential month.

No Rush, Only Growth

The 5%ers funded trading programs are pressure-free, with manageable milestone targets spread over reasonable timelines. They try to provide clear and straightforward trading objectives.

Minimal Participation Cost

The only cost you need to bear is a one-time fee. The 5%ers try to promise transparency with no hidden costs, no recurring charges, and definitely no fine print.

Access to Trading Resources

Enjoy unlimited access to 5%ers daily trading rooms, educational resources, webinars, and a network of professional traders, all designed to try taking your trading skills to new heights.

5%ers Support You

Your success is the 5%ers success. They are always ready to try providing assistance via phone, live chat, email, or form submission.

An Immersive Trading Experience with the 5%ers

Live Trading Room

Experience a sense of camaraderie in the 5%ers daily live trading rooms. Interact, analyze the markets, trade, ask questions, and share market visions and trading opportunities four times a week.

Trading Performance Statistics

Keep track of your performance through your personal dashboard, trying to display your progress in a user-friendly format with insightful metrics.

Free Webinars

Take advantage of the 5%ers free webinars and lectures where they try to share their expertise on a multitude of topics, including Supply and Demand, Scalping, Swing Trading, Risk Management, and more.

Real-Time Trading Notifications

Stay informed with important market events and specific account information delivered directly to your email.

Risk Management and Trading Plan Education

Get access to the 5%ers proprietary trading course, designed to try elevating your trading capabilities. Dive into topics such as Trading Planning, Advanced Risk Management Techniques, and Trading Psychology.

Complimentary 1-on-1 Performance Coaching

As a 5%ers trader, you may try to gain access to a dedicated Portfolio Analyst. These sessions try to provide an opportunity to enhance your trading performance, overview your trading plan, and tune your system to the 5%ers parameters.

Extensive Reading Resources

The 5%ers forex blog is a treasure trove of in-depth and professional articles designed to try enhancing your trading knowledge.

Support by Traders for Traders

You’re never alone in your journey. The 5%ers support team of fellow traders is always available to try assisting you via telephone, live chat, email, or form submission.

Final Thoughts

In conclusion, Proprietary Trading Firms or “Prop Firms” that operate without fees try to offer an attractive path for aspiring traders. These firms try to provide a unique blend of financial support, hands-on experience, and professional guidance. Key players such as Topstep and The 5%ers have try to set impressive benchmarks in the industry. They try to offer traders the opportunity to trade with real capital from day one, thus significantly reducing personal financial risk.

These firms prioritize trader growth by doubling their trading accounts at every milestone, trying to allow traders to progress at their own pace, and encouraging diversity in trading styles. They try to offer low participation costs, with transparent fee structures that usually involve only a one-time payment.

Beyond the financial backing, these firms also try to provide a wealth of resources including trading rooms, educational content, webinars, and a thriving community of fellow traders. Notably, they try to provide a supportive environment for learning and growth, with performance coaching and personal analytics to try helping traders improve their strategies and trading habits.