There are a lot of talented and astute traders in the world who could make a living trading currencies, securities, or commodities, but they need one essential thing. They lack enough capital to give their trading careers a real go. Far too many people need to realize there is extra capital available for investors who can make the grade with a prop trading firm.

Imagine sitting on the investment sidelines with a solid trading strategy but less capital than you need to start as a pro trader. It is time to look into “proprietary trading” firms and how they can boost your trading career.

What is a Prop Trading Firm?

For decades, banks and investment firms were satisfied to serve as trading facilitators for their customers. They would provide the investment platform, help initiate trades, and collect fees and commissions.

In recent years, these same banks and investment firms have realized that there is another source of revenue out there if they could tap into the skills of their best investors. Pursuing this extra revenue led to the creation of the prop trading concept. It works as follows.

An investor applies to become a prop trader with a bank or investment firm that has registered to be listed as a prop firm. Once the investor and the prop trading firm reach an agreement, the investor opens a trading account and makes an initial deposit. Per the prop trading agreement, the prop firm also deposits as much as 4x the amount the investor deposited.

Once the trading account is fully funded, the investor starts trading. As the profits roll in, they are shared between the investor and firm as per the prop trading agreement.

Your Path to Integration into a Prop Trading Firm

If this concept appeals to you and motivates you to become a pro-prop trader, you have some work to do. You must take specific steps to make a path for yourself in the prop trading world. Here are some tips on how to get started.

Prove Yourself as an Astute Trader

As you enter this realm, you need to understand what will happen. Essentially, a high-profile prop trading firm is about to invest in you with their capital. They don’t invest in people who cannot represent some level of success as a trader.

Before starting this process, you need to hone your trading knowledge and skills and employ investment strategies that consistently create profits.

Find the Right Prop Trading Firm

Once you have a good track record of trading, you can start looking for a trading firm with which to work. At the least, you need to stay with firms that are properly licensed and registered as prop trading firms. It’s also suggested that you focus on firms with much experience in this investment realm.

Past Muster With a Trading Firm

Here is what most people miss. You must get past an interview process before any prop trading firm will bring you into the fold and give you capital. The key things that they like to focus on include your trading background, your personality, and your motivation to work hard.

Secure Your Prop Trading License

While you are interviewing, there are tests you need to pass and licenses you need to secure. The main licensing exams you must take and pass are the SIE and the Series 57 Top-Off Exams.

Find a Mentor and Start Trading

After getting your licensing and acceptance at a firm, don’t be cocky. They will be watching their investment in you. You can do yourself a big favor by seeking mentoring from an experienced prop trader with a solid track record. You’ll find there are a lot of astute prop traders who would be happy to share their knowledge.


There you have it. If you follow the tips listed above and do the work, there is an excellent chance you will find the satisfaction you seek by going from beginner to pro as a licensed proprietary trader. The ball is in your court.