Here’s the thing about getting into prop trading: most people overthink it. They spend weeks researching, comparing spreadsheets, reading reviews, and never actually start.
This blueprint cuts through the noise. It’s the exact process you need to follow from “I’m interested in prop trading” to “I’m getting paid to trade someone else’s capital.”
No fluff. No theory. Just the actual steps that working prop traders follow.
Step 1: Understand What You’re Actually Getting Into
Before you drop a few hundred bucks on an evaluation, let’s be clear about what prop firms actually are and why they exist.
The prop firm model is brilliant (for both sides):
You get access to $25K-250K in buying power without risking your own capital. The firm gets a cut of your profits (usually 10-20%) in exchange for providing that capital and taking on all the risk.
The biggest benefits:
- Zero capital risk – Your personal money never enters the equation. You pay evaluation fees ($100-500), not account minimums
- Low entry barrier – Most challenges cost less than $200/month. Compare that to the $25K minimum for pattern day trading stocks or $50K+ you’d realistically need to make a living trading your own account
- High profit splits – You keep 80-90% of everything you make, with some firms even offering 100% profit splits after you prove yourself
- Professional infrastructure – Access to platforms, data feeds, and trading tools that would cost thousands per month independently
But here’s what nobody tells beginners:
Getting funded is the easy part. Staying funded is where 70-80% of traders fail. The rules that seem simple on paper, daily loss limits, profit targets, consistency requirements, become psychological warfare when real money is on the line.
More on that later. For now, just understand: prop firms aren’t charities. They make money by taking a cut of profitable traders AND by collecting evaluation fees from traders who fail. Your job is to be in the first group.
Step 2: Prop Firm vs. Regular Brokerage Account (The Math That Matters)
Let’s do some honest comparison here because this is where the lightbulb usually goes off.
Traditional path (using your own capital):
Say you open a futures trading account with a standard broker. The minimum is typically $500-1,000, but let’s be real, you can’t actually trade meaningfully with that.
Here’s why: If you want to trade one E-Mini S&P 500 contract (ES), you need about $13,000 in initial margin. But if your very first trade goes against you by just a few points, you’re below maintenance margin and you get margin called. Can’t trade anymore.
So realistically, to trade ONE contract safely, you need about $5,000-10,000. To trade 2-3 contracts (which is where you can actually make decent money)? You’re looking at $25,000-50,000 minimum.
And if you blow that account? You’re starting from scratch. With your own money. Again.
Prop firm path:
You pay $150-500 for an evaluation that gives you access to a $50K-100K account (sometimes more). If you pass, you’re trading 2-10 contracts depending on the firm’s rules. If you mess up, you’re only out the evaluation fee, not your life savings.
The prop firm fee structure is simple: pay upfront for the evaluation, and once funded, the firm takes 10-20% of your profits. That’s it. No hidden fees (well, except for CME exchange fees if you’re trading as a funded trader, but that’s standard across the industry).
Here’s the comparison table:
| Traditional Broker | Prop Firm | |
|---|---|---|
| Initial capital needed | $5,000-50,000+ | $150-500 (evaluation fee) |
| Risk if you fail | Lose your capital | Lose evaluation fee only |
| Buying power | Limited to your deposit | $25K-250K depending on firm |
| Profit split | Keep 100% | Keep 80-100% |
| Can retake if you fail? | Need to save up more money first | Yes, immediately (just pay new evaluation fee) |
| Professional trader status | No | Yes (affects exchange fees) |
The prop firm model just makes more sense for 95% of aspiring traders. You get massive leverage without the massive capital requirements.
Step 3: Know The Risks (And They’re Real)
Okay, so prop firms sound amazing. And they are, if you understand what you’re signing up for.
Risk #1: You Have to Pass the Evaluation First
This is the filtering mechanism. To get funded, you need to:
- Hit a profit target (usually 6-10% of account size)
- Follow all trading rules (daily loss limits, max position sizes, etc.)
- Trade for a minimum number of days (typically 5-10)
- Sometimes maintain consistency in your daily profits
Statistically? About 20-35% of traders pass on their first attempt. That number goes up with experience, but it’s still the biggest hurdle. Some people spend $500-2,000 in failed evaluation fees before finally getting funded. Others give up.
Risk #2: Different Firms Have Different Rules (And They Matter)
Here’s where most beginners screw up: they pick a firm based on price or profit split without actually understanding the rules.
Some firms have consistency rules that limit how much you can make on your best trading day (usually 30-50% of total profits). Others use trailing drawdowns that move with your account balance, making it harder to take meaningful risks.
There are also rules about:
- What instruments you can trade (some only allow certain futures contracts)
- Holding positions overnight (some firms prohibit it entirely)
- Trading during news events (many firms have restrictions)
- Maximum position sizes (can’t just YOLO 10 contracts on one trade)
Breaking ANY of these rules = instant disqualification. No appeals. No second chances. You’re out.
Risk #3: Funded Account Fees Can Add Up
During the evaluation phase, everything is usually included in your monthly fee. Simple.
But once you get funded, you become a “professional trader” in the eyes of the exchanges. That means higher CME exchange fees.
Most traders pay about $80-200/month in exchange fees depending on what they trade. Not a dealbreaker, but something to budget for. The good news? These fees are tax-deductible as business expenses. The bad news? You still have to pay them upfront every month.
Some firms also charge platform fees, data fees, or monthly account fees once you’re funded. Always read the fine print on prop firm payouts and fee structures before committing.
Risk #4: You Can Lose Your Funded Account
Getting funded doesn’t mean you’re set for life. You still have to follow the rules, and if you violate them, you’re back to square one, paying for another evaluation.
The most common ways funded traders blow it:
- Revenge trading – Taking bigger risks to make back losses, violating daily loss limits
- Overtrading – Trading too frequently or with too large position sizes
- Ignoring rules – “Just this once” becomes your downfall
- Not adapting – Using the same strategy that worked in evaluation but doesn’t work in live markets
About 40-60% of funded traders lose their accounts within the first 3-6 months. The ones who survive? They treat it like a job, not a casino.
Step 4: Choose Your Tradeable Asset (Before Choosing Your Firm)
This is backwards from what most people do. They pick a firm first, then realize they can’t trade what they want. Do it in this order:
What Do You Want to Trade?
Most popular: Equity index futures
- E-Mini S&P 500 (ES)
- Micro E-Mini S&P 500 (MES)
- Nasdaq 100 (NQ) or Micro Nasdaq (MNQ)
Why? High liquidity, tight spreads, tons of educational content available. About 70% of prop traders start here.
Also common: Commodities
- Crude oil (CL)
- Gold (GC)
- Natural gas (NG)
These move more than equity indices, which means bigger profit potential BUT also bigger risk. Not recommended for beginners unless you have specific experience here.
Less common but available: Currency futures and interest rate futures
These are more specialized. If you don’t already know why you’d trade these, stick with equity indices.
Match Your Asset to Your Firm
Once you know what you want to trade, verify that your chosen firm:
- Allows that instrument during evaluation
- Allows it in funded accounts (sometimes these differ)
- Doesn’t restrict position sizes so much that your strategy won’t work
Most futures prop firms support all major CME contracts, but always double-check. Nothing worse than paying for an evaluation, then realizing you can’t trade crude oil.
Pro tip: Consider liquidity and fees
- More liquid markets = tighter spreads = easier to get in and out
- Check the fees per round trip (one buy + one sell)
- Factor in tick value (how much each price movement is worth)
If you’re not sure what to trade? Start with MES (Micro E-Mini S&P 500). It’s 1/10th the size of ES, so you can learn without massive risk, and literally every prop firm supports it.
Step 5: Choose The Right Prop Firm (This Actually Matters)
Okay, you know what you want to trade. Now let’s find the firm that matches your goals and trading style.
Don’t just pick the cheapest evaluation. That’s like buying a car based only on the sticker price without checking MPG, reliability, or whether it even has seat belts.
What to Compare:
1. Evaluation difficulty
- Profit targets (6% is easier than 10%)
- Daily loss limits (some firms don’t even have these)
- Minimum trading days (4 days vs. 10 days makes a huge difference)
- Consistency requirements (do they limit your best day?)
2. Profit splits
- Industry standard: 80/20 (you get 80%, firm gets 20%)
- Best offers: 90/10 or even 100/0 after proving yourself
- Red flag: Anything worse than 70/30
3. Payout terms
- How often can you request payouts? (Weekly, bi-weekly, monthly)
- Minimum payout amounts
- Processing time (some take 2 weeks, others process in 24-48 hours)
- Any restrictions on your first few payouts?
4. Scaling opportunities
- Can you get multiple funded accounts?
- Do they offer account size increases after consistent profits?
- What are the requirements to scale up?
5. Reputation and track record
- How long have they been in business? (Newer isn’t always bad, but 3+ years is reassuring)
- What do funded traders say? (Check Trustpilot, Reddit, Discord communities)
- Any history of payment issues or rule changes?
Recommendations by Goal:
If you want the easiest evaluation to pass: Look for firms with:
- Lower profit targets (6-8% vs 10%+)
- No daily loss limits (only drawdown limits)
- Shorter minimum trading days (4-5 days vs 10)
- No consistency rules
Example firms: Check our best one-step challenges for the fastest path to funding.
If you want maximum profit potential: Look for firms offering:
- Multiple funded accounts allowed
- Account size increases based on performance
- Higher account size options ($150K-250K)
- Better profit splits (90/10 or 100/0)
If you want long-term stability: Look for firms with:
- Established track record (3+ years minimum)
- Transparent rules (clearly published, not constantly changing)
- Good customer support (responsive, helpful)
- Positive community feedback
If you’re on a tight budget: Look for firms with:
- Lower evaluation fees ($99-150 range)
- Monthly payment options vs. upfront
- Refundable evaluation fees upon first payout
- 50K funded accounts as your starting point
See the full comparison: Browse all prop firms or filter by futures firms and forex firms if you’re trading FX.
Step 6: Trade By The Rules (Seriously, Read This Twice)
This should be simple, right? The firm gives you rules, you follow them, everyone wins.
But here’s why 80% of traders fail:
They understand the rules intellectually but don’t internalize them emotionally. When you’re up big and feeling confident, or down and wanting to make it back, that’s when the rules go out the window.
The Rules Every Prop Firm Has:
1. Daily loss limit Maximum you can lose in a single trading day. Violate this? Evaluation over. Account gone.
Most firms set this at 3-5% of starting balance. On a $50K account, that’s typically $1,500-2,500. Sounds like a lot until you’re trading 2-3 contracts and the market moves against you fast.
2. Max drawdown (trailing or static) The maximum your account can drop from its peak value. This is the one that kills most traders because it follows you up as you make profits.
Example: You start with $50K. Make $5K. Now your peak is $55K, and your max drawdown limit adjusts upward. If the rules say 10% trailing drawdown, you can’t drop below $49,500 (55K minus 10%) without losing your account.
Learn more about trailing drawdowns here.
3. Profit target How much you need to make to pass evaluation or qualify for payout. Usually 6-10% of starting balance.
Sounds easy. It’s not. That’s because of rules 1, 2, and 4 combined.
4. Minimum trading days You can’t hit your profit target in one day (well, you can, but the firm won’t let you). Most require 5-10 separate trading days to prove you’re not just gambling.
5. Position size limits You can’t trade 10 contracts on a $50K account. Most firms limit you to 1-3 contracts depending on what you’re trading and account size.
6. Consistency rule (some firms only) Your best trading day can’t be more than X% of your total profits. Usually 30-50%.
Why? They don’t want one-hit wonders. They want consistent traders. Detailed explanation of consistency rules.
7. Trading restrictions
- Holding overnight (some firms prohibit, others allow)
- News trading (many firms restrict trading during major economic releases)
- Specific instruments (some contracts prohibited)
- Weekend trading (usually not allowed)
How to Actually Follow The Rules:
Write them down. Physically. On paper. Next to your monitors.
The number of traders who fail because “I forgot about the daily loss limit” is embarrassing. Don’t be that person.
Set alerts in your trading platform for:
- When you’re down X amount (ideally 50-70% of your daily loss limit)
- When you’re approaching position size limits
- When you’re near max drawdown
Have a stop-out plan before you start trading each day:
- “If I’m down $X, I’m done for the day. No exceptions.”
- “If I violate any rule by even $1, I stop immediately”
Review the rules before EVERY trading session. This sounds excessive. It’s not. The moment you get comfortable is the moment you screw up.
Step 7: Pass The Evaluation and Get Funded
Alright, you’ve chosen your firm, paid your evaluation fee, and you know the rules. Now what?
Evaluation Period Strategy:
Days 1-3: Be conservative
- Trade your smallest position sizes
- Focus on high-probability setups only
- Goal: Prove you can follow rules and not blow up
- Don’t worry about the profit target yet
Days 4-7: Build profit gradually
- Increase position size slightly (still within rules)
- Make consistent small wins rather than shooting for the target in one day
- Track your progress vs. minimum trading days requirement
Days 8+: Close it out
- Once you’re close to profit target (within 1-2% usually), focus on consistency
- Don’t force trades just to hit minimum days if you’re already there
- Better to take 10-12 days and pass than rush it in 5 days and fail
Common Evaluation Mistakes:
❌ Trying to hit profit target in first 2-3 days – You get overconfident, overtrade, hit daily loss limit ❌ Revenge trading – One losing day, you try to make it back immediately, violate rules ❌ Ignoring consistency rules – You make 80% of profit in one massive day, fail consistency check ❌ Trading too many instruments – Stick to ONE market you know well ❌ Not tracking your stats – You think you’re fine, but you’re actually 1% away from max drawdown
What Successful Evaluation Traders Do:
✅ Trade their proven strategy – Not the time to experiment ✅ Use proper position sizing – Usually 1-2 contracts max ✅ Take days off – If you’re up nicely and feel off, don’t trade ✅ Journal everything – Write down why you took each trade, review at end of day ✅ Stop early if killing it – Hit 8% profit in 7 days? Stop. Don’t risk it.
Once You Pass:
You’ll get notified (usually within 24-48 hours) that you’re approved for funding. Most firms require you to:
- Sign a funded trader agreement
- Sometimes pass a KYC check (ID verification)
- Pay any account activation fees (not all firms have these)
- Review the funded account rules (sometimes different from evaluation rules)
Then boom, you get access to your funded account. Usually the same login, just upgraded account type.
Step 8: Trading The Funded Account (Where The Real Challenge Begins)
Congratulations! You passed your evaluation. You’re now trading someone else’s capital, keeping 80-90% of profits, and can finally make real money.
This is where most people fail.
Why? Because the psychology changes completely. During evaluation, you had “nothing to lose” (just the evaluation fee). Now you have a funded account that took effort to get, and losing it means starting over.
Key Differences in Funded Accounts:
1. Rules might change Some firms ease restrictions once you’re funded (no more consistency rules, higher position sizes allowed). Others add restrictions (scaling plans, withdrawal limits for first few payouts).
Re-read the funded account rules carefully. Don’t assume they’re the same as evaluation.
2. You’re paying exchange fees now As mentioned earlier, funded traders typically pay $80-200/month in CME fees depending on volume. Budget for this. It’s not the firm’s fault, it’s just how exchanges work.
3. Pressure is different In evaluation, you could always retake. In funded account, losing it means you’re back at evaluation. The mental game changes. Traders who don’t adapt usually self-destruct within 60 days.
How to Stay Funded Long-Term:
Strategy #1: Trade smaller than evaluation
Yeah, you read that right. Most successful funded traders actually reduce their risk once funded.
Why? Because the goal shifted. In evaluation, goal = hit profit target fast. In funded account, goal = stay funded forever and compound profits.
Trade 1 contract instead of 2. Take fewer setups. Be more selective. Boring = profitable.
Strategy #2: Withdraw early and often
Most firms let you request payouts every 2 weeks or monthly. Do it.
Even if you only made $500, withdraw it. Why?
- Proves the firm actually pays (if they don’t, you know early)
- Locks in gains (can’t lose withdrawn profits)
- Builds confidence
- Forces you to think of this as a business, not a game
Strategy #3: Have a stop-out rule
Set a daily stop-loss that’s well UNDER the firm’s daily loss limit. If you’re allowed $2,000 daily loss, your personal stop should be $1,000.
Hit that? Done for the day. No exceptions.
Strategy #4: Diversify across firms
Once you’ve been funded for 3-6 months and consistently profitable, get funded with a second firm. Then a third.
Why?
- If you lose one account, you’re not starting from zero
- You can scale buying power without violating position size limits
- Reduces dependency on any single firm
Many professional prop traders run 2-4 funded accounts simultaneously. It’s the smart move.
Strategy #5: Follow scaling plans (if applicable)
Some firms have required scaling plans once funded. Example: You must trade 1 contract for first month, then can increase to 2 contracts, then 3, etc.
Follow these exactly. Don’t try to circumvent them. Firms implement them because they work, traders who scale too fast blow up.
Step 9: Plan For Taxes and Treat This Like A Business
You’re making money trading a funded account. That’s awesome. Don’t forget, Uncle Sam wants his cut.
How prop firm income is taxed:
Most prop firms pay you as an independent contractor (1099 income, not W-2). This means:
- You’re responsible for self-employment tax (~15.3%)
- You need to make quarterly estimated tax payments
- You can deduct business expenses
Read our full guide on prop firm trading taxes for details, but here are the basics:
Deductible expenses:
- Evaluation fees
- Platform fees and exchange fees
- Internet costs (portion used for trading)
- Home office (if you trade from home)
- Education and courses
- Trading software and tools
- Professional services (accountant, trading coach)
Keep records of everything:
- All evaluation payments
- All payout amounts and dates
- All business expenses with receipts
- Trading journals showing this is your business
Pro tip: Work with a CPA who understands trader taxes. It’s worth the $500-1,500/year to not mess this up.
Step 10: Learn, Adapt, and Keep Improving
Trading is a learning process. You’re never “done” learning.
What top prop traders do continuously:
1. Journal every trade
- Entry reason
- Exit reason
- Did you follow your plan?
- What did you learn?
2. Review stats weekly
- Win rate
- Average winner vs. average loser
- Best/worst times of day
- Best/worst days of week
- What setups work, what don’t
3. Adapt strategy based on data
- If you lose every Friday, stop trading Fridays
- If morning setups work best, focus mornings
- If trend days crush you, avoid trading in strong trends
4. Test new strategies in paper account first
- Never experiment with funded capital
- Use a paper account (most platforms offer this)
- Test for 2-4 weeks minimum
- Only implement if proven profitable
5. Connect with other prop traders
- Join Discord communities
- Participate in trading forums
- Learn from others’ mistakes
- Share your journey
6. Take breaks
- Trading 5 days/week, 52 weeks/year = burnout
- Take at least 1-2 weeks off per year completely
- Mental health = trading performance
7. Don’t chase losses
- Bad day? Walk away
- Bad week? Take a few days off
- Bad month? Review everything, maybe paper trade for a week
The Reality Check Nobody Wants To Hear
Can you make a living with prop firms? Yes.
Is it easy? Hell no.
Most traders fail their first evaluation. Of those who pass, most lose their funded account within 6 months. Of those who keep it, many never make enough to quit their day job.
But here’s the thing: Those odds are still WAY better than:
- Trying to save $100K to trade your own capital (takes most people 10-20 years)
- Starting any other business (90% fail within 5 years)
- Becoming a professional athlete (0.03% chance)
And unlike those paths, failing at prop trading costs you hundreds or low thousands, not your life savings or a decade of your time.
Who Actually Succeeds?
The traders who make it share these traits:
- Discipline over talent – They follow rules even when it’s boring
- Long-term thinking – They’re not trying to get rich in 3 months
- Emotional control – They don’t revenge trade or overtrade
- Continuous learning – They adapt when things stop working
- Realistic expectations – They know it takes 12-24 months to build sustainable income
If that sounds like you, you’ve got a real shot at this.
Your Next Steps (Do This Today)
Step 1: Decide what you want to trade (start with equity index futures if unsure)
Step 2: Research 3-5 prop firms that support your chosen instrument
- Use our prop firm comparison tool for futures and forex to filter by account size, fees, and rules
- Read actual reviews from funded traders
- Check their payout history and reputation
Step 3: Pick ONE firm and commit to it for your first attempt
- Don’t firm-hop before you’ve even tried
- Give yourself 2-3 evaluation attempts minimum
- Budget $500-1,500 for this learning phase
Step 4: Paper trade your strategy for 2-4 weeks first
- Prove you can be profitable before paying for evaluation
- Practice following rules exactly
- Track your stats
Step 5: Sign up for your first evaluation when you’re ready
- Not when you’re “perfect” (you never will be)
- When you’ve been consistently profitable in paper account for 3-4 weeks
Step 6: Follow this blueprint, focus on rules compliance, and take your time
Remember: This isn’t a sprint. It’s a marathon. The traders who treat it like a business and commit to 12-24 months of focused effort are the ones who end up making full-time income.
The others? They chase quick wins, blow up accounts, and quit after a month.
Don’t be that person.
Ready to start? Compare the best prop firms here and find the one that matches your trading style and goals.
Want to learn more first? Check out our prop trading education section covering everything from consistency rules to payout structures.