What is a prop firm?
How modern retail prop firms work, how they make money and what to check before paying for a challenge.
The modern prop firm model
Most retail prop firms sell evaluations, often called challenges. You pay a fee, trade an account under strict rules and, if you pass, receive a funded account — usually simulated — where you are paid a share of the profits you make.
How prop firms make money
Challenge fees are a major source of revenue for many firms, and most participants do not pass. That is not automatically a problem, but it means you should understand the rules as well as the firm does before you start.
What to check before you pay
Before buying any challenge, check:
- The full rulebook, including daily loss, maximum loss and any consistency rules.
- The firm’s payout track record and how long it has operated.
- Who owns and operates the company, and where it is registered.
- Patterns in reviews — especially complaints about denied payouts.
Educational content only — not financial, investment or trading advice. Trading forex, CFDs, crypto and other leveraged products carries a high risk of loss and may not be suitable for everyone. Past performance does not guarantee future results.