Trading Tips & Prop Firm Strategies | Cointracts Learning Hub

The 5%ers is a proprietary trading firm that offers capital to traders who can pass its evaluation process. For traders in the United States, The 5%ers is fully accessible, providing multiple funding programs with distinct rules, profit targets, and scaling opportunities. It stands out by offering instant funding on some programs and a growth plan that doubles account size at each milestone, making it a prominent choice for US traders seeking to leverage their skills without risking significant personal capital.

To determine if a prop trading firm is good, traders must meticulously evaluate its evaluation rules for fairness, the transparency of its fee structure, the competitiveness of its profit split, and the reliability of its payout process. A premier firm is distinguished by offering realistic trading objectives, a clear path for account growth through a scaling plan, robust customer support, and a strong, verifiable reputation within the trading community.

To work at a prop trading firm, an aspiring trader must first develop a proven, profitable trading strategy, master risk management, and cultivate strong psychological discipline. The next step involves choosing between the traditional salaried path, which requires a strong quantitative background and a rigorous interview process, or the modern funded trader path, which involves passing a performance-based evaluation challenge to trade the firm's capital and earn a share of the profits.

Engaging with a proprietary trading firm while receiving unemployment benefits is possible, but it is a complex situation fraught with legal and financial risks. Your eligibility largely depends on your state's specific rules, your legal classification (typically as an independent contractor), and your strict adherence to reporting all activities and any income earned. Failure to comply can lead to severe penalties, including benefit repayment and fraud charges.

To successfully get money from a prop firm, a trader must first pass a rigorous evaluation challenge to prove their profitability and risk management skills. After passing, you gain access to a funded account where you trade the firm's capital. Your earnings come from a predetermined profit split, typically ranging from 70% to 90% of the profits you generate, which you can then withdraw according to the firm's payout schedule.

Selecting the best proprietary trading firm involves a detailed analysis of several key factors. You must scrutinize the evaluation challenge rules, understand the profit split and fee structure, verify the available trading assets and platforms, and assess the firm's reputation and support system. The ideal choice aligns with your specific trading strategy, risk tolerance, and financial goals, ensuring a mutually beneficial partnership. A crucial first step is to check for features that match your needs, such as the absence of time limits on challenges, which allows for a more strategic and less pressured trading approach.

Proprietary trading firms primarily make money through two main avenues: direct profits from trading their own capital and revenue generated from their trader evaluation programs. For modern online prop firms, a significant portion of income comes from the fees traders pay to take on a "challenge" or "evaluation." Since many aspiring traders do not pass these evaluations, the collected fees form a substantial and stable revenue stream. Successful traders who pass the evaluation then generate trading profits, which are shared between the trader and the firm, creating a second layer of income for the company.