How much money to open a prop firm? | Ejaz Ahmad posted on the topic | LinkedIn (2024)

The Role of prop Trading firms in the market?Prop trading firms, or proprietary trading firms, are companies that trade financial markets with their own capital, rather than with clients' money. They play an important role in the market by providing liquidity, efficiency, and innovation.Liquidity refers to the ease and speed of buying and selling assets in the market. Prop trading firms enhance liquidity by participating in various financial instruments, such as stocks, forex, futures, and options, and serving as intermediaries that can help stabilize asset prices.Efficiency refers to the degree to which the market reflects all available information and allocates resources optimally. Prop trading firms enhance efficiency by using sophisticated trading strategies and technologies, such as algorithmic trading, high-frequency trading, and arbitrage, to exploit market inefficiencies and anomalies. By enhancing efficiency, prop trading firms contribute to market rationality, competitiveness, and fairness Prop trading firms enhance innovation by developing and testing new trading ideas, tools, and systems, as well as by providing feedback and incentives to other market participants.

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What stratagey do you use to trade the market?I use a combination of different forex trading strategies to trade the market, depending on the market conditions, my goals, and my risk appetite. Some of the strategies that I use are:Forex Trend Trading Strategy: This strategy involves identifying and following the direction of the market trend, which can be upward, downward, or sideways. I use various technical indicators, such as moving averages, trend lines, and chart patterns, to determine the trend and find entry and exit points. I try to ride the trend as long as possible and avoid trading against it. This strategy works well in trending markets, but not in ranging markets.Forex Range Trading Strategy: This strategy involves trading within a defined price range, which is bounded by a support and resistance level. I use various tools, such as oscillators, candlestick patterns, and pivot points, to identify the range and find trading opportunities. I buy at the support level and sell at the resistance level, or vice versa.I also use stop-loss orders and take-profit orders to protect my trades. This strategy works well in ranging markets, but not in trending markets. Forex Volume Trading Strategy.This strategy involves using volume data to confirm price movements and identify trading signals. Volume is the number of shares or contracts traded in a given period of time. It indicates the strength and interest of buyers and sellers in the market. I use various volume indicators, such as volume bars, on-balance volume (OBV), and money flow index (MFI), to measure the volume and compare it with the price action. I look for divergences, breakouts, and trend confirmations based on volume signals. This strategy works well in both trending and ranging markets.These are some of the forex trading strategies that I use to trade the market. However, there are many other strategies that you can learn and apply to your own trading style.

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The5ers Latest Offer!Now get a $20,000 account for just $1.- Profit target only 6%- Account size $20,000 (Boot Camp)- Bonus after the first step- No time limit- News trading allowed- Overnight and weekend holding allowed- Expert Advisor (EA) can be used except for some thingsConditions:- One user can only get one account- Only card payments accepted- The deadline is December 31st.

Best Forex Prop Firm without challenge Forex prop firms are companies that provide traders with funding, training, and support to trade in the forex market. Some prop firms require traders to pass a challenge or an evaluation before they can get funded, while others do not. If you are looking for the best forex prop firms without challenges, here are some possible options: The 5%ers: This is a UK-based prop firm that offers instant funding up to $50K. You do not need to pass any challenge or evaluation to get started. You can trade with a 60% profit split and a scalable account up to $1.24 million. SurgeTrader: This is a US-based prop firm that offers funding up to $1 million. You only need to pass one phase of evaluation, which has no time limit or profit target. You can trade with a 75% to 90% profit split and a low monthly fee. You can also trade stocks, futures, and options with this prop firm. FTUK: This is a UK-based prop firm that offers funding up to $2 million. You do not need to pass any challenge or evaluation to get funded. You can trade with a 50% to 70% profit split and zero commission or swap fees. You can also hold weekend and overnight positions with this prop firm. These are some of the best forex prop firms without challenges that you can consider.

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How do prop firm make money?Prop firms, or proprietary trading firms, are companies that trade financial markets with their own capital, rather than with clients' money. Prop firms make money in two main ways: Evaluation fees: Prop firms charge traders a fee to participate in their challenges or simulations, which are tests that evaluate their trading skills and potential. These fees are usually non-refundable, regardless of whether the traders pass or fail the challenges. Prop firms keep these fees as part of their income. Profit sharing: Prop firms share a percentage of the profits generated by their traders, who trade with the prop firm's capital. The profit-sharing ratio can vary depending on the prop firm, the trader, and the trading performance. For example, if the profit-sharing ratio is 50%, and a trader makes $10,000 in a month, the prop firm will take $5,000 and the trader will keep $5,000.These are the two main ways that prop firms make money.

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Commission in Forex TradingForex commission refers to the fee charged by brokers for executing trades on your behalf. Instead, traders rely on brokers to provide access to the forex market and facilitate their trades.There are different types of commission that brokers may charge, depending on their business model and the type of account you have. Some of the common types are: Spread: This is the difference between the bid and ask prices of a currency pair, which represents the broker's profit margin. For example, if the bid and ask prices of EUR/USD are 1.1832 and 1.1835, the spread is three pips, and the broker will charge you three pips for each trade. The spread is usually included in the price quotes that you see on your trading platform, so you don't have to pay it separately.Commission: This is a flat fee that the broker charges for each trade, regardless of the size or volume of the trade. The commission can be a fixed amount per lot or a percentage of the trade value. For example, if the broker charges $10 per standard lot, and you trade one standard lot of EUR/USD, you will pay $10 for each trade. Swap: This is the interest rate differential between the two currencies in a currency pair, which reflects the cost of holding a position overnight. For example, if you buy EUR/USD, you are borrowing US dollars and lending euros, and you will pay or receive the difference between the US and euro interest rates. The swap is usually calculated and applied to your account at the end of each trading day, so you have to pay it separately from the spread and commission.

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Some of the benefits of a prop firm . Access to capital: Prop firms provide traders with access to large amounts of capital, which can be used to trade various financial instruments, such as stocks, forex, futures, and options. This can increase the potential profit and diversification of traders, as well as reduce their personal financial risk. Training and education: Many prop firms offer their traders training and education programs, which can teach them the basics of the market, the strategies and techniques of trading, and the tools and resources of the prop firm. These programs can help traders improve their skills, knowledge, and confidence, as well as prepare them for the prop firm challenges and simulations. Support and mentorship: Prop firms also provide their traders with support and mentorship from experienced traders and staff, who can offer feedback, advice, and guidance. These mentors can help traders overcome their challenges, learn from their mistakes, and achieve their goals. They can also create a supportive and collaborative community of traders, who can share their experiences, insights, and tips with each other. Technology and tools: Prop firms also provide their traders with access to advanced technology and tools, such as trading platforms, software, hardware, and servers. These technology and tools can enhance the trading performance, efficiency, and convenience of traders, as well as enable them to access various markets, instruments, and data. They can also help traders manage their risk, monitor their progress, and analyze their results.Incentives and opportunities: Prop firms also offer their traders various incentives and opportunities, such as funding, profit sharing, bonuses, and employment.

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Reputation as a Prop FirmTheir reputation as a prop firm depends on who you ask and what criteria you use to evaluate them. Some traders may have positive experiences with them, while others may have negative ones. Some traders may value their funding, support, and flexibility, while others may care more about their fees, rules, and transparency. Therefore, it is important to do your own research and due diligence before joining a prop firm.One way to check their reputation is to look for online reviews and testimonials from current or former traders who have worked with them. However, you should also be aware that some of these reviews may be biased, fake, or outdated, so you should not rely on them blindly. You should also verify the information and claims made by the reviewers and the prop firms themselves.Another way to check their reputation is to look for their standing and track record in the forex industry. These websites provide useful guides and tips for choosing and working with prop firms. They also rank and compare some of the best prop firms based on various criteria, such as regulation, fees, platforms, products, and customer service. However, you should also be aware that some of these rankings may be subjective, incomplete, or outdated, so you should not rely on them exclusively. You should also check the sources and methods used by the websites to evaluate the prop firms.