JoymistaWhat Is a Prop Firm and a Funded Account?
A prop firm gives a trader an account with its capital after the trader passes an evaluation with set rules, in return for a share of the profits.
Explained
Evaluation rules usually include a profit target, a maximum daily loss, an overall loss limit, and sometimes limits on news trading or holding over the weekend. Rules and prices differ a lot between firms, so read them before buying.
Example
Example with made-up numbersA 100,000-dollar account with a 10% profit target and a 5% daily loss limit means reaching 10,000 dollars of profit without losing more than 5,000 in a single day.
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Open in JoymistaEducational content, not investment advice.