Best Prop Trading Firms For Swing Trading
Best prop trading firm for swing trading is Topstep
Top prop firms for swing trading:
Topstep - best for stock index futures trading
The 5%ers - Best for funding options and diverse instruments Instant funding. News trading. Forex, gold & silver, indices
Earn2Trade - Best for educational futures trading Virtual trading simulation. Trader Career Path. Gauntlet Mini. Up to $400,000 funding
Fidelcrest - Best for swing trading flexibility Aggressive accounts for swing trading. No limitations on holding periods
The Funded Trader - Best for instant funding and weekend holding Instant funding. Weekend holding allowed. 90% profit split
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5.7
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5.28
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6.68
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For the discretionary trader, few approaches are as strategically flexible as swing trading. By analyzing medium-term trends and price behavior, the swing trader aims to capture intermittent profitable movements in a variety of financial markets. However, realizing the full potential of the swing trading approach often requires sizable Position sizing to target worthwhile returns.
It is here that the proprietary trading firm model provides an attractive value proposition for experienced swing traders. By offering capital,tools, and resources to trade proprietary accounts on their behalf, prop firms open the door for swing traders to deploy their strategies at a larger scale. Of course, it remains crucial for any trader considering this path to carefully vet the details of the prop firm's program.
This article explores some top options specifically catering to swing traders. Readers will learn about the features, funding programs, trader communities and strengths of various prop trading firms. With prudent due diligence, the discerning swing trader may find the support of a prop firm enhances both their skills and profit-generating ability in the markets.
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Is overnight position holding risky for swing trading?
Holding positions overnight does expose swing traders to added risk from gaps against open positions. However, many successful swing traders embrace this approach to benefit from longer trends.
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Is it possible to swing trade part-time?
Yes, swing trading enables participating in the markets without constantly watching screens. Trades can be placed in the morning and monitored occasionally during the day, allowing for other responsibilities. However, focus is still required.
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What should I consider when choosing a prop firm for swing trading?
Look for flexibility in holding positions over weekends, sufficient leverage for your strategy, education support and a culture aligned with your trading approach.
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Can you swing trade internationally with prop firm accounts?
Yes, many allow trading global markets like equities in both US, Europe and Asia depending on the firm's offered instruments.
What are prop firms?
Proprietary trading firms, also known as prop firms, offer a unique opportunity for swing traders to leverage their skills and expertise in the financial markets. These firms are specialized companies that recruit and train professional traders, equipping them with the necessary capital to execute trades on behalf of the firm. By employing a range of trading strategies like arbitrage and technical analysis, prop firms aim to generate profits and leverage their vast informational and technological resources.
One significant advantage of joining a prop trading firm is the access to advanced trading tools, software, and resources. These resources can greatly enhance a trader's decision-making process and increase their chances of success. Traders typically gain access to sophisticated trading platforms, comprehensive data feeds, in-depth research reports, and cutting-edge analysis tools. These powerful resources empower traders to make informed decisions, identify market trends, and seize profitable opportunities.
Best prop firms for swing trading in 2024
When it comes to swing trading, selecting the right prop trading firm can significantly impact your trading success. Here are some of the best prop firms for swing traders in 2023, as shortlisted by experts:
1 Topstep
With its brand power and reputation as an industry innovator and one of Inc 5000’s fastest-growing companies, Topstep has earned the trust of many traders. To participate in the funded account program, all traders begin with the Trading Combine. You can open a real-time simulated futures account with $150K, $200K, or $300K buying power.
During the Trading Combine, you can earn a funded trading account if you demonstrate consistent profitability and manage risk appropriately. Using Topstep's capital, you can trade in real time without personal financial risk, with funds provided by Topstep.
As quickly as within eight trading days, traders can qualify to receive a funded account (the amount of funding provided is determined by the Trading Combine plan).
The first $5,000 in profits you make can be withdrawn in full, and 90% of profits exceeding that amount can be withdrawn.
With Topstep, payout requests are processed on a daily basis (payout requests made prior to 10 a.m. CT are processed on the same day).
Topstep’s trader development services include instruction from professional traders, tools, and daily live videos, along with personalized analytics on performance and bonuses for traders.
Trading platforms supported include TSTrader, TradingView, NinjaTrader, Sierra Chart, MultiCharts, R|Trader Pro, and many more.
For a $50k account, Topstep pricing starts at $165 per month. $100k accounts cost $325 per month, and $150k accounts cost $375. Free trials are also available for 14 days.
2 The5ers:
The 5%ers offers attractive features for swing traders, including instant funding options with various balance choices. They support up to $4 million growth with extended profit targets, making it appealing for swing traders aiming for substantial gains. With flexibility for news trading, a range of tradable instruments including Forex and indices, and access to the popular MetaTrader 5 platform, The 5%ers provides a comprehensive trading environment.
3 Earn2Trade:
Designed as an educational trading platform, Earn2Trade is an excellent choice for swing traders looking to build their trading skills in the futures market. They offer two funding paths, the Trader Career Path and the Gauntlet Mini, utilizing a virtual trading simulation tool. Earn2Trade stands out with its funded trading programs, providing accounts of up to $400,000 at reasonable prices. Their customer-friendly EOD drawdown limits and low recurring costs make them an attractive option for experienced swing traders.
4 Fidelcrest:
Fidelcrest offers swing traders two distinct programs: Pro Trader and Micro Trader. With swing trading allowed on their Aggressive accounts, Fidelcrest accommodates the needs of swing traders. The firm does not impose limitations on overnight, weekend, and news trading. While swing traders may appreciate the profit split and leverage offered by Fidelcrest, it is essential to note the maximum loss percentages for both Normal and Aggressive accounts. (It is 10% on Normal accounts and up-to 20% for Aggressive accounts)
5 Funded Trader:
For swing traders seeking prop firm funding, The Funded Trader presents an impressive offering. They provide instant funding, allowing swing traders to take advantage of trading opportunities promptly. With the flexibility to hold positions over the weekend, swing traders can align their trading strategies with market dynamics. The Funded Trader offers a favorable 90% profit split, enabling swing traders to reap substantial rewards for their successful trades. Additionally, their capital scaling plan, allowance for expert advisors, and reasonable leverage of 1:30 create a compelling package for swing traders.
Who are swing traders?
Swing traders represent a group of traders who adopt a specific trading style focused on capturing short- to medium-term profits in various financial instruments. Unlike long-term investors, swing traders aim to take advantage of price fluctuations that occur over a period ranging from a few days to several weeks.
The core methodology employed by swing traders revolves around the utilization of technical analysis. By closely studying price trends and patterns, swing traders strive to identify opportune moments to enter and exit trades. They rely on a diverse set of tools and indicators, including moving averages, momentum indicators, price range tools, and chart patterns, to guide their trading decisions.
Technical analysis plays a pivotal role in swing trading, as it allows traders to analyze historical price data, identify potential support and resistance levels, and detect trend reversals. By carefully assessing these factors, swing traders can make informed judgments about when to initiate a trade and when to exit it, thus optimizing their chances of profiting from short-term market movements.
Swing traders embrace a flexible approach, enabling them to adapt to changing market conditions. While their primary focus is on technical analysis, swing traders may also consider fundamental factors that can impact price movements during their decision-making process. By combining both technical and fundamental analysis, swing traders aim to develop a well-rounded understanding of the market dynamics and increase their trading effectiveness.
Swing trading vs Intraday trading
When it comes to trading in the financial markets, there are different approaches that traders can adopt, such as swing trading and intraday trading. Let's take a closer look at the key parameters that differentiate these two trading styles:
| Parameter | Swing Trading | Intraday Trading |
|---|---|---|
Time Horizon |
Assets for copy trading Holding period of a few days to several weeks |
Regulator Buying and selling within the same trading day |
Trading Style |
Assets for copy trading Takes advantage of short- to medium-term price movements |
Regulator Focuses on short-term price fluctuations |
Analysis Approach |
Assets for copy trading Relies on technical analysis and chart patterns |
Regulator Utilizes technical analysis and real-time market data |
Number of Trades |
Assets for copy trading Fewer trades per week |
Regulator Multiple trades per day |
Leverage |
Assets for copy trading Typically lower leverage (around 2 times initial capital) |
Regulator Higher leverage (around 4 times initial investment) |
Risk |
Assets for copy trading Relatively lower risk due to longer holding periods |
Regulator Higher risk due to daily volatility and overnight positions |
Pros and cons of swing trading
Let's delve into the pros and cons of swing trading:
👍 Pros
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Potential for higher gains:
Swing trading provides the potential to capture larger gains compared to day trading. By holding positions for a longer period, swing traders can take advantage of extended price movements and ride profitable trends
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More flexibility and less time commitment:
Swing trading offers flexibility for traders with limited time availability. Unlike day trading, swing trading doesn't require constant monitoring of the markets throughout the day. This allows traders to participate in the markets while still managing other commitments and responsibilities
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Reduced stress:
Swing trading is generally considered less stressful than day trading. With a more methodical and less fast-paced approach, swing traders have ample time to analyze charts, identify trends, and make trading decisions. This can result in reduced emotional pressure and a more relaxed trading experience
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Diversification and spread of risk:
Swing trading allows traders to diversify their trading portfolio and spread risk across multiple trades. By engaging in various trades over a few days or weeks, traders can take advantage of different market opportunities. This helps mitigate the impact of any single trade and provides a broader exposure to potential profits
👎 Cons
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Increase in risk exposure:
Swing trading exposes traders to potential market gaps or unexpected news events. As positions are held for a longer duration, there is a higher likelihood of being exposed to market movements during non-trading hours, which can result in increased risk
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Longer patience required:
Successful swing trading requires patience. Traders must wait for their trades to play out over a longer period and withstand short-term price fluctuations. This can test a trader's discipline and require them to resist the temptation to exit positions prematurely
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Potential for missed opportunities:
Swing trading involves holding positions for several days to weeks, which means traders may miss out on short-term trading opportunities. Rapid market movements or short-term trends can occur within the holding period, potentially resulting in missed profit opportunities
What features to look for in a prop firm for swing traders?
When selecting a prop trading firm for swing trading, there are several important features that swing traders should consider. These features can enhance the trading experience and provide the necessary support for successful swing trading. Here are the key features to look for:
Funding opportunities:
Swing traders often require higher levels of capital to make their trades worthwhile, given the lower frequency of trades. Look for prop firms that offer funding options specifically tailored for swing traders. These firms should provide real funded accounts with sufficient capital to support your trading strategy
Flexibility on weekend holding:
Traditionally, many prop firms had rules against holding trades over the weekend. However, as swing trading gains popularity, some prop firms now allow weekend holding. If your trading style requires holding trades over the weekend to capture potential price movements, look for prop firms that offer this flexibility
Leverage options:
Consider the leverage options provided by the prop firm. Swing traders typically require lower leverage compared to day traders, as swing trading involves longer holding periods. Ensure that the prop firm offers leverage levels that align with your risk management and trading strategy
Access to education, resources, and support:
A good prop firm should provide swing traders with access to educational materials, resources, and support. Look for firms that offer comprehensive training programs, educational webinars, trading tools, and research reports. This can help you enhance your trading skills, stay updated with market trends, and make informed trading decisions
Community of traders:
Joining a community of swing traders can be beneficial for news updates, networking opportunities, and learning from other experienced traders. Look for prop firms that foster a strong community where you can connect with fellow swing traders, share insights, and gain valuable knowledge
Proper risk management features:
Effective risk management is crucial in swing trading. Ensure that the prop firm provides risk management tools and features to help you control and mitigate potential risks. This can include features such as stop-loss orders, risk monitoring systems, and position sizing guidelines
Methodology for compiling our ratings of prop firms
Traders Union applies a rigorous methodology to evaluate prop companies using over 100 quantitative and qualitative criteria. Multiple parameters are given individual scores that feed into an overall rating.
Key aspects of the assessment include:
Trader Testimonials and Reviews. Collecting and analyzing feedback from existing and past traders to understand their experiences with the firm.
Trading instruments. Companies are evaluated on the range of assets offered, as well as the breadth and depth of available markets.
Challenges and Evaluation Process. Analyzing the firm's challenge system, account types, evaluation criteria, and the process for granting funding.
Profit Split. Reviewing the profit split structure and terms, scaling plans, and how the firm handles profit distributions.
Trading Conditions. Examining leverage, execution speeds, commissions, and other trading costs associated with the firm.
Platform and Technology. Assessing the firm's proprietary trading platform or third-party platforms it supports, including ease of use, functionality, and stability.
Education and Support. Quality and availability of training materials, webinars, and one-on-one coaching.
Glossary for novice traders
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Broker
A broker is a legal entity or individual that performs as an intermediary when making trades in the financial markets. Private investors cannot trade without a broker, since only brokers can execute trades on the exchanges.
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Trading
Trading involves the act of buying and selling financial assets like stocks, currencies, or commodities with the intention of profiting from market price fluctuations. Traders employ various strategies, analysis techniques, and risk management practices to make informed decisions and optimize their chances of success in the financial markets.
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Swing trading
Swing trading is a trading strategy that involves holding positions in financial assets, such as stocks or forex, for several days to weeks, aiming to profit from short- to medium-term price swings or "swings" in the market. Swing traders typically use technical and fundamental analysis to identify potential entry and exit points.
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Leverage
Forex leverage is a tool enabling traders to control larger positions with a relatively small amount of capital, amplifying potential profits and losses based on the chosen leverage ratio.
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Prop trading
Proprietary trading (prop trading) is a financial trading strategy where a financial firm or institution uses its own capital to trade in various financial markets, such as stocks, bonds, commodities, or derivatives, with the aim of generating profits for the company itself. Prop traders typically do not trade on behalf of clients but instead trade with the firm's money, taking on the associated risks and rewards.
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Team that worked on the article
Andrey Mastykin is an experienced author, editor, and content strategist who has been with Traders Union since 2020. As an editor, he is meticulous about fact-checking and ensuring the accuracy of all information published on the Traders Union platform. Andrey focuses on educating readers about the potential rewards and risks involved in trading financial markets.
He firmly believes that passive investing is a more suitable strategy for most individuals. Andrey's conservative approach and focus on risk management resonate with many readers, making him a trusted source of financial information.
Dr. BJ Johnson is a PhD in English Language and an editor with over 15 years of experience. He earned his degree in English Language in the U.S and the UK. In 2020, Dr. Johnson joined the Traders Union team. Since then, he has created over 100 exclusive articles and edited over 300 articles of other authors.
Mirjan Hipolito is a journalist and news editor at Traders Union. She is an expert crypto writer with five years of experience in the financial markets. Her specialties are daily market news, price predictions, and Initial Coin Offerings (ICO).