Best Prop Trading Firms for Scalping Trading Strategy
Best prop firm for scalping - Topstep
Best prop trading firms for scalping are:
Topstep - best for stock index futures trading
FTMO: Premier Forex prop firm with $400K capital allocation and extensive support resources
City Traders Imperium (CTI): Top prop firm offering up to 90% profit splits and strong community engagement
SurgeTrader: Solid prop firm providing capital to skilled traders with 90% profit split
Funded Next: Excellent prop firm with scaling profit splits and 24/7 account manager
My Forex Funds: Recognized prop firm with up to 90% profit splits and active community
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5.7
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5.28
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6.68
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Scalping, a popular trading strategy aimed at capitalizing on small price movements, requires skill, precision, and access to suitable resources. Understandably, in the fast-paced world of scalping, choosing the right prop firm can significantly impact a trader's success. So, in this article, the experts at TU will explore and highlight the top prop firms that cater specifically to scalpers, enabling them to thrive in the dynamic and exciting world of scalping.
What should scalpers look for in prop firms?
When selecting a prop firm as a scalper, it's crucial to consider several important factors. Here are key considerations for scalpers when evaluating prop firms:
Challenge level:
Assess the prop firm's rules and evaluation process to determine the level of difficulty. Some firms may have more stringent requirements, while others may be more suitable for beginners. Choose a prop firm that aligns with your skill level to ensure a suitable trading environment
Profit sharing and scaling plan:
Examine the profit-sharing structure offered by the prop firm. Understand the percentage of profits retained by the firm and whether they provide a scaling plan. A scaling plan enables traders to gradually increase their trading capital over time, offering opportunities for growth and expanded trading potential
Educational resources:
Look for prop trading firms that provide comprehensive educational resources and materials. Access to educational content can greatly benefit scalpers by enhancing their trading strategies, technical analysis skills, and risk management techniques. These resources can empower traders to make informed decisions and improve their overall trading performance
Customer support:
Evaluate the quality of customer support provided by the prop firm. Efficient and responsive customer support is essential for addressing queries, resolving technical issues, and receiving timely assistance when needed. A prop firm with reliable customer support can ensure a smooth trading experience and help scalpers overcome any obstacles they may encounter
Community engagement:
Consider whether the prop firm fosters a sense of community among its traders. Look for platforms or communities where traders can interact, share insights, discuss strategies, and learn from one another. Engaging with a community of like-minded traders can provide valuable networking opportunities, mentorship, and a supportive trading environment
Best prop firms for scalping in 2024
When it comes to finding the best prop firms for scalping, there are several options available in the market. Here are some of the top prop firms that are well-suited for scalpers in 2023, as suggested 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 FTMO
FTMO stands out as a premier proprietary trading firm for Forex traders. With its unique 2-step evaluation process, FTMO effectively identifies trading talent. Scalpers who pass the evaluation can remotely manage accounts with balances of up to $400,000. This high capital allocation allows scalpers to take advantage of larger position sizes and potential profits. Additionally, FTMO's educational resources, account analysis, and performance coaching provide traders with the necessary tools and support to excel in scalping.
3 City Traders Imperium (CTI)
CTI is a top prop firm that offers generous profit splits and supports various trading styles, including scalping. Scalpers can benefit from CTI's scaling profit shares, which can reach up to 90%. This means that as a scalper's trading performance improves, they can earn a larger portion of the profits generated. CTI also provides access to top-tier educational resources, empowering scalpers to further refine their strategies and techniques. The strong community engagement within CTI offers networking opportunities and a supportive environment for scalpers to thrive.
4 SurgeTrader
SurgeTrader is a solid prop firm specifically designed to provide capital to skilled traders, making it a suitable choice for scalpers. It offers straightforward rules and optional add-ons, allowing scalpers to tailor their trading experience. With SurgeTrader, scalpers can benefit from a 90% profit split, providing a high percentage of the profits earned. The firm's multiple tradable assets and no minimum trading days requirement give scalpers flexibility in executing their trading strategies. Although there may be some limitations, SurgeTrader remains an attractive option for scalpers seeking prop trading opportunities.
5 Funded Next
Funded Next is an excellent prop firm for scalpers, particularly those focused on Forex trading. It offers scaling profit splits, allowing scalpers to earn up to 90% of the profits generated. With a 24/7 account manager, scalpers can receive prompt support and guidance throughout their trading journey. Funded Next also supports most trading styles, including scalping, and provides leverage of up to 1:100, enabling scalpers to maximize their trading potential. The active community within Funded Next offers valuable insights and networking opportunities for scalpers seeking a collaborative environment.
6 My Forex Funds
My Forex Funds is recognized as one of the best proprietary trading firms for scalpers. It offers rewarding profit splits of up to 90%, allowing scalpers to earn a significant share of the profits generated. The availability of a 24/7 support team ensures that scalpers receive timely assistance whenever needed. While the educational resources may be relatively limited, the strong community engagement within My Forex Funds fosters an environment where scalpers can connect with like-minded traders and gain valuable insights.
Key tips for scalpers in prop firms
Here are some expert tips to help scalpers thrive in prop firms:
Develop a scalping strategy:
Create a well-defined and tested scalping strategy that aligns with your trading style. This strategy should involve quick trades with small profit targets. Utilize technical analysis indicators, such as moving averages or oscillators, to identify favorable trading setups
Practice patience and discipline:
Patience and discipline are paramount for successful scalping. Stick to your trading plan and avoid impulsive trades. Exercise patience by waiting for setups that meet your strategy's criteria, rather than chasing trades or forcing trades that don't align with your plan
Effective risk management:
Implement robust risk management techniques to protect your capital. Set stop-loss orders to limit potential losses and establish profit targets to secure profits. Determine your risk-reward ratio for each trade, ensuring it aligns with your overall risk tolerance
Focus on liquid markets:
Scalping is most effective in highly liquid markets that facilitate quick entry and exit. Seek prop firms that offer access to liquid markets, such as major Forex pairs, actively traded stocks, or popular commodities. Liquidity ensures efficient trade execution and minimizes slippage
Monitor the market diligently:
As a scalper, closely monitor the market and stay informed about price movements, news events, and overall market conditions. Leverage real-time market data and advanced trading platforms provided by the prop firm to make well-informed trading decisions in a timely manner
Utilize protective stop losses:
Given the fast-paced nature of scalping, it's essential to use protective stop-loss orders. Determine appropriate stop-loss levels based on your risk tolerance and the volatility of the specific market you are trading. Protective stop losses help limit potential losses and protect your capital
Pros and cons of scalping
Scalping as a trading strategy offers both advantages and disadvantages. Let's explore some of the pros and cons of employing this approach:
👍 Pros of Scalping
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Profitability:
Scalping can be highly profitable as it capitalizes on small price differentials. By focusing on short-term fluctuations, scalpers can accumulate profits over time, irrespective of the overall market trend
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Non-directional strategy:
Scalping is a versatile strategy that can be applied in both rising and falling markets. This flexibility allows scalpers to seize opportunities based on short-term price movements, enabling them to adapt to various market conditions
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Automation potential:
Many scalping strategies can be automated within trading systems. By programming predefined technical criteria, scalpers can automate trade execution, saving time and reducing the need for constant manual monitoring
👎 Cons of Scalping
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Transaction costs:
Due to the high number of trades involved, scalping can result in increased transaction costs. Traders need to pay commissions on each trade, which can impact overall profitability. It is essential to carefully consider these costs and ensure that potential profits outweigh the transaction fees
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Time-consuming:
Scalping demands a significant time commitment from traders. Executing dozens or even hundreds of trades per day requires constant market monitoring and quick decision-making. This intensive approach can be mentally and physically exhausting
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Psychological pressure:
Scalping requires traders to make swift decisions and manage multiple trades simultaneously. The fast-paced nature of this strategy can create psychological pressure and stress, particularly for less experienced traders. Emotional discipline and the ability to handle rapid market fluctuations are crucial for success in scalping
Scalping vs Intraday trading
| Parameter | Scalping | Intraday Trading |
|---|---|---|
Holding period |
Very short (seconds to minutes) |
Assets for copy trading Short to medium term (hours to end of day) |
Number of trades |
High frequency, multiple trades/day |
Assets for copy trading Moderate frequency, fewer trades/day |
Profit potential |
Limited per trade, small gains |
Assets for copy trading Moderate to higher per trade, larger gains |
Risk management |
Tight stop-loss orders, limited risk |
Assets for copy trading Stop-loss orders, risk per trade can vary |
Time commitment |
Requires constant monitoring, quick decision-making |
Assets for copy trading Requires monitoring throughout the day |
Technical analysis |
Relies heavily on technical analysis indicators |
Assets for copy trading Relies on technical analysis, may consider fundamentals |
Market exposure |
Limited time exposure, quick entry and exit |
Assets for copy trading Longer time exposure, potential for overnight positions |
Liquidity |
Requires adequate liquidity for frequent trading |
Assets for copy trading Requires liquidity, but not as much as scalping |
FAQs
Do prop firms allow scalping?
Yes, many prop firms allow scalping as a trading strategy. However, it is advisable to review the specific rules and policies of each prop firm regarding scalping before joining.
Which Forex prop firm is best?
FTMO is considered one of the best Forex prop firms for traders due to its unique evaluation process, high capital allocation, and comprehensive support resources. Other top Forex prop firms for scalpers include City Traders Imperium (CTI), SurgeTrader, FundedNext, and My Forex Funds.
Which prop firm is the cheapest?
The cost of joining a prop firm can vary based on factors such as profit splits, fees, and services offered. While CTI and FundedNext are known for their competitive fees, it's important to consider the overall value and benefits provided by a prop firm rather than solely focusing on the cost.
Who are FTMO competitors?
FTMO's competitors in the prop trading industry include City Traders Imperium (CTI), SurgeTrader, FundedNext, and My Forex Funds.
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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1
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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2
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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Scalping
Scalping in trading is a strategy where traders aim to make quick, small profits by executing numerous short-term trades within seconds or minutes, capitalizing on minor price fluctuations.
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4
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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Copy trading
Copy trading is an investing tactic where traders replicate the trading strategies of more experienced traders, automatically mirroring their trades in their own accounts to potentially achieve similar results.
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Team that worked on the article
Chinmay Soni is a financial analyst with more than 5 years of experience in working with stocks, Forex, derivatives, and other assets. As a founder of a boutique research firm and an active researcher, he covers various industries and fields, providing insights backed by statistical data. He is also an educator in the field of finance and technology.
As an author for Traders Union, he contributes his deep analytical insights on various topics, taking into account various aspects.
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).