Remote prop trading firms vs traditional prop firms
The ultimate choice between remote prop trading firms and traditional prop firms depends on the following aspects:
Individual preferences for work style
Location flexibility
Access to resources and support
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Remote prop trading firms and traditional prop firms represent two different approaches to financial trading. While traditional prop firms are physical offices where traders work together, remote prop trading firms allow traders to work from anywhere using technology and internet connectivity. The distinction between these two models lies in the physical presence. The flexibility offered by the remote model makes it an intriguing option for individuals looking to enter the world of proprietary trading without the constraints of a traditional office environment. However, to consider the bigger picture, the experts at TU will look at the key differences that govern the two types of prop firms.
Fund your account with Fidelcrest!What is a remote prop trading firm?
A remote prop trading firm is a modern form of proprietary trading that operates entirely online, allowing traders to work from anywhere. These firms offer traders the opportunity to obtain a funded trading account without the need for a physical office or face-to-face interactions. While following similar regulations and principles as traditional prop firms, remote prop trading firms have gained popularity due to the growing trend of remote employment and the impact of the Covid-19 pandemic. Many individuals in the trading industry and other professions appreciate this alternative to the conventional office-based work environment as they can operate more independently. When trading for a remote prop firm, traders essentially work as freelancers, receiving trading guidelines and capital from the firm. Profits generated from trading are then shared between the trader and the trading firm. This model provides flexibility and freedom for traders to pursue their trading strategies while benefiting from the support and resources offered by the remote prop firm.
Best Proprietary FirmsPros and cons of remote prop trading firms
👍 Pros
•Flexibility: One of the main advantages of remote prop trading firms is the flexibility they offer. Traders can work from anywhere with an internet connection, allowing them to have control over their work environment and schedule. This flexibility is particularly appealing for individuals who value work-life balance and prefer to avoid long commutes to central offices
•Independence: Remote prop trading firms provide traders with a high level of independence. Traders have the freedom to implement their own trading strategies and make decisions without direct supervision. This autonomy allows experienced traders to showcase their skills and potentially achieve greater success
•Access to capital: Remote prop trading firms allocate trading capital to successful traders, providing them with the financial resources needed to execute trades. This eliminates the need for traders to invest their own substantial capital and reduces their risk exposure. As traders demonstrate consistent profitability, they may have opportunities to access increased capital, enabling them to pursue larger trading opportunities
•Growth potential: Proprietary trading firms, including remote prop firms, offer significant growth potential. Successful traders who consistently generate profits can experience exponential growth in their trading capital. This growth is often faster than the earnings of the trading firm itself, allowing traders to potentially multiply their profits over time
•Learning and support: Remote prop trading firms typically provide resources and support for traders to enhance their skills and knowledge. These firms may offer online training platforms, evaluations, and mentorship programs to help traders improve their trading techniques. Traders can benefit from the expertise and guidance of experienced professionals within the firm, fostering a continuous learning environment
👎 Cons
•Remote work challenges: While working remotely offers flexibility, it can also present challenges. Traders may face distractions or difficulties in creating a suitable work environment at home or other remote locations. They must also ensure reliable internet connectivity and a secure trading platform to execute trades effectively
•Limited social interaction: Remote prop trading firms lack the social dynamics and camaraderie that can be found in a traditional office environment. Traders may miss out on the face-to-face interactions, networking opportunities, and collaborative atmosphere that physical prop firms offer. This isolation may not be ideal for individuals who thrive in a social work setting
•Self-discipline and motivation: Working remotely requires strong self-discipline and motivation. Traders need to stay focused, maintain a structured work routine, and avoid distractions to maximize their productivity. Without the accountability and oversight of supervisors or colleagues, some traders may struggle to stay on track and meet performance expectations
•Limited resources and infrastructure: Unlike traditional prop firms, remote prop trading firms may have limited resources and infrastructure available to traders. Traders may need to rely on their own equipment, software, and data analysis tools. While some firms provide trading platforms and support, traders may have to bear additional costs or seek external resources to meet their specific needs
•Market volatility risks: Trading in financial markets always carries inherent risks, including market volatility. Traders in remote prop firms may face challenges in monitoring and reacting to market fluctuations promptly. It is crucial for remote traders to have reliable access to real-time market data and execute trades efficiently to mitigate potential risks associated with market volatility
What are traditional prop firms?
Traditional prop firms are companies that align their interests with those of their traders. These firms often provide a base income to their traders and may offer discretionary bonuses based on performance. Traders working for traditional prop firms typically operate from trading desks or floors located in major financial cities worldwide. These firms typically recruit either recent graduates from top universities or experienced professionals from institutional trading firms, making it challenging for retail traders to access these opportunities. When people in the industry mention "prop firms", they usually refer to this type of company. Traditional prop firms engage in various trading activities, including electronic market making and trading in exotic markets. The primary source of income for these firms is derived from the trading activities and earnings generated by their traders.
Should I Join a Prop Firm? Key Pros And ConsPros and cons of traditional prop firms
👍 Pros
•High earning potential: Working for a traditional prop firm offers the potential for high earnings. Traders can receive substantial base salaries, often starting in the range of $100,000 to $200,000 per year. Incentives and bonuses can significantly increase total compensation, with top performers earning well over $200,000 annually. Senior traders and partners can achieve even higher incomes, reaching hundreds of thousands or even millions of dollars. It is important to note that these numbers represent the earning potential of top performers in cream-layer prop trading firms
•Career progression opportunities: Respected traditional prop firms invest in their traders' growth and offer opportunities for career progression. Traders can advance within the firm, taking on more significant responsibilities and potentially increasing their earning potential over time. These firms often provide training, mentorship, and resources to help traders develop their skills and expand their knowledge
•Learning and development: Traditional prop firms tend to prioritize the learning and development of their traders. They offer structured training programs and continuous educational opportunities to enhance traders' expertise in various trading strategies, market analysis, and risk management. Traders can benefit from the experience and insights of seasoned professionals within the firm, contributing to their professional growth
•Prestige and industry connections: Joining a traditional prop firm can provide a sense of prestige and recognition within the trading industry. These firms often have established reputations and strong connections with institutional clients and market participants. Working for such a firm can open doors to valuable networking opportunities, allowing traders to build relationships with industry professionals and potentially gain access to exclusive trading platforms or markets
👎 Cons
•Performance-based compensation: While high earning potential exists, the compensation structure in traditional prop firms is often tied to performance. Traders must consistently perform well to receive bonuses and incentives. If they experience losses or underperformance, their compensation may be significantly affected, and there is a risk of being fired if performance does not meet expectations
•Competitive selection process: Traditional prop firms often have competitive selection processes, favoring graduates from top universities or experienced professionals from institutional trading firms. This can make it challenging for individuals without such backgrounds or connections to enter these firms, limiting access to these opportunities for retail traders or those from non-traditional backgrounds
•Pressure and performance expectations: The nature of trading in traditional prop firms involves high-pressure environments and performance expectations. Traders may experience stress and intense scrutiny, as their performance directly impacts their compensation and career prospects. The need to consistently meet or exceed targets can create a demanding work atmosphere, which may not be suitable for everyone
Best remote prop trading firms
Prop Trading Accounts ComparedAccording to experts, the following are the best remote prop trading firms:
Fidelcrest
Fidelcrest is a leading Forex prop firm headquartered in Nicosia, Cyprus. They specialize in catering to skilled Forex traders by offering real-funded trading accounts that meet specific requirements. With instant and automatic account delivery, Fidelcrest provides a wide range of account size options for traders of all expertise levels. They offer profit-sharing of up to 90% and provide features like low funding options for newer traders, news-based trading, and the ability to hold positions overnight and on weekends.
SurgeTrader
SurgeTrader is a comprehensive Forex trading firm that stands out for its trading insights and tools. Based in Florida, they offer an easy-to-use interface that traders can customize according to their needs. Surgetrader allows trading in various financial instruments beyond just Forex, including indices, metals, and cryptocurrencies. Once traders pass the Audition, they gain access to real accounts. The firm provides features like profit-sharing of 75%, withdrawal of profits with ease, news-based trading, and the flexibility of no minimal trading days or time pressure. They also offer up to $1 million in funding opportunities.
Is Trading for a Prop Firm Worth It? How Much Can I Earn?FAQs
What are the different types of proprietary trading?
The different types of proprietary trading include market making, statistical arbitrage, high-frequency trading, event-driven trading, and algorithmic trading.
What is the difference between prop firm and retail trading?
The main difference between prop trading firms and retail trading is that prop firms provide traders with access to funded accounts and resources, while retail trading involves individual traders using their own capital and trading on public platforms.
What is the difference between prop trading and trading?
Prop trading refers to trading activities conducted by individuals or firms using their own capital, while trading, in a general sense, can refer to any buying or selling of financial instruments, including activities by both professional traders and retail traders.
Is FTMO the best prop firm?
The assessment of the best prop firm is subjective and depends on individual preferences, trading strategies, and goals. While FTMO is a reputable prop firm known for its evaluation and funding programs, determining the "best" prop firm would require considering various factors and personal circumstances.
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).