Best Working Hours Of Prop Trading: Work Smarter, Not Harder
Though the hours a prop trader works will vary depending on their experience, location, prop firm and the market they’re trading in, they typically work long hours. A work week generally consists of roughly 50 hours, though workdays can be as long as 12-14 hours a day.
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Prop trading, short for proprietary trading, is the practice of financial firms or commercial banks engaging in trading for direct profit, rather than on behalf of investor clients for a small commission or fee. A prop trader is someone who engages in trading on behalf of proprietary trading firms, using the firm’s own funds. Essentially, a prop trader works for a prop firm, generating profits for them using their own capital, usually for a salary, with a percentage of profits going to the trader.
The life of a prop trader can be a stressful one, due to long work hours and the pressure of having to make continuous profits to make a living and succeed in their career. However, with the right approach, a trader could minimize their work hours and still perform well. As the famous saying goes: “Work smarter, not harder”. In this article, Traders Union will examine the typical working hours of a prop trader and the factors that affect the working hours of prop traders, while providing tips for aspiring prop traders.
Fund your account with Topstep!Typical working hours
For the purpose of consistency, this article will focus on legitimate prop trading firms. These are usually large firms, who pay prop traders a competitive salary and hire them with the potential for career progression. Independent prop traders who work less directly for prop trading firms can usually work their own hours.
The hours that are typically worked by prop traders will vary widely, but overall are influenced by several factors. The hours depend largely on the firm that they’re working for, the location of the prop trading firm, the seniority of the trader, and the market that the prop trader is engaged in.
Market hours
Generally, the prop trader would be required to work during market hours, though the market hours will depend on where the prop trader is based and what markets they are engaged in.
For example, let’s say a prop trader is engaged in trading in the foreign exchange market, but is based in London. To take advantage of the trading opportunities provided by the American Forex market session, which runs from 8AM to 5PM EST, they would need to work until late, as these hours are 1PM to 10PM in London.
Alternatively, if they were trading stocks, the New York Stock Exchange (NYSE) is open from 9:30AM to 4PM EST, which is 2:30PM to 9PM GMT in London. If the trader was based in The U.S.A., these hours might be ideal and would resemble the work hours of a standard office job.
Extra hours
Prop traders trading stocks may also need to work during pre-market hours from 8:00AM to 9:30 AM, which would entail starting very early in the day. Additionally, they might be required to work during post-market hours, from 4:00 PM to 8 PM GMT.
On top of trading work during market hours, pre-market hours, and after-market hours, traders may also work additional hours to research markets, and work on their trading strategies. Junior traders with less experience might be asked to work late and do “wrap-up” work. If working as part of a team, prop traders might need to come in for early morning meetings. They might be required to work overtime during periods of high volatility too.
Overall, a prop trader is looking at a work week of roughly 50 hours, though this could reach as much as 12-14 hours per day. In the end, what a prop trading firm really cares about is their profit and loss ratio. If prop traders are continuously producing positive results, amount of hours they’re working isn’t going to matter as much.
Hours will vary hugely based on the type of prop trading job you have.
Factors that can affect working hours
As mentioned above, several factors will affect the hours you work as a proprietary trader. Let’s look at those factors in more detail:
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Financial market. The type of financial market a trader operates in will affect their hours. If primarily engaged in Forex trading for example, they could potentially work 24/5 hours, though times of high volatility, such as those during the London and New York market sessions (and their overlaps) would be prioritized. If trading stocks, hours that correlate with the opening of the New York Stock Exchange might be prioritized, as it’s the most active stock exchange
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Trading firm. The type of trading they work for has an impact on the workday’s structure. A larger firm may allow more flexible hours for their traders, while a smaller prop firm with less capital and a higher need for a competitive edge would likely expect longer work hours. Remote or virtual trading firms may offer more flexibility compared to those with a physical trading floor
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Experience. A novice trader may need to spend more time learning and analyzing, leading to longer work hours. As the prop trader gains experience, they often become more efficient, potentially allowing for more focused and productive hours. A more experienced prop trader would have more flexible work hours once they have a proven track record
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Trading strategy. Different trading strategies require different levels of attention. High-frequency trading demands constant monitoring, potentially leading to longer hours. If using positional or trend-following strategies, less frequent adjustments might be needed, meaning less hours. Using automated strategies may reduce manual monitoring time but would still require periodic checks and adjustments
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Trading style. Day traders typically have more compressed and intense working hours, focusing on intraday movements. Swing traders may have a more flexible schedule, and only need to monitor markets periodically. Long-term investors may have a more relaxed pace with less frequent activity
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Personal preferences. The individual preferences of a prop trader could also affect work hours. Some traders may prefer early mornings, while others might focus on late-night trading sessions. If their trading strategy is getting results, the proprietary firm they work for will likely allow them flexibility
Best Prop trading firms
Additional tips
The experience of every prop trader will vary, and no two prop trader jobs will be the same. However, Traders Union can provide some general tips on what to expect.
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Long hours. Be prepared to work long, stressful hours. If you’re going to be covering multiple markets in different time zones, your hours are likely going to be very long. You could find the long hours draining, and they could cut into your personal life, so be adaptable
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Stressful environment. Trading in general can be stressful enough. That pressure can be exacerbated when your job and career depend on your performance and results. If working on an office floor with other traders, the stress can be even worse. Be prepared for high levels of stress
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Balance. Try to develop a healthy work-life balance to avoid burnout. If possible, set limits on yourself. For example, you could set a personal rule to not look at financial markets outside of work hours, or spend time with friends outside of the financial industry. Letting work consume your personal life can lead to burnout, which in turn causes poor decision-making and lower emotional discipline
Conclusion
Overall, although the work hours for a prop trader working for a proprietary trading firm will differ from firm to firm, they generally will be long. If you’re familiar with working in a standard 9-5 job, prop trader hours will typically be longer than these. Be mentally prepared for a work week of around 50 hours.
FAQs
What kind of hours do traders work?
Work hours depend on several factors such as the type of firm, the assets being traded, and the prop traders experience. Market hours play a large role, so prop traders should expect to at least be working during the market hours of their traded asset.
How many hours do you work for day trading?
Typically, a prop trader will work a 50-hour work week, though this might extend to as much as 12 – 14 hours a day if they’re trading in multiple market sessions. This should also decrease as they climb the career ladder.
Can you make a living with prop trading?
Yes. Prop traders earn a percentage of the profits they make, ranging from 30% to 90% or even more. Larger firms usually offer a salary, as well as commission, though commission rates may be lower when combined with a fixed salary.
How much does the average prop trader make?
Prop traders can make anywhere from $60,000 to $165,000 a year, though the average is around $100,000 annual salary. This number will vary depending on individual roles. Salary should increase as a trader goes from assistant trader, to junior trader, senior trader, and then partner.
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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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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Volatility
Volatility refers to the degree of variation or fluctuation in the price or value of a financial asset, such as stocks, bonds, or cryptocurrencies, over a period of time. Higher volatility indicates that an asset's price is experiencing more significant and rapid price swings, while lower volatility suggests relatively stable and gradual price movements.
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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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Team that worked on the article
Jason Law is a freelance writer and journalist and a Traders Union website contributor. While his main areas of expertise are currently finance and investing, he’s also a generalist writer covering news, current events, and travel.
Jason’s experience includes being an editor for South24 News and writing for the Vietnam Times newspaper. He is also an avid investor and an active stock and cryptocurrency trader with several years of experience.
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).