Why You Should Be Trading With A Forex Prop Firm

  • June 12, 2022
Why You Should Be Trading With A Forex Prop Firm

With the rise of online prop firms, forex traders now have more opportunities than ever before to grow their capital under management and further their trading careers. However, there are still a huge amount of traders that are skeptical about becoming a funded trader and aren’t sure of the pros and cons of doing so. In this article, we are going to dive into the benefits of prop firm funding and why you should in fact be looking at trading with a prop firm!

Trading with an online prop firm allows traders to scale their capital under management, hone their risk profiles, reduce risk, progress within their trading careers, and get rewarded for high-quality trading performance.

Why You Should Be Trading With a Forex Prop Firm

As online prop firms have only been in the industry for a few years now, there is still speculation from some traders about the actual benefits. Of course, we are slightly biased, but there are actually a huge number of reasons why you should be trading with a prop firm, rather than just on your own trading capital. Once you’re a profitable forex trader with a versatile trading strategy, there is no secret to expanding your assets under management…

If you want to grow your capital, it’s as simple as:

  1. Sign up for a funded trading account (https://luxtradingfirm.com)
  2. Trade within the rule set provided
  3. Withdraw your profits  

This is the exact approach that thousands of traders are taking to grow their capital and withdrawal amounts.

Trading capital and lack of structure have always been the biggest factors holding forex traders back from reaching the levels of success they are looking to reach – but no more!

Becoming a Funded Trader

 Becoming a prop firm-funded trader gives you access to a huge amount of capital and much larger withdrawals than retail traders typically see. As lovely as this is, from a financial perspective, it also provides traders with a much better environment to succeed within. 

What do we mean by this?

Well, if you’re trading on a small amount of capital, risk management and emotions go completely out the window. Traders are always in a huge hurry to make as much money as possible on their small accounts and this causes mistakes, ridiculous trades, and creates a lack of consistency. This is the main reason why many traders quit forex trading. By having access to a large amount of trading capital, the pressure is off to make these earth-shattering returns.

Instead, focusing on small and consistent returns becomes the main focus for the trader. This causes a huge change in mindset and trading results too.

Strict Risk Management

Trading with a prop firm almost forces traders to learn risk management and level up their trading performance. The main reason traders fail and lose money within the market is due to a lack of risk management. It’s very hard for newbie traders to regulate their risk tolerance and drawdown thresholds if no one is telling them when they’re slipping up.  

In come prop firms…

 With a funded prop firm account, you’ll have a preset level of drawdown and maximum risk that you’re allowed to use. If you violate this, you will lose your funding.  

Take the Lux Trading Firm funded accounts for instance… We have a maximum drawdown of 4%.

Not only that, but our Elite Trading Club traders also have access to a professional risk desk, and professional analysis.

This teaches our funded traders to manage their risk and emotions within the markets. It’s great to see because traders come to us after risking 5% or even 10% per trade – so seeing their growth into more of a fund management mindset is good. Although some traders see risk management as a negative, this is actually a huge benefit, and we’ve seen countless traders thrive after learning to adhere to our risk profile. When you think that risk management is just to make things harder for you – remember that profitable traders are how prop firms make money, we want you to win!

Career Progression

Prop firms can allow a huge amount of career progression that you wouldn’t be able to have if you were out trading on your own. What do we mean by this?

 Let’s take a look at our Elite Traders Club. With this funded account, within 6-8 milestones, it’s possible to get to $10,000,000 in funded capital.

 There are a few huge benefits to this…  

Firstly, this obviously allows for huge withdrawals and will massively increase how much money you can make (if you’re consistent). A 5% quarter on this amount of trading capital would put a $250,000 withdrawal in your pocket! Secondly, having a large amount of capital opens up doors for other aspects of your career. You’ll be able to diversify your income streams and even get through the door of traditional asset management firms if you’re looking to take on more capital. For retail traders, there has historically been absolutely no career progression, and that’s one of the main reasons that so many traders drop out after a few months. That’s all changed now!

Getting Rewarded For Your Efforts

Many traders are never rewarded for their hard work or efforts within the markets. Why? Well, the majority of traders are coming into the forex markets with £1000 or even £5000 in trading capital. Some traders are even coming in only a few hundred pounds. Even if you’re an incredibly consistent trader, averaging a 5% return per month, you’re only going to be withdrawing £50 per month. This can be very demoralizing for traders and actually forces traders to increase their risk appetite. Instead of risking 1% per trade, traders are often ‘forced’ into risking 5% or even 10% per trade, to be able to withdraw any meaningful amount of capital. Off the back of increased risk, traders either blow their trading capital or give up on trading as they simply don’t have enough money to continue the hobby. By trading with a prop firm, you actually get rewarded each month for your efforts, even if it’s only a 5% per month gain! For instance, with our funded trading accounts, you would receive 75% of the profits that you make each month, with 25% going to us.

Imagine you’re using a £200,000 funded account from Lux Trading Firm. If you managed to return 5% in one month, you would receive a £7,500 withdrawal!

Low Risk For The Trader

One of the most appealing benefits of using a prop firm is that this massively reduces your risk exposure. How so? Well, you’ve heard before about traders remortgaging their house and putting their lives savings into the market, right? By utilizing a prop firm, you can pay a one-time fee for the trading challenge, and then there will be no touching your capital!  

For instance, with our Elite Traders Club, you would be paying a one-time fee for an evaluation, then within 8 milestone stages, you would be growing your trading capital up to $10,000,000 under management.

It’s also worth mentioning that any losses you take on a funded trading account will never need to be paid with your own capital. This makes you completely immune, once you’re funded, there is no chance of spending any of your own personal funds. Great!

In Conclusion – Should You Become A Funded Forex Trader?

In summary, there are multiple reasons why you should become a prop firm-funded trader. If you’re reaching profitability within the markets, why not check out the Lux Elite Traders Club to look at getting funding for your trading efforts.  

If you have any questions about obtaining trading capital, please do contact our support team, and they will be able to assist!