How Much Money Can You Make With Forex Prop Firms

  • November 20, 2022

Over the last few years, forex prop firms have taken the retail trading industry by storm. Prop firms have allowed traders with good talent and low capital to make a living from their profitable trading efforts, without needing 20 years of compounding their £1000 accounts. Due to all the marketing these prop firms are now doing, we constantly see $100,000 withdrawals and other huge payments coming in by successful traders. It’s hard to know what’s a lie and what is actually achievable by trading with a funded account.  

In this article, we’re going to look at how you make money with prop firms, how much money you can make, and how to actually maximize the profits you pull out of your funded trading account. Let’s get into it!

Making Money With Forex Prop Firms

Making money with prop firms is a fairly simple process. Well, it’s simple, but not easy to do. When you start working with an online prop firm, like Lux Trading Firm, you’ll have to pass a trading challenge. This is meant to weed out unprofitable traders and ensure that we are providing trading capital to profitable traders only. Assuming you are successful, you’ll receive login details to a funded trading account. This account will be funded with capital from us, rather than you. Although you cannot move the money, add money, or withdraw money directly, these are ‘your’ trading funds. Each prop firm has a different set of rules for traders to abide by and a different profit percentage split. For instance, a 75% profit split. This means that whatever profit you can make trading with your funded trading account, provided you don’t break any of the rules, you’ll get to keep 75% of this. The remaining 25% will go back to the prop firm, in exchange for supplying the capital. So, how much money can you actually make?

How Much Money Can You Make Trading With Prop Firms?

The amount of money you can make is very much dictated by your trading ability and performance. The question ‘how long is a piece of string?’ comes to mind when I’m asked this question.  

Let’s crunch some hypothetical numbers to give you a rough idea of what might be possible for profitable retail traders…

Hypothetical A:

  • 5% Average Monthly Profit
  • $100,000 Funded Trading Account
  • 70% Profit Split 

This would result in a monthly profit of $3,500 for the trader.

 Hypothetical B:

  • 10% Average Monthly Profit
  • $1,000,000 Funded Trading Account
  • 50% Profit Split

This would result in a monthly profit of $50,000 for the trader.

 Hypothetical C:

  • 8% Average Monthly Profit
  • $25,000 Funded Trading Account
  • 80% Profit Split 

This would result in a monthly profit of $1,600 for the trader.

Now, I would say that Hypothetical A is much more realistic for a trader to achieve. In fact, returns of between 2-5% are what I would expect a profitable trader with a decent risk appetite to be achieving. The only way to actually know how much money you’ll make with prop firm trading is to try it for yourself. If you’re looking to get a funded account, look no further!  

If you’re trying to figure out your potential returns, whilst looking at your current returns on your own capital, it’s important to consider that you might need to be dropping your risk to a lower percentage per position. Many traders, on their own capital, go for 1-2% risk per trade. However, prop firm traders typically risk a much lower percentage per trade, due to strict drawdown rules. It may be useful to read our article on ‘Realistic returns from the forex market’.

How To Maximize Your Profits From Prop Firm Trading

There are three main options for traders looking to maximize their earnings from prop firm trading firms. Let’s take a look…

1. Capital Scaling

The best option you’ve got in your toolbox is capital scaling. Now, it’s important to work with a prop firm that actually offers capital scaling, as many of the new shiny prop firms don’t do this. Capital scaling is very simple. When you reach certain milestones, in terms of profits, the prop firm will increase your trading capital. For instance, when our Elite Trading Club traders make a 10% profit, we double their trading capital. We do this as we begin to trust the trader with more trading capital and the more money they manage, the more money we will get in profit splits. If your funded account does not offer capital scaling, I’d recommend potentially moving prop firms to a firm where this is an option.

2. Compounding

Compound interest is one of the wonders of the world when it comes to investing. In the same way, you can compound your personal trading capital, the majority of funded accounts will allow you to do this as well. This will obviously lead you to have more capital in your trading account, but it does come with a lot of risks. If you’re using one of these shiny new prop firms with no physical presence, you need to be aware of the risk of them disappearing with your trading profits. Many prop firms have shut up, after starting up shop overnight, in the last few years. With this in mind, to be safe, I’d say that withdrawing all profits when possible is usually the best bet.   

3. Using Multiple Prop Firm Accounts

Another great option is to have multiple funded accounts on the go at the same time. There is usually a maximum amount of accounts/capital that a firm will let you have at any one time, but this is usually very high. The idea here is that you trade the same setups, across multiple trading accounts. You can either use the same risk profile or slightly change your profile to be a higher risk or lower risk. This might be ringing alarm bells, as it can be hard to log in and out of trading accounts quickly, especially if you’re an intraday trader. However, you can use a trade copier to automatically replicate your trades across multiple accounts that you own, if the prop firm allows it.

I’d recommend using a tool like MT4 Copier.

By utilizing this, you’ll be able to replicate a trade, automatically, across all of your funded trading accounts. You won’t even notice a difference in your workflow, but you could see profits double or triple overnight… Worth a look, right?

In Summary – Can You Make Money With Forex Prop Firms?

In conclusion, you can make money with prop firm-funded accounts, if you’re a profitable trader. How much money you’ll make is very much dictated by how profitable you are, the prop firm you’re with, how much capital you have under management, your profit split, and the percentage return you can pull in, in that month. If you’re looking to maximize your profits, using a combination of replicating trades, compounding and capital scaling is a surefire way to go.  

Are you looking to become a funded trader? Find out more now!