Beginners should clearly understand proprietary trading.

Proprietary Trading (What is Proprietary Trading Company)

Proprietary trading is a business model different from general investing. These companies operate by allocating capital to traders, sharing profits instead of using a public account.

The full name of Prop trade is Proprietary trading, which means trading with the company’s own funds. These companies do not act as intermediaries but are the providers of rights and capital to trade various assets such as stocks, futures, currencies, derivatives, etc.

What sets them apart from regular trading firms is that traders do not need to contribute large amounts of money initially but must go through a rigorous “evaluation” process because the company needs to assess the trader’s ability before providing funding.

Forex Proprietary Trading for Those Interested in Currency Trading

For those seeking expertise in the currency market, Forex Proprietary trading is a suitable option. Currently, there are two options available:

First type: Physical Office - Traders are hired as full-time employees, receive a salary, bonuses, and have opportunities for advancement based on performance.

Second type: Online New System - Traders register online, pay an initial evaluation fee, and if approved, receive capital to trade.

In recent years, especially after 2020, online Proprietary trading companies have grown rapidly because they allow traders to work from anywhere and access the market directly. These traders are fully responsible for their trading decisions, requiring deep knowledge in risk management, trading strategies, and strong mental discipline.

How It Works and How to Apply for Beginners

###Application Steps and Evaluation Process

Interested traders must go through the following steps:

Step 1: Find and choose a company - Study the company’s reputation, platform used, and profit-sharing conditions. (Some offer 50-50, others 25-30%, depending on skill and experience.)

Step 2: Check application requirements - Each company has specific requirements such as minimum age, experience level, and education.

Step 3: Submit online application - Summarize trading experience, skills, and goals.

Step 4: Interview - If shortlisted, there will be an interview to discuss skills, strategies, and market understanding.

Step 5: Evaluation period - Upon passing the interview, the company will provide funding for a testing phase, usually lasting 30-60 days. Traders must demonstrate consistent profitability and adherence to company rules.

###Why is an evaluation process necessary?

Because Proprietary trading companies risk their own capital, they need to carefully assess traders’ abilities. This process, called a “challenge,” involves an initial fee, and traders must prove their skill and consistency in generating profits.

Advantages and Challenges to Expect

###Advantages of Proprietary Trading

Freedom to set your schedule - You can choose your working hours and location, no need to be in an office.

Multiple profit opportunities - If successful, profits are unlimited, though initial evaluation costs are involved.

Low personal risk - Since the capital belongs to the company, traders only risk the application fee.

Access to large capital - Proprietary trading firms provide significant funds, so traders don’t need to prepare huge amounts of money.

Community and support - Many companies have trader communities sharing techniques and support via phone, chat, or other channels.

###Risks and Challenges to Be Aware Of

High discipline required - Proprietary trading demands focus and mental strength. Monitoring charts, establishing daily routines, and following plans are essential.

Psychological issues - Anger, overexcitement, revenge trading—these do not benefit the account. You must master your emotions.

Evaluation fees - Limited income may make multiple applications financially burdensome.

Unsteady income - No guaranteed monthly salary, sick leave, or social security like regular employees.

Risk Management Strategies You Should Know

###5 Key Strategies for Aspiring Proprietary Traders

1. Control risk per trade - Avoid risking too much on a single trade. Only risk money you can afford to lose without panic. Manage your capital carefully to preserve your account.

2. Control your emotions - Market volatility can evoke many feelings. Don’t try to recover losses with high-risk trades. Stick to your plan even if the market moves against you.

3. Stick to what works - If your strategy is effective, avoid frequent changes. Continuous learning is important, but consistency is even more so.

4. Use Support and Resistance analysis - Identify key price levels. Selling at Resistance can be profitable; buying at Support is a good opportunity. This system helps manage risk effectively.

5. Use RSI indicator - RSI (Relative Strength Index) measures the speed of price changes. Like an RSI meter from 0-100, if RSI >70, the asset may be overbought; if <30, it might be a good buying opportunity.

###Preparing for the Evaluation Phase

Enhance knowledge - Study different types of Forex trading, risks, and trading tools.

Develop your own strategy - Write a clear trading plan, set risk management rules, and exit strategies. The key is to write and follow your plan.

Test before risking real money - Use demo accounts or backtesting to evaluate your strategy before trading with real funds.

Risk only what you can afford to lose - Do not use borrowed money or funds needed for rent, food, etc.

Summary

Proprietary Trading offers an exciting opportunity for those with effort, skills, and high discipline. However, it is not an easy way to earn income. Becoming a Prop Trader requires continuous learning, strict risk management, and unwavering dedication.

Before applying to any Proprietary company, research their reputation, conditions, and choose one aligned with your goals. With proper preparation, the right strategies, and a ready mindset, becoming a Prop Trader can be a rewarding experience that could even change your life.