Because of capital limitations, individuals with limited resources will be more cautious about their securities and Forex investing. It's a shame because it leaves a lot of astute and talented traders trudging along with limited profits. While there are few ways to get extra capital, a relatively new option is worth considering. That would be proprietary or prop trading.

If you know very little about the prop trading concept, that is about to change. If you are willing to expand your investment mind a little, you can walk into the world of prop trading and increase your chances for future trading success.

Defining Prop Trading

The prop trading concept is new. The banking and investment industries introduced it to get more directly involved in investing. It allows them to supplement income beyond collecting fees and commissions as a trading facilitator. The concept works as follows.

An experienced and astute investor will approach a futures prop firm to initiate a possible partnership. If a prop trading firm wants to get involved with a particular prop trader, they will vet them. If everything looks good, the prop trading firm will bring them into the fold.

At that point, the investor (prop trader) will open and fund a trading account with the prop trading firm in question. The investors will deposit as much as they can. Their motivation is to go all incomes from the prop trading firm, matching that deposit by as much as 4x the amount. That represents the trading firm's investment in the trader.

Most people consider the prop trading firm's investment portion to be a passive investment. That's largely true since the prop trader will decide and initiate the actual trades. In the end, the profits are shared based on investment ratios.

There is one caveat. It would be naive to think a bank or investment firm will invest capital in something without some level of involvement.

The Insights to Be Offered By Prop Trading Firms

Assume you have aligned yourself with a prop firm and set out to start your investment activities. Do you want to go alone when you have access to good information from excellent sources? If you were astute enough to be accepted by a licensed trading firm, the clear answer would be no!

Here's the thing. Your trading firm is your partner. They have a vested interest in your success as a trader, perhaps a vested interest larger than yours. While they want you to initiate the trades and run the investment show, they will also want to ensure you have access to any relevant information that might cause you to avoid losses or accumulate more profits.

Trading for success requires two components. First, you need to work hard at employing the investment strategies that made you successful in the first place. Second, you must be humble enough to accept help and advice from investment professionals who might know more than you about market trading. This is what it will take to become a successful prop trader for everyone's benefit.

Quick Tips on Becoming a Professional Prop Trader

As long as you love being involved in the securities and or Forex trading game, there exists the real possibility the extra capital afforded you by aligning with a prop trading firm will make a huge difference. You just need to know how to get into the door. With that in mind, here are some tips to become a pro prop trader.
  • You must commit to the process if you want a prop trading firm to pick you up. Before approaching one, work hard to establish a record of trading success.
  • You must pass these licensing exams: the SIE and the Series 57 Top-Off Exams.
  • Find a solid mutual relationship with a licensed and registered prop trading firm.


There is your path to trading for success. It involves believing in yourself and tapping into what a trading firm offers.