What is proptrading
In this post we will talk a little bit about the proptrading industry. You will learn what proptrading is, who a proptrader is and how you can make money with us. Enjoy this short post that will clear up all your doubts.
Proptrading, or further development as a trader:
Proptrading is a kind of cooperation model between a proptrading company and a trader, which is based on a relationship in which the trader:
- provides his skills and knowledge
- pays a low implementation/challenge cost
In return he/she receives:
- capital to trade
- training and education
- opportunities to scale your account
- trading strategies and often networking
Often, proptrading companies specialise in accounts that only allow you to trade currencies or shares, for example. At Spiceprop, you have the possibility to create a multistrategy based on all the trading instruments available on the platform. This gives you the opportunity to diversify your positions in one account.
What does a trader earn?
A trader, after successfully completing the challenge process, is given capital to trade. His or her job is to generate profit, from which he or she receives a share of the profit generated. On average, this is a 50:50 split - 50% is received by the trader, 50% by the proptrading company. In the industry you can already encounter higher profit splits - for example, at SpiceProp you have the possibility of receiving close to 70% of your profits. Therefore, as you can see, the trader's job is to maintain a profitable consistency in his accounts that will allow him to generate profits on a regular basis.
What about losses?
The trader is not liable for losses generated in the account. However, the proptrading company may require him to apply, for example, an appropriate stop loss policy as part of risk mitigation. Spiceprop respects traders' different strategies - even those which do not use a stop loss. We do, however, require the trader to keep an eye on the risk in terms of maximum daily slippage and maximum account loss. The proptrading company takes the losses generated on the account on itself.
Why engage in proptrading?
First and foremost, for traders with skill but too little trading capital, proptrading is an opportunity to prove themselves and gain significant trading capital. The high leverage (we allow 1:100 on some programmes) increases the trading and buying capacity of the whole account. So novice traders and those with experience can test themselves and gain consistency by sticking to a specific risk plan.
An experienced trader with capital by engaging in proptrading obtains a kind of capital diversification. A good scaling programme additionally enables him/her to obtain not only higher profits, but also a growing level of account capital. Traders who are consistent and able to generate non-accidental returns will benefit from one of the greatest account scaling programmes. At Spiceprop, we allow you to copy plays from other accounts in our fund. Therefore, you can run positions in one account and copy to other accounts increasing your profits at the same time.
In addition, traders with experience do not need to undergo challenges. If they are confident in their trading skills, they can undertake work on no - step accounts, i.e. funded immediately. This allows without the pressure of time and the pressure of challenges to start working right away on real funds. It is a convenient way of raising capital, where the trader only pays a small fee to cover the drawdown. On the other hand, the scaling programme itself, once a 10% profit is achieved, allows the capital to be doubled for trading. Consequently, capital can grow at a very fast pace.
Key advantages of proptrading:
- you are not liable for losses
- you have the chance to trade a huge amount of capital
- you receive a significant share of the profits
- working with challenges allows you to achieve trading consistency
- you have access to advanced educational resources, tools and networking