Before diving into the 4 things prop firms don’t want you to know, I want to disclose that I am the owner of a prop firm. This information might seem counterintuitive to my interests, but at Maverick Trading, we believe in transparency. Over our 27-year history, we’ve found that deeply educated traders are the key to long-term success. Our firm operates on the principle that a win/win relationship is essential for both the firm and the trader. This approach has allowed us to develop some of the best traders in the industry.
The best prop firms create an environment where traders can maximize their returns while minimizing fees. These firms must also balance paying for infrastructure, support, and technology from both trader earnings and desk fees. When both sides’ needs are met, prop trading can be a rewarding partnership. However, some firms have set up restrictive trading limits and fees that work against traders, and they don’t want you to know this.
1. Most Prop Firms Will Take Anyone
In the past, traders would select a firm, start at the bottom, and stay loyal due to limited choices. These firms invested heavily in trader development, technology, and coaching, hoping for long-term payoffs. Today, however, many firms operate on a “challenge” model, where anyone can join by paying desk fees. It’s one of the things prop firms don’t want you to know—they’ll take in 100 traders, collect fees, and end up with just 3-5 successful traders. When considering what is the best prop firm, remember that exclusivity is often an illusion.
2. The Rules Are Stacked Against You
These challenge-based firms often impose restrictive risk management rules. These limits are so tight that traders are almost guaranteed to fail due to normal drawdowns or lack the freedom to make profitable trades. While they emphasize the amount of capital you can trade with, prop firms don’t want you to know about the strict trading limits at the entry level. Even if you succeed in the initial challenges, failure at a later stage often means starting over from scratch.
3. Don’t Keep Excess Capital in Your Prop Trading Account
I always advise Maverick Traders against keeping significant profits in their prop trading accounts. Any earnings from that capital are subject to the trading splits between you and your firm. It’s better to keep only the minimum required by the firm or enough to handle a drawdown, then move the rest to a personal account. This way, you can trade the same way and keep 100% of your profits. When considering how profitable is prop trading, this is a key factor to keep in mind.
4. Capital Advancements Are Negotiable
A good prop firm knows that the best traders deserve the most capital. While prop firms don’t want you to know that capital advancements are negotiable, you should approach them with your trading history and negotiate for more capital after proving yourself. Although firms may have structured capital advancement plans, they are often open to allocating more capital to traders who deliver superior returns. This flexibility is crucial when evaluating how to become a professional trader.
4 Things Prop Firms Don’t Want You to Know Conclusion
As a trader, it’s your responsibility to ask tough questions and thoroughly research any prop firm before joining. Understanding the success rate of prop traders and whether prop firms really pay out can be vital in making your decision. At Maverick Trading, we encourage transparency and full disclosure, believing it leads to long-term success for both the trader and the firm. If a prop firm isn’t willing to answer your questions, it might be wise to find one that will.
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By Robb Reinhold
