📝 Resources

Deep-dive explainers

Each of these is a standalone explainer that provides more detail than a standard listing. Read the guides relevant to your situation before paying for any evaluation.

What to read before paying an evaluation fee

• Evaluation models — 1-step, 2-step, instant funding and scaling compared.
• Drawdown rules — daily vs. max, fixed vs. trailing, with worked examples.
• Profit splits & payouts — why the headline number tells you less than you think.
• Regulation — why most funded firms sit outside broker-style regulation.
• Taxes — general notes on how payouts are typically treated.
• Platforms — MT4/5, cTrader, TradingView, NinjaTrader, Tradovate and more.
• Trading psychology — the behavioural layer of evaluation failure.
• Why traders fail — the structural causes behind most breached accounts.
• Red flags — a due-diligence checklist to run before sending money.

How Prop Firms Generate Revenue — and Why It Matters to Traders

A retail/funded prop firm generally has two main revenue sources: evaluation fees paid by candidates and a share of profits generated by traders who pass and remain funded. The balance between these revenue sources influences the firm's incentives and, indirectly, the rules traders operate under.

A firm that relies heavily on challenge fees has an incentive to maintain a broad funnel and high turnover—low entry prices, frequent promotions, and sometimes attractive-looking targets combined with strict daily drawdown limits that keep reaching a payout challenging. A firm that earns a meaningful share from funded-trader profits has a different incentive: fewer but more sustainable funded traders, stricter consistency rules, slower scaling, and payout schedules that encourage continued performance.

Neither model is inherently good or bad. However, understanding where a firm sits between these models can change how you interpret its rules. A simple rule of thumb: if a firm promotes evaluation discounts more prominently than payout statistics, consider it more funnel-driven and examine the daily drawdown rules carefully.

What to Read Throughout the Directory

Evaluation Models

Funded firms differ in how traders are required to demonstrate their ability: single-phase evaluations, two-phase processes, no-time-limit models, restricted instant funding, and hybrid scaling options. Each approach involves different trade-offs in cost, time, and trader suitability. The futures hub covers exchange-specific evaluations, while the comparison tool lets you compare them by firm.

Drawdown Rules

Daily versus maximum, fixed versus trailing, and balance-based versus equity-based drawdown can determine much of what happens inside a funded account. Two firms may both advertise a “10% maximum drawdown” while applying it very differently in practice. The glossary explains the key terminology, while the futures section provides worked examples comparing trailing and fixed models.

Profit Splits and Payouts

Advertised profit splits such as 80%, 90%, or 100%-then-90% do not tell the entire story. Payout timing, minimum withdrawal requirements, scaling, and whether the split remains fixed or increases over time can be equally important for compounding. Quant firms follow a different compensation model, using base salary plus bonus rather than profit sharing, and are listed separately in the quant directory.

Platforms and Execution

MetaTrader 4/5, cTrader, and TradingView are widely used across retail and funded firms, while NinjaTrader, Tradovate, and Quantower are prominent in futures. The platforms supported by a firm can provide insight into its execution setup and, in turn, the trading styles it is prepared to accommodate.

Common Mistakes When Choosing a Firm

• Looking Only at the Advertised Profit Split. Two firms offering a 90% split can still provide very different products when payout schedules and scaling rules differ.
• Overlooking the Details of Trailing Drawdown. Whether a trailing drawdown moves during the trading day or only at day-end can significantly affect how you manage profitable positions.
• Failing to Account for Consistency Rules. A rule stating that no single day can contribute more than 30% of total profits may make a strategy built around a few large winning days unsuitable.
• Treating Marketing Material as the Actual Policy. The terms of service and official rulebook should be treated as the authoritative sources, rather than the homepage.
• Ignoring Payout Track Records. Strong trading rules do not compensate for unreliable payout practices.

Red Flags You Should Take Seriously

• Retroactive rule changes introduced suddenly in the middle of a month and applied to existing accounts.
• No willingness to provide payout evidence or any form of aggregate payout data.
• Unclear definitions of “manipulative” or “abusive” trading that could potentially be used to deny payouts.
• High-pressure sales tactics such as countdown timers, “today only” evaluation prices, or large incentives to upgrade account size.
• Heavy dependence on affiliate marketing as the main customer-acquisition channel, particularly when combined with limited transparency.

None of these factors is necessarily enough to rule out a firm on its own. But when two or three appear together, it is a strong reason to slow down, review the rulebook carefully, and consider whether a smaller, less flashy competitor may be a better fit.