Everything you need to know before choosing a prop firm. Drawdown types explained, payout policies decoded, red flags to avoid, and which firms are actually paying traders.
The prop trading industry has undergone a significant transformation. What many are calling the "Prop Firm Winter" of late 2025 saw several firms close their doors, leaving traders with unpaid balances and broken promises. But from this consolidation, a clearer picture has emerged of which firms are built to last.
This guide exists for one reason: to help you avoid losing money. Not just on failed evaluations, but on firms that won't pay you when you succeed. We've analyzed over 50 prop firms, verified payout proofs, and compiled everything you need to make an informed decision.
Before diving into specific firms, you need to understand the technical aspects that separate good firms from bad ones. That starts with understanding drawdown types, payout policies, and the technology stack each firm uses.
Drawdown is the maximum amount you can lose before your account is terminated. Understanding the different types is critical because it directly impacts your trading strategy.
Your loss limit "trails" up as your account grows, but never goes down.
Your loss limit is fixed from the start and never changes.
Common at: Take Profit Trader, Elite Trader (Static plan)
Real-Time Drawdown
Calculated tick-by-tick. If you hit the limit intraday, even for a second, you're out. More strict.
End-of-Day (EOD) Drawdown
Only calculated at market close. You can dip below intraday and recover. More forgiving.
Pro tip: If you're a scalper or day trader, trailing drawdown with real-time calculation can be dangerous. Consider firms with EOD drawdown or static drawdown for more breathing room. For a detailed comparison, see our Best Futures Prop Firms ranking.
A firm can have the best rules in the world, but if they don't pay, it's worthless. Here's what to look for in payout policies:
Many firms require you to maintain a "buffer" (e.g., $100-$500 above your drawdown limit) before requesting a payout. This protects both you and the firm from immediate violations after withdrawal.
Some firms require that no single day accounts for more than 30-40% of your total profit. This can penalize traders who have one exceptional day. Check if your target firm has this rule.
Daily payouts (rare), weekly, bi-weekly, or monthly. Faster isn't always better—some firms offering "instant" payouts have other restrictions. Check our payout speed analysis.
The platform you trade on affects execution speed, data quality, and your overall experience. Here's what you need to know about the major platforms:
| Platform | Best For | Considerations |
|---|---|---|
| Rithmic | Professional traders, scalpers | Best data quality, $25-50/mo fee |
| Tradovate | Beginners, mobile trading | Free, simple, some limitations |
| NinjaTrader | Advanced charting, automation | Powerful but learning curve |
| DXTrade / cTrader | Forex traders | Web-based, common for forex firms |
This is a brief overview only. For complete details on pricing, rules, and our full analysis, click through to each firm's dedicated review page.
In brief: The most popular futures prop firm with over $600M+ paid to traders. Known for flexible trailing drawdown and one-day evaluation passes.
What sets them apart:
Point of vigilance:
In brief: The original futures prop firm, operating since 2012. Known for Express Funded option and established reputation.
What sets them apart:
Point of vigilance:
In brief: Static drawdown and day-one payouts make this the go-to for traders who hold positions overnight or swing trade.
What sets them apart:
Point of vigilance:
In brief: A leading Forex prop firm with potential 100% profit split and impressive scaling program up to $4 million.
What sets them apart:
Point of vigilance:
In brief: Known for lightning-fast payouts (24-48 hours, some in 10 minutes) and instant funding options. 90% profit split on all accounts.
What sets them apart:
Point of vigilance:
Want to compare these firms side-by-side? Use our comparison tool or check our Best Futures Prop Firms ranking.
Not all prop firms are created equal. Some are designed to take your evaluation fee and never pay you out. Here are the red flags to watch for and a due diligence checklist to protect yourself.
For our investigation on recent prop firm controversies, read our MyForexFunds Shutdown Case Study and Prop Firm Payout Denials investigation.
Yes, prop trading is completely legal in the United States. Proprietary trading firms provide traders with capital to trade, and traders receive a share of the profits. This is a legitimate business model that has existed for decades. You are trading the firm's capital, not customer funds, so no special licenses are required.
No, you do not need any license to trade with most prop firms because you are trading the firm's capital, not client funds. This is different from being a registered investment advisor or broker. However, some firms may require you to pass their evaluation process before receiving funded capital.
In most countries, prop firm payouts are taxed as self-employment income or independent contractor income. In the US, you'll typically receive a 1099 form if you earn over $600. You should consult with a tax professional in your jurisdiction for specific advice, as tax treatment varies by country.
It depends on the firm. Some firms like Apex allow news trading, while others restrict it or require you to close positions before major announcements. Always check the specific rules in the firm's terms of service. See our comparison tool to filter by news trading policy.
If you violate the rules or hit your maximum drawdown, you typically need to purchase a new evaluation. Some firms offer discounted "resets" (usually $25-$100) that let you restart without buying a full new evaluation. Check if your firm offers reset options before purchasing.
Most futures prop firms allow Expert Advisors (EAs) and trading bots. However, some firms restrict high-frequency trading (HFT), copy trading, or using the same strategy across multiple accounts. Always verify EA policies in the terms of service before purchasing an evaluation.
Evaluations range from as low as $15 (Maven Trading) to $500+ for larger accounts. Most traders start with accounts in the $50-$150 range. We recommend starting with a smaller account to learn the rules before scaling up. Check our Cheapest Prop Firms ranking for budget-friendly options.
Choosing a prop firm is a significant decision that can shape your trading career. The key criteria to remember are: trust and payout reliability (does the firm actually pay?), rule fairness (trailing vs static drawdown), and technology (platform quality and data feeds).
Don't be swayed by flashy discounts alone. A 90% OFF deal is worthless if the firm doesn't pay traders. Do your due diligence, start with a smaller account, and scale up once you've verified the firm pays reliably.
Written by DealPropFirm Research Team
15+ years combined trading experience. €200K+ invested in prop firm testing. We test every firm we recommend with real money.
Last updated: January 8, 2026 |See our ranking methodology