Imagine this: You’re good at video games, but don’t own a console. A rich friend sees your skills and says, “Here’s my PlayStation. If you win tournaments, we both get paid.”
That’s basically what is prop trading.
Prop Trading = Trading With Someone Else’s Money
In prop trading (short for proprietary trading), a company gives you money to trade — usually $25,000 to $200,000 or more — and you try to make profits.
You don’t risk your own cash. Instead, you prove you’re a good trader, and if you succeed, they give you a slice of the profits. You win, they win. Simple.
Why Do Prop Firms Give Away Money?
Because they’re smart. Prop firms make money in two main ways:
- They keep a share of your profits (usually 10%-20%)
- They charge you to prove your skills through something called a Challenge (more on that in another post)
They’re not just handing out cash to random traders. You have to prove you’re not reckless — and that’s how they protect themselves.
Real-Life Example for What Is Prop Trading
Let’s say you join a prop firm. They offer you a $50,000 account if you pass their test.
- You pay $139 for the test (aka Challenge)
- You prove you can grow the account 10% without breaking rules
- You pass — now you’re funded
- In your first month, you make $3,000
- The firm gives you $2,400 (80%), and they keep $600
Still think it sounds too good to be true? It’s real — thousands of people are doing it in 2025.
Who Is Prop Trading For?
- Aspiring day traders
- Swing traders
- People with skills but not a lot of capital
- Traders who want to grow fast without risking their savings
You don’t need a finance degree. You just need:
- Discipline
- Risk management
- Consistency
Start with a free demo account first. Almost every prop firm offers one. Practice until you feel confident.
🔐What’s The Catch?
There’s no real catch — but there are rules:
- You must hit specific profit targets
- You can’t lose more than a set amount per day
- You often can’t trade news events or weekends
These rules exist to prove you can trade like a pro, not like a gambler.
If you break the rules, you fail the challenge and have to pay again. Read the fine print!
Why Prop Trading Is So Popular in 2025
- Low entry cost (from $89)
- Potential to scale fast
- You learn risk control
- More freedom than trading your own $500 account
With dozens of firms to choose from, it’s easier than ever to get started.
TL;DR – Prop Trading Simplified
- Trade with a company’s money, not yours
- Prove you can manage risk & earn profits
- Get funded and earn monthly payouts
- Follow the rules, and you keep up to 90% of profits
💡 Funded Account Profit Calculator
Curious how much money you can make with a prop firm account? Use our Funded Account Calculator to instantly estimate your potential monthly earnings based on your account size and profit split. Whether you’re trading with $25,000 or $200,000, this tool helps you visualize your payouts — before you even start trading!
Start planning your funded journey and see how much you could earn today.
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📅 Stay Tuned: New Blog Series Every Week!
Love what you just read? This is just the beginning. Every week, we’ll release a new blog post covering everything you need to know about what is prop trading — from challenges and rules to payout tips and firm reviews.
Make sure to bookmark betonshares.com and follow us on social to stay ahead in your trading journey!
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