Question 1

What is a Futures Prop Firm?

Accepted Answer

A Prop Firm (Proprietary Trading Firm) is a company that allows you to trade with their capital in exchange for a percentage of the profits. In the case of futures, you trade index contracts, commodities, currencies, etc. You provide the knowledge and they provide the money. If you lose, you don't lose real money (just the account), and if you win, you keep a percentage of the profits (generally between 80-90%).

Question 2

What's the difference between Challenge and Instant Funded?

Accepted Answer

The Challenge is an evaluation process where you must demonstrate your skills by reaching a profit target without violating the rules. Once approved, you pay an 'Activation Fee' to activate your funded account. Instant Funded (or Direct Pass) gives you direct access to a funded account without needing to pass an evaluation, but generally has a higher price.

Question 3

What is the Activation Fee?

Accepted Answer

The Activation Fee is the cost you pay to activate your Sim Funded account after passing the Challenge. This is a separate payment from the initial Challenge price. Some prop firms offer discounts or promotions where they reduce or eliminate this fee.

Question 4

What is Drawdown and why is it important?

Accepted Answer

Drawdown is the maximum allowed loss on your account. If your balance falls below the drawdown limit, you lose the account. It's the most important rule because it defines how much you can lose before being disqualified.

Question 5

What does TRAILING Drawdown mean?

Accepted Answer

Trailing Drawdown (or Dynamic Drawdown) moves up as your account grows. For example, if you start with $50,000 and a $2,500 drawdown, your limit is $47,500. If your balance rises to $52,000, the new limit rises to $49,500. The trailing stops when you reach a certain level (generally when you release the Buffer).

Question 6

What does EOD (End of Day) Drawdown mean?

Accepted Answer

EOD Drawdown is only calculated at the end of the trading day. This means that during the day you can have floating losses without affecting your drawdown, as long as you close positive or within the limit before market close. It's more flexible than intraday trailing.

Question 7

What does STATIC Drawdown mean?

Accepted Answer

Static Drawdown (Fixed Drawdown) doesn't move. If you start with $50,000 and a $2,500 drawdown, your limit will always be $47,500, regardless of how much your account grows. It's the most favorable type of drawdown for the trader.

Question 8

What is the Buffer?

Accepted Answer

The Buffer is an amount of profit you must generate to 'release' or 'secure' your account. Once you reach the Buffer, the trailing drawdown stops and you have more room to maneuver. For example, with a $2,500 Buffer, once you generate that profit, your drawdown stops rising.

Question 9

Do I need the Buffer to withdraw profits?

Accepted Answer

It depends on the prop firm. Some require you to first release the Buffer before you can request a withdrawal. Others allow you to withdraw from day one. Check the specific rules of each company in our Payouts section.

Question 10

What are Minimum Trading Days?

Accepted Answer

It's the minimum number of days you must trade before you can pass the challenge or request a withdrawal. For example, if there are 5 minimum days, you must trade at least 5 different days (not necessarily consecutive) before completing the evaluation.

Question 11

What is the Consistency Rule?

Accepted Answer

The consistency rule limits how much profit you can make in a single day. For example, with a 30% rule, no single day can represent more than 30% of your total profit. This prevents you from passing with a single lucky trade and encourages more stable trading.

Question 12

Can I trade during economic news?

Accepted Answer

It depends on the prop firm. Some allow trading during news without restrictions ('Allowed'), others completely prohibit it ('Prohibited'), and others have partial restrictions like not being able to open new positions minutes before/after major news ('Restricted').

Question 13

What happens if I stop trading for several days?

Accepted Answer

Many prop firms have an inactivity rule. If you don't trade for a certain number of days (generally 30-60), they may close your account. Some are more flexible than others, so check the rules for each firm.

Question 14

Can I have multiple accounts?

Accepted Answer

Most prop firms allow multiple accounts, but there are limits. You can see how many accounts each firm allows in the rules section. Having multiple accounts allows you to diversify strategies or increase your total traded capital.

Question 15

How do profit withdrawals work?

Accepted Answer

Once you generate profit in your funded account, you can request a withdrawal according to the allowed frequency (weekly, bi-weekly, monthly). The prop firm keeps a percentage (generally 10-20%) and you receive the rest. Payment methods vary: bank transfer, PayPal, crypto, etc.

Question 16

Are there minimum and maximum withdrawal limits?

Accepted Answer

Yes, each account may have different limits. The minimum is usually between $50-$500 to make processing the payment worthwhile. The maximum depends on the account size and firm policies. You can see these limits in each account's table.

Question 17

What is the Profit Split?

Accepted Answer

It's the percentage of profits you keep. An 80% profit split means that for every $100 in profit, you receive $80 and the prop firm $20. Some firms increase your split over time or based on your performance (progressive tiers).

Question 18

What platforms can I use?

Accepted Answer

The most common platforms are NinjaTrader, Tradovate, TradingView, Rithmic, and Quantower. Each prop firm has agreements with certain platforms. Some are free and others require a license. Check each firm's platforms section.

Question 19

What are Minis and Micros contracts?

Accepted Answer

These are the contract sizes you can trade. A Mini (MES, MNQ, etc.) is worth 10 times less than a standard contract. A Micro is worth 10 times less than a Mini. Smaller accounts usually limit how many Minis you can trade, but Micros are usually unlimited.

Frequently Asked Questions

Everything you need to know about futures prop firms before starting.

Basic Concepts

Drawdown Types

Buffer

Trading Rules

Accounts & Withdrawals

Platforms

New to prop firms?