Prop firm trading is becoming ever more popular in the online trading community and with this comes even greater opportunities for traders to skyrocket their trading careers.One way in which traders can benefit through working with prop trading firms is through salaries which are now being offered by some firms. This means traders can receive a guaranteed monthly income whilst trading their funded accounts. Here are a couple of prop firms that offer salaries.
The only prop firms offering salaries to traders are The5ers and Funded Engineer.
In this article, we’ll look at these prop firms offering salaries to traders, the pros, cons and everything you need to know.
What Is A Prop Firm?
A prop firm is a financial institution that allows traders to trade using the firm’s own capital rather than personal funds. These firms employ traders to buy and sell financial instruments with the goal of generating profits. Prop firms provide traders with access to capital, advanced trading technology, and sometimes training and mentorship, allowing individuals to trade and potentially earn a share of the profits they generate. Prop firms typically take a portion of the trader’s profits as compensation for providing resources and support, which can vary depending on the specific arrangement.
Which Prop Firms Offer Salaries To Traders?
Some prop firms go a step further and offer salaries to traders, alongside the trading capital. This provides traders with the assurance needed when scaling their income and trading business.
The5ers
The5ers is one of the most established online prop firms in the industry. Founded in 2016, The5ers offer a range of funded trading accounts with real trading capital and also competitive salaries for traders.
Once traders reach $350,000 in trading capital through the scaling program, they’re entitled to a salary of $4,000 per month. This scales as the capital continues to scale.
Funded Engineer
Funded Engineer is another new prop firm offering traders simulated funded accounts, alongside a salary of up to $1,000 per month after 6 months of profitable trading.
This is much lower than The5ers are offering traders but should not be ignored. Any salaries being offered by prop firms are worth considering.
What Criteria Does A Trader Need To Receive A Salary?
Typically speaking, not every trader will be offered a salary by a prop firm – it’s usually only traders with a high volume of trading capital under management.
Therefore, you must scale your funded trading account before requesting a salary from your prop firm.
For example, The5ers offer a salary to traders once they are managing over $350,000 in trading capital for the firm.
Traders managing less capital will be eligible for their profit splits but no salary.
The Benefits Of Salary with A Prop Firm
There are a number of benefits of taking a salary from a prop firm, rather than just a profit split. The most notable benefit is the fact that you have a guaranteed paycheck coming in for the month, regardless of trading performance.
This is hugely beneficial for traders in the respect that you can take complete pressure off your trading performance. Typically, a lack of pressure will lead to better trading performance and enhanced results – leading to larger profit splits per payout.
Taking a salary from a prop firm also allows traders to transition into becoming full-time traders without being dependent purely on results – which is great
There are no drawbacks to this approach if the prop firm is offering both payouts and salary on top!
What Else Is Important To Check Before Choosing A Prop Firm?
A prop firm offering a salary is not enough to start trading with that company – you need to conduct your own due diligence to ensure you’re working with a credible prop firm.
Some of the aspects you need to consider are:
Reputation
You want to be working with a prop firm that has a good reputation. If the firm has a negative reputation for manipulating prices or not paying traders, there is a good chance that the same will be done to you.
Use third-party websites like Trustpilot to validate the views of other traders and make a decision as to whether or not they’re a reputable prop firm.
Costs
Be very aware of the costs of the prop firm you’re looking to work with. Some prop firms charge a huge amount of money for challenges which are much cheaper elsewhere.
You also should ensure that the costs fit into your budget. Be aware that you may fail multiple challenges.
Years In The Industry
As with any industry, working with prop firms that have more years of exposure in the industry is always a good idea. Typically, prop firms will go out of business in their first first years if they are going to, so long-standing prop firms clearly have a good operational model.
Scaling Plan
If a prop firm offers no way for traders to scale their capital, there is little point working with them as you’ll never be able to increase your profits per month unless you increase your risk – which isn’t possible!
The Proper Way To Trade With Prop Firms
Prop firm trading is simple in principle but it’s not easy. This is due to the risk management constraints put onto traders by prop firms, to keep all parties safe.
Therefore, there is a proper way to trade with prop firms! Here are some tips:
Risk Management
Risk management is very important when trading with prop firms due to the strict daily drawdown limit and maximum drawdown limit. It’s very possible to stay within these limits and keep hold of your funded trading account for many years – but it needs to be at the forefront of your mind.
Trading Plan
It’s recommended to have a robust trading plan to be trading with. This allows traders to have a clear mind and execute the trading plan with no bias or emotion.
Objective Strategy
If you can make your strategy as rule-based as possible, you’ll have more success in the markets as you can test, refine and trade with confidence. Traders with subjective strategies usually cannot be sure as to whether their strategy is actually profitable or not over the long term.
For more information, check out our article 5 Best Strategies for Prop Firm Trading
In Summary – Which Prop Firms Offer Salaries To Traders?
In conclusion, The5ers and Funded Engineer offer salaries to prop firm traders, depending on the amount of capital they are trading.
This is hugely beneficial for traders and should certainly be considered when choosing which prop firm to work with.
