Online prop firms are a great way for traders to scale their capitaland increase their profits in the markets without needing to find investors orcompound their accounts for many years.
However, prop firms can be expensive, and not everyone can afford them;furthermore, some traders want to take more than one trading challenge toobtain funding, which can get very pricey! This begs the question, what is thecheapest prop firm?
The cheapest prop firm isThe5ers, 2 step $5000 account, which costs traders just $39, making it thecheapest funding option on the market.
In this article, we’ll explore the 5 cheapest forex prop firms, thecheapest stock prop firm, and the fees you’ll be paying your prop firm. So,let’s get into it!
Even consistently profitable traders may need one or two extra propfirm challenges to get funded as the market conditions may not be great fortheir trading strategies at the time of their challenge.
Therefore, ensuring you’re working with a cost-effective prop firm willsave you a lot of money and headaches and hopefully allow you to take multiplechallenges if needed, in order to obtain the funding you’re looking for!
The Top 5 Cheapest Forex PropFirm
We will keep this constantly updated to reflect pricing within themarket, but currently, these are the top 5 cheapest prop firms for forextraders:
1. The5ers - $39
The5ersoffers the cheapest prop firm challenge in the industry, with $5000of trading capital for just $39. This is the 2-step. The5ers know for theirhigh reputation and their great trading condition.
2. MyForexFunds - $49
MyForexFunds offers the next cheapest prop firm challenge, coming in atjust $49 for $5,000 in trading capital. This is a 2 step challenge account.
3. TheFundedTrader - $65
TheFundedTrader offers a very similar $5,000 funding trading accountfor just $65. This, again, is a 2 step challenge model account.
4. MyForexFunds - $84
MyForexFunds are back on the list with a $10,000 account for just $84.This is the same account model as their $5,000 account at second place but withtwice the trading capital!
5. Finotive - $75
Finotive offers a very similar $5,000 funding trading account for just$75. This, again, is a 2-step challenge model account.
The Cheapest Stock Prop Firm
If you prefer trading the stock market, there are few stock prop firmsthat offer funds, especially for stock traders.
1. Trade The Pool - $97
TradeThe Pool is currently the cheapest and best stock prop firm on themarket, coming in at just $97 for $20,000 of buying power and great tradingconditions. You can trade more than 12,000 stocks and ETFs and even short anypenny stock.
The Types of Fees You Pay toProp Firms
There are more ways online prop firms charge traders for their serviceand capital. These include:
2. Trading Challenge Fees
All online prop firms charge traders a fee to take a trading challengeto prove they can consistently and profitably trade the markets. If they’resuccessful, the trader will be allocated an amount of capital to trade with!
3. Performance Fees/ProfitSplits
The large majority of online prop firms will offer traders a profitsplit. The amount of profit split greatly depends on the prop firm you’reworking with, but it typically ranges from 50%-90%. For example, if you wereworking with a prop firm on a 90% split and made a $10,000 profit that month,you’d keep $9000, and the prop firm will take $1000.
4. Trading Conditions (Spreads,Commissions, and Slippage)
Prop firms will charge you a spread and/or commissions for your tradeswithin the market, exactly as a forex broker would. This is a completelystandard within the industry, and it’s usually a negligible amount incomparison to your trading profits unless you’re a high-frequencytrader/scalper.
5. Monthly Account Fees
Some prop firms charge a monthly fee to keep your funded tradingaccount. We’ve seen this model slowly dying out over the last 6-12 months butlooking back 2-3 years; this was the most popular model!
Comparing Costs & Benefits
Now we have identified the 5 cheapest forex prop firms, let’s take adeeper look at their offerings to guide your decision as to which firm may beright for you!
Tips for Choosing the Right PropFirm
Just because a funded trading account might seem great or a prop firmis really affordable - this doesn’t mean they’re the right prop firm for you!
There are several factors you should consider when choosing the rightprop firm to be working with. These factors include:
1. The Reputation
With prop firms popping up every day, it’s crucial to work with a propfirm with a long-term, established reputation in the industry. The better thereputation, the less likely the prop firm will go bust overnight, leaving youhigh and dry with no funding!
For reference, The5%ers has over 1300 reviews on Trustpilot, rated4.8/5!
2. Affordability
Affordability and pricing play a big factor. If you’re coming into themarkets with just $500, you don’t want to work with a prop firm that charges$500 for a challenge account. Working with a much more affordable option wouldbe more suitable because if you fail the challenge, you'll want to have theopportunity for a second chance.
3. Support For Traders
It’s important to consider what kind of support traders are offered bya prop firm. Are they offering mentorship, training material, useful insights,and fast customer support, or are they just leaving traders to fend forthemselves using a cheap outsourced live chat feature?
Believe us, once you’re funded, this will be a big factor for you!
4. Alignment With Your TradingStrategies
The prop firm must align with your trading strategies. For example,some prop firms do not allow traders to hold trades over the weekend. If you’rea swing or position trader, you will not be able to trade your strategies withthat firm effectively.
There are prop firms catered to every trading style, so you need tofind the one that best suits your trading style!
5. Capital Scaling Opportunities
It’s important to think long-term. Does the prop firm you’reconsidering allow traders multiple trading accounts? Are there opportunities tocompound your trading account? Is there a way you can grow your capital (scalingplan) under management without the need to work with an additional prop firm?
These are incredibly important factors to consider!
In Conclusion - What Is theCheapest Prop Firm?
In summary, the cheapest prop firm offering is The5ers $5000 account atjust $39. Putting pricing aside, it’s important for traders to look at otheraspects of the prop firm they’re looking to work with, to establish whetherthey’re the right fit for them!
