The Ultimate Guide to Prop Firm Trading for Filipino Forex Traders
Prop firm trading is making waves among Filipino forex traders because it offers a unique opportunity. Simply put, you trade using a prop firm company’s capital, and you keep a portion of the profits.
If you’ve been wondering “Ano nga ba ang prop firm trading?” then you’ve found the right prop firm trading guide for Filipino forex traders like you!
In this guide, we’ll explore how prop firm trading works, how you can pass the evaluation phase, and which firms are best for Filipino forex traders.
Whether you’re a newbie or a seasoned forex trader, you’ll find helpful tips and strategies to get started.
Let’s explore how you can take advantage of the opportunities in prop firm trading and start your journey toward trading success.
What is a Prop Firm?
A proprietary trading firm (or prop firm) is a company that provides traders with capital to trade financial instruments such as stocks, forex, and commodities.
“A prop firm is a company that provides its traders with access to capital, in return for a percentage of the profits generated. There are a number of ways that a prop firm can help you become a better trader. One of the most important things that a prop firm can do is provide you with access to capital.”
-Angelo Ciaramello, Prop Firm Founder
Prop firms offer a unique opportunity for traders to access trading capital, receive training in forex trading, and earn profits.
As a result, prop firm companies offer attractive options for many traders looking to enhance their trading careers.
Here’s a closer look at the key features of prop firms:
- Capital Provision
Prop firms give traders access to significant capital.
This allows prop firm traders to virtually trade without risking their own money.
This is especially beneficial for skilled traders who may not have substantial funds to trade with.
- Profit Sharing
In return for the capital they provided, prop firms typically take a percentage of the profits generated by the traders.
Profit splits can vary, often ranging from 50% to 80% in favor of the trader.
- Forex Trading Training and Support
Many prop firms offer educational resources, mentorship programs, and trading tools to help traders improve their skills.
This support can be invaluable for both novice and experienced traders.
You can also look into their customer service, case studies, and discounts as critical aspects of the prop firm company’s support system.
- Flexible Trading Strategies
Prop firms often allow traders to use a variety of trading strategies like intra-day trading, swing trading, or even scalping.
Such flexibility enables traders to choose the approach that suits their style and risk tolerance.
However, you need to check with the prop firm’s terms and conditions for more specific guidelines.
Take a look if they allow the use of expert advisors, weekend holding of trades, and news trading.
- Prop Firm Evaluation Process
Most prop firms require traders to go through an evaluation process which is often divided into phases.
Traders must trade a virtual demo account to demonstrate their trading skills before being funded.
The evaluation process ensures that the firm invests in capable traders and not gamblers.
- Rules for Risk Management
Prop firms have strict risk management rules to protect their capital.
Some traders detest these ideas because they appear restrictive.
But truth be told, it’s actually beneficial for the prop firm trader. For one, this makes the trader more disciplined. On the other hand, this helps prop firm companies remain operational.
That's why traders must adhere to risk management guidelines.
For instance, traders must take note of certain daily and overall drawdowns and other risky activities.
What is Prop Firm Trading?
Prop firm trading, short for proprietary trading, allows traders to trade using the capital of a prop firm company.
If you succeed in the prop firm’s evaluation, the prop firm shares a portion of the profits with you, typically anywhere between 50% and 90%.
This setup is perfect for Filipino forex traders who have the trading skills but may lack the large capital needed for traditional forex trading.
As a quick overview, prop firm trading essentially works this way:
Any prop firm challenge will test your trading skills.
The question is—madali ba?
The truth is that it really depends on your overall ability.
You will need more than just your trading skills to go through the entire process of prop firm trading.
But once you pass, you’ll get access to significant capital without risking your own money.
The catch? Prop firms want to see consistency and risk management.
If you can demonstrate these skills, you’re golden.
Many Filipino traders have turned to prop firms because they offer a win-win situation.
Traders can purchase at a lesser price a virtual trading account with huge capital. If they succeed, they can earn a funded account and earn from it.
What are the Types of Prop Firm Trading?
What Does the Prop Firm Trading Process Look Like?
Prop firm trading might seem intimidating at first. However, the process is straightforward once you understand it.
That’s why forex traders all over the world find prop firm trading appealing. There’s less financial risk and bigger earnings potential.
Here's a quick step-by-step guide on how you can get started as a Filipino trader:
1. Choose a Trusted Prop Firm
There are plenty of options available online, including popular prop firm companies like FTMO, The 5%ers, and Alpha Capital.
Most established prop firms allow Filipino traders to join a prop firm challenge, trade the forex market from anywhere in the world (except for some countries), and possibly earn by trading.
Remember always do your own research. Siguraduhin mo lang na kilala at legit ang pipiliin mo.
You may look at the company’s website, social media page, Discord communities, and even check Trust Pilot reviews.
2. Purchase and Pass the Prop Firm Evaluation
Firstly, you purchase a prop firm challenge from the company’s website.
You may choose from different account sizes that range from $1,000.00 to $200,000.00.
Most prop firms allow the use of credit cards, debit cards, and even Bitcoin wallets to buy a prop firm challenge.
Then comes the evaluation phase. This is the hardest part for many traders.
You’ll be given a demo or virtual account with a certain amount of capital. Furthermore, you must meet the firm’s profit targets without exceeding the loss limits or breaching any of the mentioned rules in the challenge’s terms and conditions.
Prop firms want to see that you can be consistent. Dito papasok ang tiyaga at disiplina—it’s all about sticking to your working strategy.
3. Get Funded and Trade Well
Once you pass the evaluation, congratulations!
After successfully passing the evaluation, you’ll gain access to the prop firm’s trading capital which typically ranges from $10,000.00 to $200,000.00
You’ll use this capital to trade in real and live markets. Moreover, you must adhere to the prop firm’s risk management rules, such as maintaining specific drawdown limits and position sizes.
4. Split Profits with the Prop Firm and Get Paid
When you make a profit and don’t violate any trading rules, it’s time to reap your rewards.
Most firms offer a profit split between 50% and 90%. This means you can keep up to 90% of what you earn. Di ba ang saya?
You have more trading capital. Thus, more room for potential earnings! More importantly, if you take good care of your account, you can continue this cycle.
What are the Advantages of Prop Firm Trading for Filipino Forex Traders?
Many Filipinos enter forex trading hoping for financial freedom. Unfortunately, the big hurdle has mostly been the source of trading capital.
Thankfully, prop firm trading is here. It provides an excellent solution for trading success by offering you access to large sums of trading capital without risking your personal savings.
Here are some key advantages of prop firm trading for Filipino forex traders:
- Less Financial Risk
Since you’re using the firm’s capital, your personal funds are not on the line.
You only need to pay an evaluation fee to get started. Iwas sakit ng ulo, hindi ba?
- No Need for Large Starting Capital
Let’s face it—traditional forex trading requires a large initial deposit. That can be challenging for many Filipinos!
With prop firm trading, you can start with as little as a few hundred dollars and still trade with significant amounts.
- Higher Earning Potential
With more capital and leverage to trade, you can potentially earn more, especially with prop firms that offer profit splits of up to 90%.
Moreover, most prop firms allow better trading leverage. This gives you more flexibility in placing significant positions when trading.
- Opportunity to Grow Trading Skills
Because prop firms evaluate traders based on their skills and risk management, you’ll be forced to refine your strategies. Not to forget, you have to follow specific trading rules.
This leads to long-term growth and success as a forex trader.
Is Prop Firm Trading Legal?
This is one of the most frequently asked questions about prop firm trading.
For many Filipino forex traders, prop firm trading sounds too good to be true.
With the existing laws governing businesses in the country, you’ll find that trading in a prop firm won’t land you in prison. A general rule of thumb though is to consult tax experts. This way, you won’t have any trouble declaring and paying your taxes.
Moreover, prop firm trading is generally legal in most countries. There might be, however, specific regulations or licensing requirements that vary depending on the jurisdiction.
It's always essential to check the laws and regulations in your specific country or region to ensure compliance in prop firm trading.
How to Pass Prop Firm Evaluation?
Passing a prop firm’s evaluation phase or challenge is a pre-requisite if you want to get funded by the company. Moreover, prop firm challenges are designed to test your trading skills and psychology.
However, many prop firm traders fail on their first try. More traders fail even more quickly on the second phase of two-tiered prop firm challenges as shown in many prop firm reports.
And there are even fewer traders who manage to keep their live and funded accounts.
There are several reasons why traders fail in prop firm evaluations.
But, with the right mindset and strategy, you can improve your chances of succeeding in any prop firm challenge.
Here are some essential tips to help Filipino traders pass the prop firm evaluation:
- Stick to Your Trading Plan
Firstly, write your trading plan. Scribble it on a piece of paper or type it on any document processor. This way, you have a concrete plan that can serve as your reminder.
In terms of trading, it’s tempting to go immediately for big wins so you can reach the target profits. You might even be lucky with your trades sometimes.
But relying on luck in prop firm trading won’t keep you in the long run.
Most prop firms have strict rules that would compel traders to be more disciplined and cautious in trading.
Thus, preparing and sticking to a working strategy is the best way to go.
- Read and Understand the Prop Firm’s Rules
Believe it or not—many people go into prop firm trading without reading the rules.
Some traders think prop firm trading is like having a personal trading account.
As a result, they feel confused or surprised the moment they receive an email notifying them that they have breached the prop firm challenge.
The most common rules traders have to be mindful of include profit target, maximum loss allowed (daily and overall), and required number of trading days.
- Manage Your Risk-Reward
- Focus on Consistency, Not Profits
What Factors Make a Good Prop Firm?
What are the Recommended Prop Firms?
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