What is Prop Trading?
A plain-language guide to proprietary trading, evaluations and how simulated funding actually works.
The short version
Proprietary trading — “prop trading” — means trading a firm’s capital rather than your own. In the modern retail model, a firm sets a rules-based evaluation. Traders who demonstrate discipline within those rules are given a funded account and keep the majority of the resulting profit.
Why firms run evaluations
An evaluation is a filter. Rather than reviewing a track record that may not be verifiable, the firm observes how a trader behaves under fixed risk constraints: a profit target, a daily loss limit and a maximum drawdown. Traders who respect those limits tend to keep respecting them once funded.
Simulated vs. live capital
At GrowthFunded all accounts — evaluation and funded alike — operate in a simulated environment on live market data. No client order reaches a live exchange. Rewards are paid from company revenue based on your simulated performance, which is why we describe them as performance rewards rather than trading profits.
What the rules actually mean
- Profit target — the gain required to progress a phase.
- Daily drawdown — the most your equity may fall in a single day.
- Maximum drawdown — the absolute floor for the account, measured from the initial balance.
- Profit split — your share of simulated profit once funded, up to 100% on Bolt.
Is it right for you?
Prop trading suits traders who already have a tested process but not the capital to size it meaningfully. It is a poor fit for anyone still searching for a strategy — the evaluation fee is a service fee, not an investment, and it is not returned if the account breaches a rule.
Choosing a firm
Look for published rules, a static rather than trailing drawdown, no consistency score, and a documented payout record. Every one of those is available on this site before you spend anything.