Question 1

What is a prop firm in simple terms?

Accepted Answer

A proprietary trading firm, or prop firm, lets a trader trade on the firm's account instead of risking only their own savings. Most retail prop firms run a paid evaluation first, then give access to a larger funded account if the trader proves they can follow the rules.

Question 2

How does the evaluation-to-funded model work?

Accepted Answer

You pay a fee and trade a test account, trying to reach a profit target without breaking the loss rules. If you pass, you move to a funded account that still belongs to the firm. From there you keep a share of any profits under a profit split, and the firm keeps the rest.

Question 3

Is a prop firm the same as a normal brokerage?

Accepted Answer

No. A brokerage holds your own money and you keep all of your gains and losses. A prop firm owns the account, sets the rules, takes a cut of profits through a profit split, and can revoke access if you break a rule.