I just found out that prop trading is not a scam like I thought. It is a system where companies provide large amounts of funding to traders to trade in the market, and they share the profits when successful. The full name is Proprietary trading.

In fact, how prop trading works is quite straightforward. The company offers capital to traders, and the traders use that money to trade stocks, commodities, futures, or even forex. When they make a profit, the company takes a share according to the agreement. Some companies split 50/50, while others give traders 25-30%, depending on skill.

What you need to know before entering prop trading is that you must pass a rigorous evaluation called a challenge, which requires paying an upfront fee because the company needs to be sure that the trader truly has skill and discipline.

There are two types of prop trading that differ. The first is the traditional type, where traders are regular employees, earning a salary and bonuses. The second is the online type, which is a new trend after 2020. Traders register online, go through an assessment, and then gain access to funds directly without going to an office.

The process of entering prop trading is quite clear. First, find a company that suits you—check its reputation, platform, and profit-sharing conditions. Second, verify the qualifications required by the company, such as age and experience. Third, apply online with your experience information. Fourth, if selected, there will be an interview. Finally, if successful, the company provides funding, and you can start trading.

The advantages of prop trading are many, such as having the freedom to work independently, set your own schedule, and not needing to go to an office. If you succeed in trading, you can generate continuous profits, and most of the risk is borne by the company, not you. Your only risk is the challenge fee. Good prop trading companies also have promising future plans, offer support, and have trader communities ready to help each other.

However, there are also disadvantages. You need strong discipline and mental resilience. You must control your emotions to avoid revenge trading or taking excessive risks. The challenge fee can be expensive if your income is limited, and income is not steady—there's no regular salary like an employee.

For forex prop trading, it involves trading in the currency market. Online forex prop trading has become very popular in recent years because traders can access their own funds and the market directly.

Unlike hedge funds, which are pooled investment funds collecting money from external investors, prop trading uses the company's own money. Hedge fund managers charge management and performance fees, but prop traders benefit directly from trading profits.

Anyone can become a prop trader if they have the skills and pass the evaluation. You need to fill out a form, provide background, education, and experience. An interview may be required. After that, you enter a challenge period lasting 30-60 days, where you must prove you can generate profits.

Good strategies for prop trading include several key points. First, risk management—control it well to protect your account. Second, emotional control—avoid gambling mentality. Third, stick to what you know; if your strategy works, don’t change it. Fourth, trade based on support and resistance levels, especially good for beginners. Fifth, use RSI indicators to measure the speed and change of price movements; if RSI is above 70, it may be overbought, and if below 30, it could be a good buying opportunity.

Risk management in prop trading requires constant study of the forex market, developing your effective strategies, and sticking to them. Test your strategies on a demo account before risking real money. Most importantly, never risk more than you can afford to lose.

In summary, prop trading is an attractive opportunity for skilled and disciplined traders. Do your homework, choose a reputable prop trading company that aligns with your goals. With the right mindset and strategy, becoming a successful trader can be challenging but very rewarding for those ready to take action.