I just came across an interesting topic about prop trading, which is a trading system gaining attention from new traders, so I want to share my understanding of this.

Prop trading is actually trading using funds from a company instead of your own money. Proprietary trading firms provide money to traders to trade in various markets such as stocks, commodities, futures, or even forex. The basic understanding is that the company believes you have the skills, so they give you money to trade, and when you make a profit, the company takes a share. This share depends on the contract; some companies split 50/50, while others give 25-30% to the trader.

What’s interesting is that prop trading is a system that doesn’t use demo accounts but rather "hiring" traders to do real work. However, participation involves costs; some companies charge fees for utilities, software, and other expenses.

In forex, there are two models: the traditional one where traders are hired as employees with salaries and bonuses, and the online model where traders apply online, pay a small fee, and pass an evaluation before accessing funds. The online approach has become more popular in recent years, especially after 2020.

The process of applying for prop trading is quite straightforward. First, find a company that suits you—consider reputation, platform, and profit-sharing terms. Second, check qualifications such as age and experience. Third, apply online and provide information about your experience. Fourth, there may be an interview. Finally, if approved, the company will fund you, and you can start trading.

The advantages of this system are quite clear: you have the freedom to choose your own schedule, no need to go to an office, potential for continuous profits if successful, lower risk because the company bears most of it, and access to large capital without personal investment.

However, there are downsides: high discipline is required, trading psychology is very important, emotional control is necessary, and income can be irregular. There’s no fixed salary, sick leave, or social security like regular employees.

The difference between hedge funds and prop trading is that hedge funds pool money from external investors, while prop trading uses the company's own funds. Hedge funds charge management and performance fees, whereas prop traders benefit directly from trading profits.

Who can become a prop trader? In principle, anyone who passes the evaluation. You need to apply for a program, fill out a form with basic information, and possibly have an interview to discuss your skills, experience, and strategies. After approval, you enter an evaluation period, usually 30-60 days, during which you must demonstrate your ability to generate profits and follow company rules.

For good strategies, focus on risk management, emotional control, sticking to what you know, trading at support and resistance levels, and using indicators like RSI to help make decisions.

Risk management is of utmost importance. You should continuously learn about the forex market, develop your own strategies, stick to them, test them in demo accounts first, and most importantly, never risk more than you can afford to lose.

In summary, prop trading is a channel that offers traders access to large capital and can potentially change their lives. But it requires hard work, dedication, and high-level risk management skills. It’s crucial to choose a reputable company that aligns with your goals. With the right mindset and strategy, this experience can be a very worthwhile investment.