A Guide To Becoming A Proprietary Trader

Proprietary Trader

Prop trading or proprietary trading as it is formally known is a booming profession for those individuals looking to profit from the financial markets.

For anyone wanting to become a proprietary trader, the process is actually rather straightforward.

What was once thought of as a highly technical profession, can now be done with just a simple understanding of the trading process.

What Exactly Is A Proprietary Trader?

Proprietary traders work with the capital of the company to make trades that involve certain assets, such as commodities, currencies, stocks, and futures.

It also includes trades that are more complex, such as derivatives of the aforementioned assets. Proprietary traders can either work online for a broker or for a financial firm, such as SurgeTrader – read an honest surgetrader review here.

One thing to think about regarding proprietary trading is that it uses the money of the company rather than client funds.

In certain situations, a proprietary trader gives a specific part of their own capital in order to ensure that they are acting in the very best interest of the company, thus preventing excessively risky trades from being made.

What Do Proprietary Traders Do?

Proprietary traders make financial trades for a company with the capital that is provided to them. Trades are made using various strategies via platforms online that are provided to them by the company.

Prop traders typically work when they want and can even make the choice of what asset class to trade. No minimum limit exists on how many hours a trader has to work, which is one of the reasons why the profession is so appealing to many people.

The profits that a proprietary trader makes are split between themselves and the company they are working for.

The way in which this is split is dependent on the level of capital that is provided in the first place. Bonuses and other similar incentives make up a big proportion of the earnings that a proprietary trader makes.

Proprietary traders use a bunch of technical indicators that their companies provide. It is necessary for traders to make use of a stop loss in order to avoid losing all of their capital on just one single trade.

Each and every proprietary trader has their own special way of making trades, which a company will take advantage of.

Becoming A Proprietary Trader

becoming Proprietary Trader

The journey to becoming a proprietary trader is made much simpler by understanding what proprietary trading is and what it is that proprietary traders do.

Even those people who do not know this and only possess a limited amount of financial knowledge are capable of learning what it takes in order to begin trading successfully.

  • Learn how to trade
  • Get to know the rule (and follow them)
  • Adopt a trading strategy
  • Manage your money and risk profile
  • Do some practice with paper trading
  • Join a proprietary trading scheme
  • Find some funding

Now that you know what it takes to become a proprietary trader, you can go out and begin to make some money.


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