Prop trading has increased in popularity in recent years, primarily due to there being more and more propriety trading firms entering the market. Before the boom in online trading, aspirin prop traders would need to spend years studying before applying to work at a prop shop. Nowadays, anyone with an internet connection can signup with a prop firm to take part in trading challenge to try and qualify for a funded account, all from the comfort of their own home.
If you have made it to this article, then you probably already have a good idea of what prop trading involves. Prop trading is when you trade the capital of a prop trading firm and get a share of any profits in return. Of course, prop firms cannot just give out funded accounts to everyone as that would be extremely risky.
This is why you will usually need to pass a prop challenge to prove you are a consistent trader with sensible money management before you can get a funded account. This evaluation phase is going to have a set of rules that you need to follow and objectives that you need to achieve. This can be profit targets, maximal loss, maximum drawdown and trading days.
If you are based in the United Kingdom and thinking about starting a career as a prop trader, then you might want to opt for a UK prop trading firm. That being said, we have compiled a list of possible options here for you to consider. We have taken into consideration reputation, trading conditions and upfront costs.
You might wish to begin your trading career in proprietary trading if you are a recent graduate from college or a novice trader who cannot afford to invest the large sums of money needed to start trading the financial markets.
Proprietary trading is a highly sought-after career for both novice and experienced traders due to the low starting capital requirements as well as additional benefits like receiving professional training from seasoned traders while on the job, not being held liable for trading losses, and receiving a share of any profits made.
The perfect prop trading candidate doesn’t fit any predetermined criteria. All you actually need is the drive, passion, and ambition that demonstrates you want to be successful in your trading career. Of course, it can certainly help if you already have experience trading the financial markets.
If you do not have any prior trading experience, you will need to go through a prolonged learning process and might find it difficult to pass any prop firm challenge due to the strict rules and profit targets that they have. However, there are prop trading firms that are happy to guide you along your path to becoming a successful trader as you will be an asset to them in the long term.
Anyone who has access to the internet and enough upfront capital to take part in a trading challenge can prove they have what it takes to get a funded trading account. In fact, some of the cheapest prop firms let you start with as little as $50. You can even get your initial evaluation fee refunded if you manage to pass the challenge with flying colours.
Although the majority of prop traders who secure entry-level positions are recent graduates with little to no full-time work experience, this shouldn’t deter applicants who do have work experience and are seeking a change.
Candidates who hold one of the desired degrees or who have completed internships in trading, asset management, or any other field related to public markets have the necessary level of academic preparation.
Entry-level prop traders don’t need to have any prior work experience or educational background; they only need to be able to think quickly under pressure, maintain composure, have a thick skin, and be quick to admit their errors and correct them.
However, it is unlikely that those who have trouble handling stress or often get overwhelmed by expectations and deadlines will be successful traders.
The current national average salary for a proprietary trader is £36,204 in the United Kingdom. Salary estimates are based on 16 salaries submitted anonymously by proprietary trader employees. Most of you will have very different expectations if you are using an online prop trading firm that does not employ you. They simply provide a funded account service with specific terms that you need to follow.
Many factors will determine how much you can earn as a prop trading in the UK, ranging from your trading skills to the profit share that the prop firm offers. The industry average profit split is around 80-90%. Some prop firms will offer less but compensate for this by providing a wider range of services such as educational resources and one to one mentorship.
Unlike some investment banks or hedge fund groups, prop trading firms in the UK do not need to be regulated and are not banned. Having said that, if your chosen organisation uses a partner broker, you should check their regulatory status before signing up. Using a regulated trading broker can give you peace of mind that the funds will be safe and they will operate in an honest manner so that you can focus on your trading strategies.
There is no reason why you cannot begin your trading career as long as you have the necessary training, experience, and personal attributes. There are plenty of prop firms in the UK that will be happy to give you access to trade their capital if you can show them that you have the trading skills to produce consistent results. You will get a share of the profits and can continue to improve your knowledge of the financial markets as you continue along your trading journey.