Trading futures is an art that takes time, discipline, and a lot of screen time; it's not a quick-money scheme.
What is the more intelligent move, then? Do you do it yourself first, or do you jump right into a prop firm? Let's break this down logically, without any jargon or hype.
What's a Futures Prop Firm Anyway?
Now, before we even reach the advantages and disadvantages, let's get it straight about what a prop firm is. A proprietary trading company (or "prop firm" in short) is essentially a business that provides traders with access to funds. In return, the trader gives up a slice of the profits he earns. Sounds quite nice, doesn't it? You get to trade large accounts without committing enormous amounts of your own capital.
The majority of futures trading prop firms use an evaluation model. You pay a monthly subscription to demonstrate your abilities by reaching specific profit milestones without violating rules such as max daily loss or drawdown. Pass, and you earn a funded account. Easy in theory—but not so easy in practice.
The Allure of Jumping Into a Prop Firm Right Away
Let's get real: the attraction of entering a prop firm early on is powerful. Who wouldn't want to switch a $50,000 or $100,000 account without having to risk their own life savings? But that's only the tip of the iceberg. Here are reasons why most new traders prefer prop firms from the start:
You Don't Need a Huge Starting Capital
Trading futures on one's own isn't inexpensive. Even with micro contracts, you still have to have a few thousand to trade easily without blowing up. A prop firm can introduce you to the game for a fraction of that price. Some assessments begin at $50-$150 monthly. That's against requiring $3K, $5K, or more out of your own pocket—it's no surprise so many newcomers leap in.
The Funded Account Dream
The idea of passing an evaluation and landing a $100K account feels like winning the lottery for a beginner. Suddenly, you’re thinking about pulling $1K or $2K out in profits every month instead of scraping together $50 a day on a small personal account. It feels like the fast lane to serious money.
Built-In Risk Management
Prop firms have strict rules—daily loss limits, trailing drawdowns, consistency requirements. Annoying? Occasionally. Useful? Yes. Those rules keep you from blowing up, particularly when your emotions get the best of you following a losing trade.
But here's the catch: while those advantages may sound excellent, there's another side to the story that newbies rarely consider.
The Case for Learning Solo First
Before you whip out that credit card for that evaluation account, let's discuss why learning on your own would actually be the better bet.
Prop Firms Are Not Trading Schools
This is the section most people miss. Prop firms aren't in the business of educating you on how to trade. They just want one thing: to take profitable traders and grow them larger. If you're still having trouble with the fundamentals—such as interpreting price action, controlling risk, or remaining disciplined to a plan—you're not there yet. And you'll most likely fail that assessment repeatedly, wasting subscription costs.
Pressure Makes You Do Dumb Things
Futures trading for beginners is already a psychological game. Now add the pressure of rules of evaluation—such as "don't hit trailing drawdown" or "hit target before 10 days expire"—and you have the ideal recipe to make trades from pressure, revenge trading, and blowing up accounts. If you can't remain composed on a demo account, you'll do even worse with someone else's capital.
You Still Have Your Own System
No prop firm is going to give you a system. Sure, some provide educational resources, but ultimately, you have a system that serves you. If you have not experimented and perfected a strategy yourself, going into a prop account is like getting into a boxing match after watching a few YouTube videos.
The Honest Truth: Most Beginners Don't Pass Prop Evaluations
Most beginners don't pass assessments. And it's not that they aren't intelligent enough. It's that they attempt to walk before they can run. They believe becoming a member of a prop firm will somehow cause them to become disciplined or profitable. Spoiler: it won't.
Passing an assessment calls for consistency, risk management, and emotional control. You do not yet possess those, then shelling out $150 a month is not going to cut it—it will only annoy you.
So… Which Path Should You Take?
Here's where we get real. The solution isn't either/or. It's based on where you are in the trading process. Let's cut it into scenarios:
Scenario 1: You're a Total Rookie
If you don't know what "tick value" is or haven't practiced on a demo account, DON'T join a prop firm yet. You're wasting money. Take time to learn the fundamentals:
- How futures contracts work
- How leverage and margin impact you
- How to read charts and price action
- How to manage risk
Sim trade. Journal. Make mistakes without paying for them. When you are able to trade a demo like real money and stick with a plan without violating rules, then begin thinking about a prop firm.
Scenario 2: You've Got a Strategy and Some Discipline
If you’ve been demo trading for a while, maybe even tried a small live account, and you’ve got a system that works most of the time, joining a prop firm might make sense. But start small. Go for a lower-tier account first. Focus on passing one evaluation without rushing.
Scenario 3: You’re Already Consistently Profitable
If you’re making money on your own account and just want to scale without risking more of your own cash, then a prop firm is perfect. That’s what they’re built for. In this case, you’re not learning how to trade—you’re leveraging someone else’s capital to maximize your edge.
