The formulas behind prop firm pass rates, expected value, and position limits — so you can calculate whether a challenge makes sense before paying the fee.
"$50K of your own capital at moderate leverage compounds faster without a profit split"
True, but that's exactly where systematic trading has an advantage. Scaling through prop firms is mostly operational: in my case, I run a multi-strategy, multi-symbol portfolio inside one EA, so deploying it to prop accounts means using a slightly simplified version of the same system I could trade with personal capital.
So it’s not just about extra buying power. Prop accounts can also act as an incubation layer for portfolio configurations and as a separate capital sleeve with a related, but not identical, equity path.
Hm, from what I know, only FTMO provides some kind of combined track record.
If we’re talking about other retail traders, then yes - I think prop firm results can be a decent basic validation. It shows you have some skin in the game and that your trading can be taken more seriously than just a backtest or screenshots. But whether it can really be called a “verified track record” is debatable.
If we’re talking about allocators, I don’t think prop firm track records are taken very seriously. The main issue is that prop firms usually push you toward low-capacity intraday strategies, or intraday wrappers around longer-horizon ideas, because of their rules and constraints. For trading firms or trading-related jobs, though, I think it can be useful as a signal.
A middle ground is something like Darwinex. A Darwinex track record can probably be taken more seriously, and they also added the ability to link an IBKR account some time ago. That makes it more useful for styles beyond typical prop trading - for example proper trend-following, equity long-only, or equity long/short strategies, although with a limited stock universe. Plus, it gives you some way to monetize a verified track record (15% performance fee from investors) without needing to launch a proper fund, which is expensive.
You mentioned you would be doing a continuation post about strategy compatibility, do you still plan on releasing that? thank you
I follow user requests so will prioritize this, expect within a week :)
Appreciate it!
Great I look forward to it!
"$50K of your own capital at moderate leverage compounds faster without a profit split"
True, but that's exactly where systematic trading has an advantage. Scaling through prop firms is mostly operational: in my case, I run a multi-strategy, multi-symbol portfolio inside one EA, so deploying it to prop accounts means using a slightly simplified version of the same system I could trade with personal capital.
So it’s not just about extra buying power. Prop accounts can also act as an incubation layer for portfolio configurations and as a separate capital sleeve with a related, but not identical, equity path.
very interesting, in your experience is track record from prop firms taken seriously?
Hm, from what I know, only FTMO provides some kind of combined track record.
If we’re talking about other retail traders, then yes - I think prop firm results can be a decent basic validation. It shows you have some skin in the game and that your trading can be taken more seriously than just a backtest or screenshots. But whether it can really be called a “verified track record” is debatable.
If we’re talking about allocators, I don’t think prop firm track records are taken very seriously. The main issue is that prop firms usually push you toward low-capacity intraday strategies, or intraday wrappers around longer-horizon ideas, because of their rules and constraints. For trading firms or trading-related jobs, though, I think it can be useful as a signal.
A middle ground is something like Darwinex. A Darwinex track record can probably be taken more seriously, and they also added the ability to link an IBKR account some time ago. That makes it more useful for styles beyond typical prop trading - for example proper trend-following, equity long-only, or equity long/short strategies, although with a limited stock universe. Plus, it gives you some way to monetize a verified track record (15% performance fee from investors) without needing to launch a proper fund, which is expensive.
With the sharpe of above 1.3 to be EV+, no wonder why there is so much prop firm out there. Thanks for your post, as insightful as always 💯