In the fast-paced world of trading, proprietary trading firms (prop firms) have become the gateway for ambitious traders who want to earn without risking their own capital. Instead of trading with personal savings, traders can now trade using a firm’s capital and share in the profits.
But not all prop firms are created equal. With so many options available in 2025, choosing the right one is critical. Firms like Pax Market Funds have gained popularity for their transparency, advanced funding programs, and trader-friendly policies — but before joining any firm, you need to know what to look for.
In this guide, we’ll break down everything you should check before signing up with a prop firm, using Pax Market Funds as a reference for what a reliable firm should offer.
1. Understand the Prop Firm Model
Before diving in, it’s important to know how prop trading works.
A prop firm provides traders with access to funded trading accounts — often ranging from $10,000 to $1,000,000 — once they prove their skills through an evaluation or challenge phase.
You, the trader, trade the firm’s capital and share profits (usually 70–90% in your favor). The firm provides the tools, capital, and structure; you bring the strategy, discipline, and performance.
Pax Market Funds, for example, follows this modern model — offering global traders an opportunity to trade multiple asset classes including Forex, indices, and commodities, all under strict but fair rules.
2. Regulation and Transparency
One of the first and most important things to check before joining any prop firm is regulation and transparency.
Ask yourself:
Is the firm registered or licensed under a recognized authority?
Do they provide clear terms of service, payout rules, and trading guidelines?
Are there real testimonials or verifiable trader results available online?
Firms like Pax Market Funds have built their reputation on transparency, offering traders clear evaluation criteria, defined risk parameters, and predictable payout structures. Avoid firms that hide details, charge hidden fees, or have unclear funding rules.
3. Profit Split and Payout System
The profit split determines how much of your trading profit you actually keep.
Typical industry ranges are 70/30 to 90/10, where the larger share goes to the trader.
However, you also need to look at:
Payout frequency (weekly, bi-weekly, or monthly)
Withdrawal methods (bank transfer, crypto, or wallet systems)
Consistency of payments (look for user reviews)
For instance, Pax Market Funds offers high profit splits and timely payouts, giving traders financial confidence and flexibility.
Remember: A great prop firm rewards consistent performance, not just one lucky trade.
4. Evaluation Process and Difficulty Level
Most prop firms have an evaluation phase to test your trading ability before granting a funded account. You’ll typically need to:
Reach a profit target (e.g., 8–10%)
Avoid exceeding a daily drawdown limit (e.g., 5%)
Maintain overall account balance discipline
The evaluation should challenge your skills but still be realistic. If the targets are too high or the rules too strict, the firm may be focused more on collecting fees than finding successful traders.
Pax Market Funds keeps its evaluation fair and attainable, allowing disciplined traders to succeed without unnecessary pressure.
5. Trading Instruments and Platforms
A good prop firm gives you access to a wide range of instruments and professional-grade trading platforms.
Before you choose, ask:
Can you trade Forex, commodities, indices, and futures?
Are you limited to one platform (like MT4/MT5), or do you have options?
Is the trade execution fast and reliable, with minimal slippage?
Pax Market Funds supports multiple assets and ensures access to institutional-grade liquidity, giving traders the same quality of execution as large hedge funds.
6. Risk Management Rules
Risk management rules protect both the trader and the firm. These include:
Daily loss limits
Maximum drawdown
Minimum trading days
Be wary of firms with confusing or unfair rules — for instance, those that cancel accounts due to small technical violations.
Pax Market Funds uses a clear risk framework, ensuring that traders are treated fairly and can recover from temporary losses. Their approach promotes long-term growth, not short-term traps.