Traders who look for every opportunity to make progress in the financial market have probably heard of Proprietary Trading companies. These private firms hire successful market players to increase their capital. Usually, such companies offer extremely favorable terms, however, to become part of "the elite group", enthusiasts need to pass several difficult tests, proving their abilities in practice.
Lives of those who manage to become a member of Proprietary Trading dramatically change: they become rich, successful, and in demand, or are disappointed with trading and leave the business for good. So is it worth trying to get to the TOP or is it safer to continue to work for yourself, managing although small but your own capital?
Features of the business
To become a truly successful Forex trader, you must go through all the circles of trading hell and repeatedly face serious setbacks and failures, since the basis of an effective trading strategy is always a proper risk management strategy, which can be developed only when faced with some problems by yourself. Of course, some traders are good at learning from the mistakes of others, but still, the skill of self-control in critical situations is one of the main characteristics of a professional trader.
According to official statistics, most novice traders become disappointed with the financial market in the first few months. The reasons for this are varied: from the rapid loss of capital due to rash actions to the inability to cope with emotions.
Those traders who were able to improve their skills very often faced the issue of having not enough capital, which is why they could "play for the high stakes". Borrowing money is unacceptable because it will be negatively affecting the emotional state of the trader. Besides, it is a well-known fact that emotions are the main enemy of financial market players, as they undermine their trust in any algorithms and induce them to make bad decisions.
Ambition is the key to your progress
One way to solve the issue of having not enough capital is to try to become an employee of Proprietary Trading. In this case, you will be able to manage corporate funds, which allows you to increase both your capital and the capital of the company. However, getting a job for such a company is extremely difficult. There is a strict employee selection procedure, which exceeds the ability of even some professional traders with many years of experience, not to mention newcomers to the industry.
Benefits of working for Proprietary Trading
As mentioned above, the main advantage of working with trading companies is that you will be able to put to work large private capital. In other words, you will use other people's money to earn your own.
Besides, there are a few more advantages of working with Proprietary Trading:
1. Opportunity to learn. As a rule, large companies offer their employees comprehensive training, which allows them to become professional and highly qualified Forex traders, and significantly increase their profitability.
2. You will be able to explore the most radical trading strategies in such a company. Of course, the firm will require a trader to devote much more time to Forex trading, but this is what will allow him or her to grow professionally.
3. Traders working for Proprietary Trading companies get the opportunity to communicate with each other, be constantly among like-minded enthusiasts, discuss new ideas, and share experiences. The firms also offer their employees a wide range of different programs and other tools that allow them to monitor risks, analyze statistics and improve trading algorithms.
Remember that it is unprofitable for Proprietary Trading companies to have traders that are in the red or make no profit. It may sound cynical but if an expert does not make a profit, he or she will become an “unprofitable asset”. The firm is only interested in increasing its capital, and if traders do not make money, the business will cease to be profitable.
As a rule, Proprietary Trading companies perform basic tests, which may include various tasks to assess the level of understanding of the financial market, the economy, the ability to develop unique strategies, and even the applicant's IQ score.
Some companies do in-person interviews, which are extremely difficult to pass. Even if you graduated from several universities and have considerable knowledge in the field of trading, it does not guarantee you a successful interview and a place in the company. In general, in the process of communication representatives assess the personal psychological characteristics of each applicant, as the level of self-control directly depends on them. Overconfident or too eccentric traders can never guarantee the minimization of trading risks since they are too susceptible to emotions.
How to succeed in Proprietary Trading tests?
A perfect understanding of the market, the ability to create competent and effective trading strategies, experience with various financial tools – all this must be at a high level for a trader to get a job in one of Proprietary Trading companies. However, some tricks can help novice but very promising and determined market traders to get the necessary recourses and do their best.
In particular, one of the most popular Proprietary Trading companies is FTMO. Thousands of traders dream of becoming a part of it, because the company offers incredibly favorable terms: 70 percent of profits and capital up to $2 million. At the same time, the firm has very strict requirements for applicants. For example, the drawdown during test trading must not exceed 5 percent, or else the expert will risk private capital. It is extremely difficult to stay within the range even for professional traders, as you should not forget about decent growth.
Many Forex "sharks" could not get a job in FTMO, and this only confirms that it is almost impossible for novice traders without much experience to get the right to manage private capital.
But the problem can be solved by changing the approach to trading itself!
The world's best experts started to create applications aimed at passing the FTMO Challenge. You can find more information about this software at the link. The robots are designed for automatic algorithmic trading, and able not only to increase the capital of an ordinary Forex player but do their main job that is to pass FTMO tests and get the software holder a place in one of the most promising trading companies. Thus, even someone who does not have much trading experience can win the right to manage private capital. The key is to find effective software and keep getting better!