How Much Can You Earn in Proprietary Trading?

Prop firms offer funded trader programs that can let you earn substantial profits. This article highlights how much you can earn with a prop trading firm.

How Much Do Top Prop Traders Make Annually?

Data from Zippia shows that the national average salary for a proprietary trader in the United States is well over $100,000 per annum and an average hourly wage of $48. However, as we see below, the earnings will likely differ depending on certain factors.

Location

A significant factor is determining how much a trader will earn from prop trading. Financial hubs like New York, New Hampshire, Rhode Island, Nevada, and Delaware are among the regions that offer prop traders higher salaries than in other areas. For instance, according to Traders Union, prop traders earn an average of $126,000 annually in New York, while in New Hampshire and Rhode Island, they earn roughly $124,000 annually.

Experience

Experience is another key factor that affects how much a trader earns with a prop firm. A prop firm has different experience levels, from the lowest to the highest earning.

Junior Trader

Every trader enters the prop industry as a junior trader who has to prove his trading skills by passing an evaluation program. Certain conditions like profit targets, drawdown limits, and daily loss limits must be met to move to the next phase.

Senior Trader

Different firms name it differently. Once a trader passes an evaluation, he is provided with a master account, where he can receive a hefty profit split. Best Prop firms set criteria for scaling. As they scale up, the traders receive more perks and bigger accounts to manage.

Partner

Some prop firms offer their traders a new agreement with a more significant profit split and several other benefits when they reach a certain level. FundingPips calls this Hot Seat, which is the ultimate goal of a trader.

Firm Size

Company size is the third factor that may influence the amount of money you make through a prop firm. Large established firms with strong financial base pay their employees better remunerations and other incentives. For instance, FundingPips is famous for offering the highest payouts to prop traders and up to 100% profit splits.

Prop Trading vs Traditional Trading Salaries

Prop trading offers traders the opportunity to earn money and develop careers. To access a master account, traders only need to pay a small evaluation fee and pass the evaluation challenge. Master accounts allow traders to use higher volume, leading to huge profits.

Moreover, prop firms have scaling plans that lead to gradual account growth. Prop firms allow traders to trade without losing their funds, allowing them to take calculated risks.

Traditional trading, on the other hand, may not be lucrative. In this system, a trader would deposit his funds to a forex broker. Traders under this system rarely take large positions due to small personal accounts. Furthermore, they are opened up to the risks of the forex market and are less likely to make the kind of trading risks that could lead to huge payouts.

Best Proprietary Trading Firms for High Income

With prop firms, you have tremendous income potential with no upfront capital requirements. One of the best prop firms that promotes this philosophy is FundingPips. Let us look at the firm’s structure.

Master Accounts

The firm provides five different pricing for their Standard accounts, suited to the traders’ preference. The basic one lets you buy a $5,000 standard-funded trading account for only $32. The second Standard option gives you a $10,000 funded account for $59.  The third option gives you access to a $25,000 funded trading account for $139. The fourth option is the $50,000 funded trading account, which costs $219. The highest tier for the Standard is $349 and allows access to a $100,000 funded trading account.

All you need to do is pay these small evaluation fees and pass their two-step or three-step challenge, and you can access these master accounts. These accounts allow you to take a share from your earned profit. FundingPips has a profit split of up to 100%, allowing traders to pocket most of their profit.

Scaling plan

Apart from having master accounts at low evaluation fees, FundingPips has a scaling plan that helps you grow your account. For example, you receive an increased daily maximum drawdown limit in addition to the raise in your account based on the earnings you secured in your and the number of payouts you received.

Your drawdown limit increases by 1% when four consecutive withdrawals are made and a 10% total profit is reached. You may also be eligible for a 20% increase depending on the initial account value.

You will be eligible for a 30% increase, the drawdown limit will grow to 6%, and the maximum drawdown will increase to 12% following eight successful payouts and a 20% total profit.

After 12 successful payouts—which are incredibly consistent here—and a 30% overall profit, you will be entitled to a 40% raise based on the initial account worth. This increases the allowable drawdown to 13%.

After 16 successful payments and a 40% overall profit, you will be eligible for the hot seat, which offers unique advantages like increased account balance, one-on-one assistance, and advanced trading tools.

Additionally, you will receive On-Demand payouts, a 90% profit share, up to $2 million in potential scaling, and trading conditions tailored to your trading style. Additionally, the company will raise the daily and maximum drawdowns on your accounts, and depending on your account size, you can also receive incentives.

Conclusion

Prop firm trading can be a very lucrative venture. Join FundingPips and start your trading career today!