Want to trade for a living, with the freedom to decide your own future? Need to do that without risking your own capital, getting a special degree, or having to know someone on Wall Street?

I've spent six years as a prop trader on a desk, and I've helped others get hired for prop trading jobs as well. It takes effort, but it's a lot easier than it was just 15 years ago.

Proprietary Trading Jobs

You love trading. You live it; you sleep and dream about it.

Whether you've just begun trading or have been at it for years, you realize it's not just an interest but a passion. If only it could be your career, too.

But you don't know where to start to make it your profession. Maybe you've tried sending resumes out to get interviews at proprietary trading firms.

How some Proprietary Trading Jobs see any applicant over 25 years old

Maybe you even got a few interviews, but they told you... 

  • You're too old (WTF)
  • We're only hiring interns and new graduates.
  • You don't have enough experience / your track record isn't good enough
  • We just don't think you're cut out for trading
  • You're not a fit for what we're looking for

Some of that, like the age discrimination, is BS. Experience requirements are reasonable. Anyway, you're about to learn how to prove them wrong.

In this article I'll show you how to become a professional trader starting wherever you are. Regardless of age, experience, or education level, there's a path for you. 

Grab the trading journal template I give to new traders below:

Then start using it to get closer to your goal of becoming a pro trader, as part of the steps below.

How to Get a Proprietary Trading Job

I'll cover three different routes you can take:

  • Easiest (low cost, don't need to invest your own capital, anyone can start)
  • Medium (low cost, requires some capital, maybe some interviews and tests)
  • Hardest (low cost, no capital required, but tough interviews and tests)

Prop Trading Jobs - Easiest Route

Bonus: The following steps can get you your dream job as a prop trader, where you can make an excellent living. But they can also help you get closer to the prop trading jobs that are hardest to get (routes 2 & 3 which I'll cover later).

1. Prepare yourself to be a professional trader.

If you're already trading for consistent profit, you can skip to step 2.

If you wanted to work as an electrician, you probably wouldn't just ask for a job without any electrical knowledge. Imagine asking a company to give you a salary and a truck full of expensive tools, without knowing what to do with them.

Proprietary trading isn't much different. A company will be giving you their own money, to trade with however you see fit. They'll provide you with trading software, or licenses to use that software. You'll be responsible for taking that money and that software and turning it into profits. You should know how to do that.

There is a world of knowledge available, so almost anyone can learn a few winning setups, for free.

Some firms will provide education. I highly recommend you do some self-learning first. Otherwise, you'll be paying for the education in one or several ways.

You don't have to become a market wizard. You do need to show you can trade one strategy with discipline and make the account balance line go up and to the right. 

That means:

  • picking a strategy with measurable, repeatable setups
  • preparing for the day and knowing what setups might arise
  • taking your setups when they appear
  • managing the trades by sticking to the plan unless something specific negates your setup
  • placing and keeping target orders / stop loss orders according to plan
  • taking notes after each trade for review after the session
screenshot of trading journal template full of trades

Track trades from day one

There are plenty of different patterns and setups to choose from, too many to mention in this article. The important part is that you stick to one until you've proven yourself with it. Do not flip-flop just because a few trades didn't work out. Don't go follow the next guru or the next shiny drawing of wavy lines on a chart. Focus, master one strategy, and master yourself. Your trading psychology must be as strong as your strategy.

2. Build a Trading Track Record

There are three steps to do this. If you prefer, you can do step 1 then skip step 2 and go straight to step 3.

Step 1 - Start with a simulation account - Some people say simulation trading doesn't matter, or it's pointless because it's not real money. And if they treat it that way, it is.

Every time I've been on a sim account, my future career as a trader was on the line, with someone watching my sim trading for evaluation. To me, that made it real enough, and I gave it the respect my future, and my future firm, deserved.

That sim was one step between me and my goal, and I took that seriously as life and death. And if I couldn't do that, why should they trust me?

Take it seriously. Put some pressure on yourself. 

If you can't make money on a sim, it only gets harder with real money. And regardless of how you join a prop firm, they might start you on a sim account anyway. When someone is watching your trades, you'll feel the pressure. You should be ready for that.

Trader at his computer, learning how to trade, in preparation for a prop trading job

Step 2 - Trade your own retail account.

Now that you're profitable with fake money, next step is to make things more real. Before we get into this, I want to emphasize something you've probably heard before:

Never risk more than you can afford to lose. Of course, you don't like losing money, and you plan to make money, not lose money. But trading has risks, and you can lose all the money you put in. In margin accounts, you can lose more than you put in.

How much can you afford to lose? What amount could you lose without hurting your life or your family? How much before you risk your ability to meet your financial responsibilities? If there's an even smaller amount, which if lost, would depress you mentally, then risk even less than that.

What if you don't have thousands to risk? What if you could afford to risk it, but would rather risk less? I'll provide an alternative in step 3 - prop firm evaluation accounts.

How much do you need, to trade? There are too many variables to say, but here is a general rule of thumb:

  1. You need 50 trades worth of risk capital in your account. We call your risk on each trade R, so that's 50R. In other words, you need to be able to lose 50 times in a row before you hit zero. I'm not saying this will happen, but you need to allow for variance.
  2. You need to be able to risk the same dollar amount on each trade.
  3. Avoid paying big commissions - money saved is money earned. Plenty of brokers for stocks (ex: Ameritrade) or futures (ex: AMP futures) have no/low minimums, and no/low commissions.

If trading stocks:

  • you can only make 3 day-trades per week unless you qualify as a "Pattern Day Trader". To request that, you have to maintain over $25,000 in the account. The specific rules are more complicated, but that's general effect they will have on you.
  • most decent trading platforms don't offer fractional shares. So you'd need to buy at least 1 share of each company in each trade.
  • the less you can risk per trade, the harder it will be to keep your R (risk amount) consistent, unless you trade the same stock every time. 

If trading futures:

  • it's easier to size each trade the same (1 contract).
  • you can trade micro e-minis to keep it small. 1 micro contract =1/10 e-mini contract.
  • .3 % move in the Micro Nasdaq 100 = roughly 40 pts = $80 profit/loss. To make 50 trades with only 1 contract per trade (no adding to positions), you need about $4,000 on deposit.
  • You need to understand how leverage works. You're borrowing money, short term, to buy something that has more value than your deposit. 
  • You need to learn how margin works and understand that you can lose more than what you've deposited. 

Step 3 - Prop Firm Evaluation Accounts

This step can be used in place of, or after, Step 2.

If you don't want to deposit several thousand dollars, you might consider an evaluation account with one of several "funding firms". It's also faster than setting up a brokerage account and depositing money, etc.

An evaluation account is a simulated trading account, monitored by the provider. Your performance can earn you a funded trading account. Most of these accounts provide access to the futures markets (CME, NYMEX, COMEX, CBOT). Some offer access to forex, or CFDs (not recommended by me, but some traders prefer them).  

Most evaluations are by Trader Funding companies. Some of these are Proprietary Trading Firms, providing the capital themselves. Others are non-prop companies partnered with a Proprietary Trading Firm who provides the capital. You can think of those as a recruiting arm of the prop firm.

Trader Funding companies are often called Proprietary Trading Firms, which is cause for some confusion. But no need to be confused. You can ask them which company provides the capital, if it's important to you.

screenshot from earn2trade.com

Earn2Trade is one firm allowing you to start with a $50k evaluation and work your way up to a $400k live trading account. Read about my firsthand experience with them in my Earn2Trade review.

How it works: You pay a fee, they send you login instructions instantly, and you can begin trading within a few minutes. You'll trade your own strategy, and try to reach a set profit target, while following their rules.

Many people focus on the initial account balance of these evaluations, but that's a mistake. The number that matters is the drawdown allowed. That's your risk capital, your "wiggle room". I recommend looking for wiggle room of $2,500-$3,500. If you need more room to let your trades play out, then go bigger. But you'll be paying more for the evaluation, of course -- And you'll usually get a less favorable ratio of profit-target to drawdown.

Rules vary with each program, but they want to see you follow proper risk management. Stay within loss limits, meet consistency goals if they exist. Rules for most evaluation accounts are looser than what you should already be giving yourself.

screenshot from earn2trade.com

Now, day trade every day, and follow the rules. At this point, you should trade as though you are a professional. Treat it like a career (even if you're doing this on top of your current job). Go through your morning routine every day. Look at the levels where you might see your setup and set alerts. If your setup allows you to place orders ahead of time for entry, do that. Use bracketed orders that send your stop-loss and take-profit orders upon entry.

Depending on circumstances, focusing on trading in the morning may be harder for some people than others. Where there's a will, there's a way. You don't have to trade all day. In fact, you probably shouldn't. My best opportunities come in the morning, and I stop trading after 2.5 hours most days.

The other professional traders I know don't usually trade during mid-day. They find something else to work on until the final hour of US retail trading (3pm-4pm ET). 

Late-morning and afternoon trading is more challenging. It's not a very profitable time for me, so I avoid it. Globex (after US retail hours, through the night) provides less liquidity. If you can only trade at night, you have to adapt. I have the luxury of working during the day and sleeping at night, so I do that.

new trader working at his remote prop trading job, sitting at his computer with multiple monitors

3. Become a Funded Trader

If you follow all the rules and reach your profit target, the company will have you fill paperwork and set up your prop account. How that account works will vary based on the company and program you chose. You can consider much of that before you ever sign up for the evaluation.

At that point, you are, for all intents and purposes, trading for a Proprietary Trading Firm. You'll be a 1099 contractor or a K-1 member, depending on your paperwork, as most traders are. You'll still be responsible for following rules and managing your risk, which is true for all prop firm traders.

Step 1 - Review Agreements. Read them like you would read any other important contract. Have a lawyer review them if you want. Don't sign until you've asked all your questions and are comfortable with everything. 

Step 2 - Wait for your new account. Some firms take a day or two, others take a week. Most of them have that info available to you before you sign up, or you can ask. If it's going to be a week, take a few days of rest, don't sit around stressing about why your account isn't ready yet.

Step 3 - Trade every day, following the same rules and the same good habits. Trading is a business, treat it like one.

Cliche as it may sound, trading for a living is absolutely a marathon, not a sprint

Step 4 - Build a cushion. Then build it some more. Many new prop traders get so excited they come out swinging for the fences. We're at the highest risk as traders when we've had a great success. Getting funded affects our emotions the same way a big win does. Stay consistent with what you've been doing. Again - it's a marathon, not a sprint.

Focus on your process and on trading well. The money will come, and the cushion will grow.

You want to build that cushion so that you put distance between yourself and your max drawdown. You want to be farther away from it as time goes on, so that you can scale up.

Once you've built some cushion, take a paycheck. Don't withdraw it all, keep some breathing room. But you need to reward yourself for your hard work.

Most companies allow you withdraw profits once you've:

  • traded that account for a certain number of days
  • built a specific amount of cushion.

Your own cushion "quota" should probably be more than what they're requiring, but that's up to you.

Step 5 - Scale up. First, you don't have to scale up. If you can average $200/day in profit, and that's all you want and need, that's not a terrible way to earn $50k/yr. If you want to aim higher, the freedom is yours, and the opportunity is virtually unlimited.

Most firms will let you grow your account as much as you want. Some will let you add more accounts to trade. Either can help you scale your trading career to maximize potential earnings. If that's something you want to do, consider that when finding the best prop trading firm for you. 

If you fail your evaluation: If you break certain rules, you fail the evaluation, sometimes known as "blowing up" the account. Depending on the firm, you'll have some of these options at that point:

  • Give up
  • Pay a "reset fee" to get your account back immediately, with full starting value again
  • Wait for the next month, if a subscription renewal resets your account (some firms do, some don't)

Stopping is always an option. Even if your evaluation account is on a subscription basis, you can always stop. If you don't want to try again, cancel your subscription so you don't get charged again. If you still want to trade, I recommend going back to your simulation account. Avoid revenge trading your real-money account.

Resetting may or may not be a good option depending on how you failed. If you made a simple mistake, that's one thing. If you lost your discipline, consider trading your simulation account for a few days first. Again - Trading is a marathon, not a sprint. You don't need to get back in right away, even though it feels urgent.

If subscription renewals will reset your account, you may prefer to wait. I think waiting is a good idea for most, and it can be beneficial to your growth as a trader. I won't dive deeply into psychology here, but you need to consider one thing:

Learn from failure. When you screw up, you need to:

  1. interrupt your negative pattern. You don't have to punch yourself (I know traders who do, though). I recommend you stop trading - for at least a few minutes, maybe for the whole day. Then.. 
  2. Review what happened and the thoughts/emotions that led to your actions.
  3. Immediately create a plan for preventing a repeat and holding yourself accountable.

Avoid reinforcing the bad behavior. When you get a positive result (a fresh account balance in this case) immediately after screwing up, you reward bad behavior. That reinforces bad behavior, which creates bad habits. It happens subconsciously. Bad habits can develop in the blink of an eye. Even seasoned traders fall victim, and it can sink a career.

A bad habit can form in one day, but it can take months to break that same bad habit. Ask me how I know...

Man feeling the pressure of prop trading, sitting dejected at his desk with his head in his hands

Trading can be very frustrating. Blowing an account can be crushing, but it happens. That is all part of trading. Learning to manage emotions and not let them get the better of you is part of the game.

If you break a rule after being funded, you will have to pass another evaluation. 

Trading rules are essential. Sticking to your own rules is critical. When you trade someone else's money, you have to follow their rules, too.

When funded, rules are usually simple. For example, don't exceed your loss limit, and don't trade more size than you're allowed.

If you break a hard rule in an evaluation, you lose that account. Then you will have to pass another evaluation to continue. If you have other accounts where a rule was not broken, you'll still have those accounts. Make sure you know the rules that apply to each of your accounts.

Other than that, just trade. Continue to grow your knowledge and your understanding of the market and how it behaves. There is no substitute for the experience of spending every day trading for years and years. 

Keep your discipline intact, and constantly monitor yourself. Monitor your strategies and pay attention to changing economic cycles.

Live to fight another day, always. Put your money into savings, don't blow it. There will be lean times, and there will be difficult times. You need to survive those so you can capitalize on the good times.

Prop Trading Jobs - Medium (More Barriers to Entry)

For this one, we have to assume:

  • You've already done steps 1 and 2(or 3) of the 'Easiest Route'.
  • You're a profitable trader. 
  • You can prove you're a profitable trader (more than just a screenshot).

You can go this route without having gone through evaluations to trade with a prop firm. But the experience would be good to have.

This route requires you deposit your own capital. For that reason, I call the firms in this section "semi-props". Before we look at the details of that, let's ask, why might you consider this?

  • You want access to a wider range of securities to trade (stocks, options, hard-to-borrow stocks, etc).
  • You want to be in an office with other traders (not all semi-props have them, but many do)
  • You want access to the specific technology a firm uses (but most just use lightspeed or slightly better)
  • You want to risk your own capital but with more leverage than you can get through retail brokerages

Step 1 - Build a Trading Track Record. 

If aren't trading for consistent profit, go back up to build a trading track record.

If you are, make sure you can prove it. You might have to show this to the firm. The longer your track record, the better your chances.

Step 2 - Apply and Interview

These interviews are simple compared to what you might see at a corporate job, or at the prop firms covered in the next section. Most of the semi-prop firms accept most traders that can meet two requirements: 

  • Requirement 1 - Capital: You have to have the minimum risk capital to deposit, usually $10,000 - $25,000. Again, this has to be money you can afford to lose. These firms usually provide between 15x - 30x leverage. So depending on the firm, a $10,000 deposit would get you between $150,000 - $300,000 in buying power.

    Some firms require you to maintain that deposit balance at a certain level: 
    • For example, you deposit $25,000 and get $750,000 in capital. You have a losing day of $2,500. You may or may not have to deposit $2,500 in order to trade the next day - depends on the firm and their terms. Don't agree to that unless you can afford to do it easily.

      Some firms also require that the funds stay deposited for a certain amount of time, so be aware of that as well.
  • Requirement 2 - You know how to trade: You shouldn't even consider this unless you are profitable. Full stop.

    The firm may or may not ask for your trading history. If so, it could help to have some trading history using OPM as well (Other People's Money).

Step 3 - Pass Securities Industry Exams 

Due to firm structure, most semi-props need you to pass the SIE exam and Series 57 exam.

The ones that require it will 'sponsor' you for the exam, which allows you to register. But you may have to pay exam fees, at least until you pass - $60 each as of this writing.

Step 4 - Become a Semi-Prop Professional Trader

Step 1 - Fill paperwork and get set up: You will have to sign some agreements. Read them carefully. Having a lawyer review them wouldn't be a bad idea. As questions and get comfortable with it before you sign. 

They'll set up your computer if they provide that (some do, some don't), or with their software on your own machine. Then you're ready to go.

Meet the people. Be open-minded and willing to learn. Be sociable and friendly, and make friends. Otherwise, you may miss out on the benefits of being in a trading office to begin with.

Step 2 - Trade every day, following the same rules and the same good habits. Trading is a business, treat it like one. 

Step 3 - Build a cushion well above your deposit. Trading with leverage means you can make money more quickly...or lose money, more quickly. It makes all the numbers bigger, red or green.

You need to start slow and build a cushion. Give yourself breathing room between your deposit amount and your account balance. You want to get farther away from it as time goes on, so that you can scale up. You don't want to have to deposit more money to keep trading.

True to Murphy's Law, the need to deposit more would inevitably hit you at the worst possible time. It would be an ultimatum (deposit more or leave) and your trading career could vanish like a fart in the wind.

In addition, firms like this charge monthly fees. Those will generally range from $500/month to $2,000/month depending on what technology, data feeds, and news feeds you use. You don't want to have to come out of pocket for those in a slow month, either.

Prop Trading Jobs - Hardest (Highest Barriers to Entry)

The traditional prop trading jobs have the highest barriers to entry. These "old school" firms are quite different from the remote-only prop and funding firms becoming popular these days.

This route favors young people, especially college students and recent graduates. If you're over over 23, you're getting old. Over 25, your chances are greatly diminished.

Before you think of claiming discrimination, understand this: Prop Firm Traders aren't employees of a firm. They don't have the same rights. They're usually some form of Limited Partner, Limited Member, or Independent Contractor. Trader recruitment isn't subject to anti-discrimination laws.

Of course, there are some exceptions to the ageism. I've seen some traders hired in their 30's. I was rehired at 36. If you want to be an exception, you better build a great track record. See that again in the section on Prop Trading Jobs - Easiest Route

AI image of the front of the New York Stock Exchange, a trading building

Despite popular belief, not all these firms are on Wall Street. Many of them aren't even in NYC or Chicago.

The firms at this level provide capital without any deposit of your own. As the other firms, they generally take on full responsibility for your risk. 

  • Some of them provide trading training or education, and they charge handsomely for it. $5,000-20,000. No clue if they're worth it, I've never considered that route.
  • Some of them offer internships, some don't. 
  • Some of them will hire experienced traders. They will require proof of long-term consistent profitability - at least three years.

The application process varies by firm, but generally it looks like this:

Step 1 - Prop Trading Job Application

  • Fill out an online form or send in a resume - If they're recruiting traders, they'll generally say so on their web site. These jobs will rarely be posted on traditional job sites, you'll have to go directly to the prop firm's site.
  • Put energy, thought, and effort into your cover letter. You need to concisely convey your passion for trading and show you're a good fit, not just a dreamer looking to get rich quickly.

    Prop firms don't know how to pick a good trader out of a crowd. If they did, there would be many more successful prop traders. There are qualities that tend to correlate with successful traders, though:
    • They possess the ability think and act quickly, learn, and adapt. 
    • They can take in a lot of information, process it, and act quickly and logically. i.e. good video gamers
    • Self-disciplined
    • Calm and rational under pressure.
    • Indifferent to money. Think poker pros that are cold as ice no matter the stakes.
    • Quick with math. If you aren't yet, you can pick up these mental math books to learn some tricks.

Step 2 - Prop Trading Interview:

Interviews may include multiple rounds with risk managers, current traders, and possibly partners. You may also sit in with some current traders while they trade, especially if they have a mentorship program. 

prop trading interview illustrated by artist

 Aside from some of the usual getting-to-know-you conversation, interviewers may ask questions like:

  • Why do you want to be a trader? Hint: If you can explain this with a story, it will have more impact.
  • What percentage of traders do you think are successful, and why? Hint: short-term it's about 1 in 5, long term it's less than 1 in 25. Each of these stats account for traders who had what it takes to be hired.
  • Can you survive without income from trading, and for how long? Are you willing to do that?
    •  Do you have a spouse/kids/family that depends on you and is on board with this?
  • How long are you willing to give it your all, knowing you could still fail? Hint: 12-18 months but you hope to earn a check in 6-8.
  • What trading experience do you have? Hint: Don't brag. Give a humble account of your experience, even if it's impressive.
  • What are your trading goals? Hint: Focus on process and progress, more than monetary goals.
  • Where did you learn to trade? What trading books have you read?
  • Do you think you can make $1,000,000 a year? Hint: be able to answer with real confidence rather than blind arrogance.
  • Are you in debt? Hint: Testing your answer about survival.

Step 3 - Prop Trading Skills Testing

Some firms give you skill tests after your interviews if they still think you're worth their time. They'll evaluate qualities like thinking speed, multi-tasking, decision making, temperament, and mental math.

The first prop firm that hired me gave me a test that evaluated all of these at once. I was at a computer, with a desk phone. I had two monitors.

One monitor held a word problem test, timed. On the other was a game like Tetris, and a window for entering answers relating to the phone.

  • With the Tetris game, I had to solve the math problem on the falling block and enter the answer before I could direct the block.
  • Every 20 seconds or so I got a popup with a different math problem. I had to wait a specified amount of time and then call a number to enter the answer.
  • Meanwhile I had to answer the word problems on the other monitor.

It was fun, as probably only a trader would think, but it was challenging. 

Another firm I applied to at the same time only gave me the Wonderlic test (famous for being given to NFL quarterbacks). They didn't hire me, and I didn't think it was a good fit either. But I did wish they'd told me what I got on the test.  

a flowchart demonstration of the Monty Hall Problem

The Monty Hall Problem, illustrated by brilliant.org

Other tests you might encounter:

  • Simple mental math quizzes. You can learn mental math quickly through books. It's a good skill to have as a trader.
  • Riddles and logic puzzles. i.e., the Boy or Girl paradox, Sleeping Beauty problem, Two Envelopes problem, or Monty Hall problem
  • A day of trading on simulation

Step 5 - Become a Prop Trader

Step 1 - Logistics of a trading job: If you're hired as a trader, you'll be given legal agreements to review and sign. Have an attorney look at them if you're concerned about anything. There's probably nothing nefarious, but you should always know what you're agreeing to. Make sure you're good with it before signing.

They'll set you up with your workstation. Generally these firms will provide you a solid computer, but you're also free to bring your own. They also tend to have IT on staff to set everything up.

Step 2 - Time to trade: Some firms will require you to trade on simulation before going live. They may have a set time, or they may tell you "until we decide otherwise". Usually, they're up front about their policy when you interview.

Sometimes you'll be at the whim of whoever is Head of Trading, Risk Management, etc.

Either way, be patient, treat sim as real money, work your process, and trust you'll get where you want to go.

Step 3 - Performance: When you go live, they'll give you any combination of these limits:

  • Max loss per day
  • Max loss per trade.
  • Total drawdown limit

Depending on experience, you'll start with small limits. For example, $500 daily loss limit and $25,000 max drawdown. As you prove yourself, you'll be able to increase your capital and loss limits.

Your monthly costs will probably accrue as a debit against your payout balance. In other words, you'll have to cover those before you can get your profit share. 

The costs with these firms average higher, from $1,500 to $4,000+ per month. With my last firm, I was paying $5,300/mo in fees. My profit split, after those costs were deducted, was 50%.

Fortunately, most firms won't require you to pay those out of pocket (except group health insurance, if you sign up for that). But you have a significant hurdle to overcome each month, which is more substantial when you're just starting out.

Even with these costs, it can be worth it. If you're successful, you can work your way up to tens of millions in buying power and tens of thousands in daily loss limit.

A note on Internships: Many of these firms also offer internships. I never went through one of those, never tried. But I've observed an internship program for a couple of years and may cover that more in another article. Bottom line is, apply while you're in college and don't expect to trade real money for a while.

What is Proprietary Trading (Prop Trading)?

In Proprietary Trading, a firm provides their own capital to traders, in exchange for a share of trader profits. Traders are usually not held financially liable for any losses they take on, though they will be cut off/fired if they're not performing well.

They may also provide in-house technology. They usually pass on some or all data and technology fees to the trader. These are not hedge funds or banks. Their only business is trading firm capital.

  • Some provide an office with a trading desk.
  • Some provide a way to trade in the office or remotely using proprietary software.
  • Some offer education. Some charge for this education. 
  • Some only provide capital and licenses for third-party software.

Banks used to have proprietary trading arms, but the Volcker rule made those illegal. That's not the kind of proprietary trading firm I've discussed in this article. Bank prop trading departments used to be "walled-off" divisions of the bank. They traded on behalf of the bank, often against clients. They come under scrutiny for conflicts of interest and poor risk management.

Types of Proprietary Trading Jobs

Trader (discretionary): This is the position I've covered in this article, since most people come here looking for this. A discretionary trader uses firm capital and software, comes up with strategies, and executes them.

Trader (quantitative or automated): Many firms offer trading roles for quantitative traders. Also called algorithmic (algo) traders, they program their strategy into computer scripts. Those scripts then find setups and execute automated trades.

Sometimes these are "hybrid", meaning an automated strategy with some discretionary human execution.

Developer: Some firms hire developers to code models for the firm. Successful discretionary traders sometimes hire developers to automate some of their own strategies.

IT: Some firms have complicated systems and sizable IT teams to manage those systems. Small firms may have a few IT pros that wear many hats.

Types of Proprietary Trading Firms

Trader Funding Firm: Many of the proprietary trading firms that have launched in the last ten years are trader funding firms. They act as a recruiting arm for a partnering prop firm which provides the capital. Traders are fully remote, there's no trading desk.

Semi-prop: These firms provide prop accounts that are partially funded by the trader. They usually offer more leverage and better tech than retail brokerages. Traders may be on a desk, or they may trade remotely.

Full Prop: These firms provide capital and don't accept deposits. They have a trading desk and some proprietary technology. The hiring process is more traditional, and you'll have a boss. The amount of autonomy you'll have varies from firm to firm. Traders are usually expected to be in the office during trading hours.

Trader Funding


Full Prop


Provided by partnered prop firms

Leverage provided on trader deposit

Provided by firm


Third-party, usually retail platforms

Third-party retail platforms, licensed prop trading software

In-house prop-trading software and support


100% remote

Remote or on desk

Trading desk

Benefits of a trading desk are subjective. If you want to be on a trading desk with other traders go for it, but in my experience it's not all it's cracked up to be.

For me it's too many distractions. For example:

  • Other traders sharing ideas that may or may not be good but don't fit your strategy
  • Bosses dropping in to say something that could derail your concentration or emotions.
  • Pressure to overtrade if your boss expects you to be there trading
  • Constant news from multiple sources, TV and squawk boxes.

For me, there was more downside than upside. Your mileage may vary.

Prop Trading vs Hedge Funds

Prop trading varies from hedge funds in that prop firms never trade customer money. They don't have any customers invested with them. They trade firm capital, usually leveraged through a prime broker.

Prop trading also works differently. Each trader has their own account(s), and they only trade on those accounts. They may have joint accounts with other traders, but they don't trade for a "fund".

Prop traders are generally compensated differently, also. They don't typically get any salary, only a split of their own profits. Hedge fund traders generally get paid salary & bonus based on fund performance. 

Algorithmic Trading vs Discretionary Trading

Algorithmic trading is increasingly prevalent, but there are still many discretionary traders.

Discretionary trading is where a person like you has a trading strategy, plans a trade, and executes and manages that trade all the way through.

In full algo trading, the strategy is written into a computer script that monitors the market. When it sees its desired scenario, it executes a trade from start to finish.

Between full algo and discretionary, there are a lot of hybrid trading strategies.

For example, the program "watches" for the trade setup and enters the trade. Then the discretionary trader manages and exits the trade.

Modern prop firms have a mix of algo trading, discretionary traders, and hybrid traders. 

Is Proprietary Trading Right For You?

This comes down to how badly you want it. Trading careers draw smart people, but it's not rocket science. Successful traders have the ability to solve problems, form plans, then execute and stick to them.

If you enjoy challenging work, self-mastery, and problem-solving, you'll love it - Even when it's the most frustrating thing in your life. Some people reach that point, and they burn out and quit. Others keep going, and that's the biggest difference between a professional trader and someone who didn't make it.

Prop Trading Career Advancement, and Life After Trading

Your prop trading career can progress as quickly as you do. If you're consistently improving, you should be able to scale indefinitely, and grow your career and your earnings that way. You may move between firms, but once you're a successful trader, your goal is to keep performing.

Prop trading is unique in that there aren't many other jobs to which it leads. If you decide to leave trading, you'll want to have a plan before doing that, if possible. There are very few careers for which a hiring manager will understand your role and skills as a trader, and how those might translate to another job. The only people who will understand are other traders. 

You could potentially move into a role as a risk manager, compliance officer, or other management role within your prop firm. You'd probably need to develop some new skills for that, but at least they'll understand your value as an experienced trader.

Otherwise, former traders usually venture out on their own to start some other business. The independent, driven, self-starter nature of a trader is well-suited for entrepreneurship. What business? That's up to you.

Conclusion: How to Get a Proprietary Trading Job

Getting a proprietary trading job is different from most other jobs. You have to prove yourself capable and worthy of the firm's capital and resources. You need a solid trading track record. You need passion and confidence in your abilities. And you need to convince the firm you'll remain dedicated and stable under great pressure with little or no pay until you make it.

The processes outlined above spell out what you need. The rest is up to you!

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Daniel Larsen

Daniel created epicctrader.com to help new and experienced traders level up. He began trading in 2002, and has spent over a decade trading professionally, for prop firms and clients. When he's not at a computer, you can find him on the ocean, in a canyon, or in the mountains.