Prop trading has exploded in recent years. One of the primary drivers behind this is the rising use of automation and technology by prop firms or Trader-Funded Firms (TFFs).
With so many options available in the market, picking the right tools can be overwhelming—researching can be a chore and time-consuming. Many firms end up with subpar systems that result in inefficient systems, poor trading performance, increased operational risks, lower profitability, and, worst case, a loss of competitive edge.
To avoid this situation, we’ve done the legwork and listed the top 6 things to look out for in technology solutions for prop trading firms.
TL;DR
Prop trading technology is software TFFs use to evaluate and support traders. Pick a platform that supports unlimited challenges, has a clear dashboard, integrates easily, and automates risk management.
6 Things to Consider When Choosing A Prop Trading Tech Provider
1. Unlimited Challenges
One key aspect of a prop trading solution is unlimited challenges. The ability to create multi-stage challenges with customizable trading objectives is essential for identifying exceptional traders.
The best solutions allow admins to set multiple objectives for each stage to test traders on different aspects such as risk management, profitability, and consistency. Moreover, the option to offer free and paid prop firm challenges adds another layer of flexibility to cater to different types of traders.
2. Intuitive Dashboards
Next, a prop trading tech should have intuitive dashboards that centralize all the important information in one place. That’s because, for prop firms, transparency is vital.
A good dashboard can save teams hours of administrative time so they can focus on strategic decisions and business growth.
The dashboard should show critical metrics such as account performance, balance, passing or failing challenges, and more. Team members must get real-time access to data to manage accounts, track trader progress, and identify issues before they become problems.
Lastly, the dashboard should be scalable, as scalable dashboards help TFFs handle more accounts and challenges without sacrificing performance.
3. Integrations
Seamless integration with a prop firm’s existing tech stack is another important consideration. A prop trading solution should be able to connect to popular trading platforms, liquidity management systems, payment service providers, and customer relationship management solutions. This level of integration is crucial for operational efficiency and for all parts of the system to work together.
Prop trading firms use different trading platforms like MetaTrader 4 and 5 and cTrader. Therefore, the tech should be able to connect these platforms for an uninterrupted experience.
4. Risk Management
Risk management is the foundation of any prop trading firm. A prop trading solution should offer a combination of manual and automated risk management tools so traders can move through challenge phases smoothly and within the firm’s risk parameters.
It should allow admins to set flexible thresholds for closing positions when certain conditions, such as stop loss limits, maximum drawdown levels, or other risk-based metrics, are met. Also, the admins should be able to set accounts to ‘read-only’ status if traders fail to meet specific objectives, so they can’t trade until the issue is resolved.
5. Automation
Automation is no longer a nice to have; it’s a must. A modern prop trading solution should have automation features that streamline all aspects of a firm’s operations, from account setup to challenge management and beyond.
Automation can save time and effort when managing a large number of traders and accounts. For example, automating the process of setting up challenges, monitoring performance, and applying risk management rules can free up resources within a prop firm—less human error, which can be costly in a trading environment.
6. Simple Launch
Last but not least, how easy is it to launch a prop trading firm? A good prop trading solution should have a technology that can get a TFF up and running quickly without any customization or a long implementation process.
A simple launch means the firm can evaluate traders and generate revenue faster. The best solutions provide all the tools and support to get you started—from setting up challenges to managing accounts and integrating with existing systems.
This simple launch is especially important for new firms that need to get up and running fast. But it’s also valuable for established firms looking to scale or enter new markets. Being able to scale with minimal hassle means companies can focus on growth and profitability rather than getting bogged down in technical details.
Conclusion: The Complete Prop Trading Solution
When choosing a prop trading provider, prop trading firms need to select a solution with all the features we mentioned: unlimited challenges, intuitive dashboards, native integrations, robust risk management, powerful automation, and simple launch. Each of these features is crucial to a prop firm’s ability to operate efficiently, manage risk, and stay competitive in a growing market.
Get all these features in Prop Pulse, an account management solution for prop trading firms. This turnkey solution is for companies using cTrader and MetaTrader 4 and 5. It simplifies prop trading operations, manages risk better, and helps attract top trading talent. Book a demo now to learn more.
FAQs
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What is prop trading?
Prop trading is when a company trades with its own money instead of using clients’ money. If the firm’s trades generate a profit, the firm retains it; if the trades result in a loss, the firm bears the loss. These firms typically evaluate and hire experienced traders, provide them with capital to trade, and allow them to pursue opportunities they identify in the markets.
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How does prop trading work?
A prop trading firm usually looks for talented traders by evaluating them through challenges on demo accounts to see if traders can make money without breaking the firm’s risk rules. Traders who pass these tests get funded with the firm’s capital and can trade real markets.
Once funded, traders aim to grow that capital under strict guidelines, such as daily loss limits or drawdown rules, because the firm is risking its own money. If they’re successful, they share a portion of the profits with the firm. If they fail, they either lose their funded account or have to go back and pass the evaluation again.
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What is a white-label prop trading solution?
A white-label prop trading solution is a fully built, ready-to-go trading platform that a company can brand and run as its own. Instead of spending time and money building software from scratch, firms can utilize a proven platform from a third-party provider, add their branding, and customize it to meet their specific needs.
They can focus on attracting traders and growing their business while the white-label provider handles the technology, data, and tools. It’s a faster, easier, and more cost-effective way to launch a prop trading firm without the usual headaches of platform development.
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What to look for in a prop trading tech provider?
When choosing a prop trading tech provider, you should consider the depth and flexibility of the platform’s features, the ease and security of the onboarding process, the strength of the built-in risk and compliance controls, and the level of ongoing support and training. Also check the company’s pricing structure and scalability, reputation and track record in the prop trading space.
