Prop Firms for Swing Traders

Prop firms can attract many different types of traders and can offer them a good opportunity to trade with a sizeable capital without risking the traders' own money. But prop trading is not suitable for every type of trader equally. In particular, swing traders may find it difficult to discover a prop firm that is suitable for them as limitations and restrictions that prop firms tend to have can make longer-term trading unviable. This guide explains why prop trading may be inconvenient for swing traders, what qualifications a prop firm should have to be viable for swing trading, and also provides a list of prop firms that swing traders may find suitable for their style of trading. But first, let us talks about definitions.

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What is prop trading and what are prop firms?

Proprietary firms (or prop firms for short) are firms that give traders access to the firm's capital in exchange for a share of profits that the traders' profits. Traders are considered contractors, not employees, therefore they do not receive a fixed wage, therefore profits they make from trading are their only source of income, at least as the prop firm is concerned. The vast majority of prop firms have an evaluation process that traders have to pass to prove to the firm that they can make consistent profits and to get funded. There is a small number of prop firms that allow bypassing the evaluation stage, but they demand much bigger fees for the exchange. Prop firms also have requirements and limitations for funded traders.

Prop trading is an act of trading with the prop firm's capital, not the traders' own. The advantage here is that it allows traders to get access to much bigger capital than an average trade can muster and to not risk the traders' own money. The drawback is that the prop firms' rules can limit strategies and styles of trading traders can employ. How restrictive those rules are, depends on the specific firm as each firm has its own set of rules.

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Who are swing traders?

Forex traders are often divided into two major categories: day traders and swing traders. Here is a short description of what they are:

• Day trader — tries to catch small price moves during one trading session. Trades on short time frames and prefers to close positions before the session ends. Successful traders typically have a large number of small profits. Usually demands a very large amount of time and attention. It normally uses only technical analysis as the fundamental analysis does not help in such short-term trading.
• Swing trader — holds positions for several days or even weeks, hoping to catch a big move. Successful swing traders typically have a small number of big profits. Is relatively less stressful as it does not require making frequent trades. Swing traders prefer to use technical analysis, though they can supplement it with fundamental analysis, especially if they want to catch a long-term trend.

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What qualities make a prop firm good of bad for swing traders?

As is evident from the description above, swing traders need to have the ability to hold their position open for a relatively long time. The problem is that the rules of many prop firms do not allow this. Some such firms demand to close positions by the weekend, while others can demand to close positions by the end of each trading session. Another frequent requirement is to close positions ahead of some major event, such as a central bank's monetary policy announcement or a release of an important macroeconomic report. Obviously, such limitations prevent holding positions open for a prolonged period, thus prop firms with such rules are unsuitable for swing traders.

The logical conclusion is that for a prop firm to be considered favorable to swing trading it should not have the aforementioned limitations. It should allow holding positions overnight and over the weekend. It should also allow news trading. Additionally, it should not have a restriction on how long a position can remain open as well as a requirement of a minimum number of trades.

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The list of prop firms for swing traders

Here is the list of prop firms that have rules allowing swing trading. The list contains fees, requirements, conditions, and other details about the firms. The conclusion portion for each firm explains how good the firm is for swing traders specifically.

PipFarm

PipFarm is among those proprietary trading firms that welcome swing traders (both long-term and medium-term) with open arms. Their challenge has no effective maximum period (hard capped at 1 year) while their accounts are all swing-friendly.

Funding programs

PipFarm offers seven starting programs:

Funded programs are scaled every 30 days if profit target of 12% is attained.

You choose to pass either a 1-stage challenge as outlined above or divide it into two stages with half the target for each stage. For example, if you choose a 2-stage challenge with $100,000 funding, you have to achieve at least $6,000 profit during the first stage and the same $6,000 during the second stage; everything else remains the same compared with the 1-stage challenge process.

Main conditions

Scaled profit share system

• Rank 0: 0 XP required, 70% profit share.
• Rank 1: 10 XP required, 75% profit share.
• Rank 2: 25 XP required, 80% profit share.
• Rank 3: 50 XP required, 85% profit share.
• Rank 4: 100 XP required, 90% profit share.
• Rank 5: 200 XP required, 95% profit share.

You earn XP by taking and passing challenges, passing verification, receiving payouts, and scaling funding.

PipFarm prop firm parameters

FTMO

The 5%ers

The 5%ers offer three schemes to choose from:

1. Hyper Growth Program with three balance options. All options support up to $4M growth with an extended 10% profit target, 1:30 leverage, no time limit for evaluation, and payout split up to 100%/0% after funding:

2. High-Stakes Challenge — a high-risk high-reward scaling program with 2-step evaluation:

3. 100K Bootcamp — three challenges with 6% profit target, 5% max loss, 1:10 leverage, and no time limit. Stop-loss risking no more than 2% of account balance required in all positions and orders.

Account size/Cost: $20,000/Free; $100,000/$95; $250,000/$225.

City Traders Imperium

City Traders Imperium has three main trading programs: 2-Step Challenge Funding Program, 1-Step Funded Trader Program, and No-Evaluation Funding Program. Besides the number of evaluation steps (or the absence of evaluation in case of the No-Evaluation program), the programs differ in application fees, available account sizes, and scaling plans. The No-Evaluation program also has lower maximum leverage for Forex traders. The company also provides educational courses as well as the option for 1-to-1 mentoring.

1. 2-Step Challenge Funding Program — a program with the cheapest entry fee, the largest possible account size, and the best initial profit split, but also the hardest to get funded:

2. 1-Step Funded Trader Program — a program with a higher entry fee, a smaller maximum account size, and worse initial profit split, but with easier to pass evaluation:

3. No-Evaluation Funding Program — a program with the highest entry fee, the smallest number of available account sizes, worst initial profit split, and smaller leverage for Forex traders, but with immediate funding:

City Traders Imperium has following features regardless of the chose program:

Lux Trading Firm

All traders funded by Lux Trading Firm can potentially grow their account size to $10,000,000. The number of stages it will take as well as the registration fee depends on the starting account size:

Lux Trading Firm also offers Lux Elite Traders packages that can grow their account size to $10,000,000+ and include additional benefits, such as educational videos, one-on-one mentoring, etc. The registration fee depends on the starting account size:

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Final thoughts

Prop firms can be appealing to many different types of traders. But they are especially attractive for swing traders who rely on the size of a profit from each trade due to the low frequency of trades. But rules and limitations imposed by prop firms can make swing trading hard or even impossible. Be certain to check the terms and conditions of a prop firm before attempting to join it as a prop trader. The list above can help you in choosing a prop firm.

If you want to share your opinion, observations, and conclusions, or simply ask questions about prop firms for swing traders, feel free to join a discussion on our forum.