How Do Prop Firms Work? Ultimate Guide to Get Started

Are you a skilled trader looking to access larger capital without risking your own money? Understanding how prop firms work is essential for traders seeking to elevate their careers in the futures markets. At Phidias Propfirm, we provide traders with the opportunity to access up to $1 million in funding while benefiting from some of the best trading conditions in the industry.

This comprehensive guide will walk you through everything you need to know about proprietary trading firms, from evaluation processes to profit sharing, with a specific focus on how we at Phidias Propfirm are redefining standards in the prop trading industry.

TL;DR: How Do Prop Firms Work?

Prop firms like Phidias Propfirm provide trading capital to skilled traders, allowing them to generate substantial profits without risking their own money.

Here’s how they work in a nutshell:

1. Evaluation Process: Traders must first pass a challenge by reaching a profit target (like $4,000 on a $50K account) while respecting maximum loss limits and trading rules.
2. Funded Trading: Successful traders receive access to the firm’s capital (ranging from $25K to $100K+ per account) to trade futures markets like indices, currencies, and commodities.
3. Profit Sharing: When traders generate profits, they keep the majority (typically 80%) while the prop firm takes a percentage (typically 20%) as their revenue.
4. Rules and Requirements: Traders must follow specific guidelines on drawdown limits, position sizing, and trading consistency to maintain their funded accounts.
5. Scaling Opportunity: Consistent performers can manage multiple accounts (up to 15 at Phidias) and eventually access a LIVE account with daily, unrestricted payouts.

This model creates a win-win scenario: traders gain access to substantial capital with limited personal risk, while prop firms profit from the skilled traders they identify through their evaluation process.

What Is a Proprietary Trading Firm?

A proprietary trading firm (prop firm) is a company that provides capital to traders to trade financial markets, particularly futures markets or Forex Trading. Unlike traditional investment firms that trade client funds, prop firms use their own capital or simulated capital to fund traders. In return, the prop traders share a percentage of the profits they generate with the firm.

The concept of prop trading has evolved significantly over the years. Traditionally, prop trading was conducted within large investment banks where traders would use the bank’s capital to make speculative trades on Stock Market, Forex or Futures. However, after regulatory changes following the 2008 financial crisis, standalone prop firms emerged, creating new opportunities for retail traders to access institutional-level funding.

At Phidias Propfirm, we’ve taken this model further by creating a system that allows talented traders to sculpt their trading success through our carefully designed evaluation and funding process. Our name draws inspiration from the ancient sculptor Phidias, as we help shape the careers of promising traders in the futures markets.

How The Prop firm Business Model Work ?

Understanding how prop firms make money is crucial before you decide to join one. At Phidias, our business model is transparent and designed to align our interests with those of our traders.

Revenue Streams for Prop Firms

Prop firms typically generate revenue through several channels:

1. Profit sharing – The primary revenue source comes from sharing profits with funded traders
2. Evaluation fees – Some firms charge upfront fees for traders to attempt their evaluation process
3. Subscription fees – Monthly or recurring fees for access to trading platforms and tools

At Phidias Propfirm, we believe in a fair and transparent approach. While we do have evaluation fees for our challenge programs, our main focus is on the success of our traders. The more our traders earn, the more we earn together through our profit-sharing arrangement.

The Evaluation and Funding Process

Our evaluation process is designed to identify traders who demonstrate consistent profitability while adhering to proper risk management principles. Unlike some competitors, we offer various account types to match different trading styles, allowing traders to choose the option that best suits their approach.

The typical journey of a trader at Phidias Propfirm follows this path:

1. Registration – Choose your account size and trading style
2. Evaluation – Demonstrate your trading skills by meeting profit targets without exceeding maximum loss limits
3. CASH account – Upon successful evaluation, receive a funded account with profit-sharing
4. LIVE account – After consistent performance, access live funding with enhanced conditions

This structured approach ensures we only fund traders with proven abilities while providing a clear pathway to professional trading success.

Types of Trading Accounts at Phidias Propfirm

At Phidias Propfirm, we understand that different traders have different styles and needs. That’s why we offer a variety of account types to accommodate various trading approaches.

Fundamental Accounts

Our Fundamental accounts are designed for traders who focus primarily on intraday trading. These accounts come with specific features:

• No overnight positions allowed
• Trading during specific hours (11:00 PM – 9:59 PM UTC)
• Available in sizes from $50K to $100K
• Maximum drawdown calculated at end of day (EOD)

These accounts are perfect for traders who prefer to close all positions before the end of each trading day and focus on capturing intraday price movements in the futures markets.

Swing Accounts

For traders who prefer to hold positions for longer periods, our Swing accounts offer the flexibility to capitalize on multi-day market movements:

• Overnight and overweek positions allowed
• Hold trades through market closes
• Available in sizes from $50K to $100K
• Trailing drawdown calculated at EOD

Swing trading accounts have become increasingly popular as they align with many traders’ preferred styles, allowing them to capture larger market moves without the pressure of closing positions daily.

Static Accounts

Our 25K Static accounts offer a simplified route to funding:

• $25K initial account size
• Static drawdown of $500 (non-trailing)
• Profit target of $1,500
• Immediate pathway to a LIVE account after reaching targets
• No consistency rules or minimum trading days

These accounts are perfect for traders looking for a straightforward evaluation with clear parameters and rapid progression to funded trading.

10K Drawdown Accounts

Our unique 10K Drawdown challenge offers a competitive approach to gaining funding:

• Join a pool of traders competing for funding
• Winner receives a LIVE 10K Drawdown account
• Additional prizes for top performers
• No trailing drawdown, static $10,000 account
• Ability to request withdrawals from day one on the funded account

This challenge format creates an exciting opportunity for traders to showcase their skills while competing for immediate funding access.

How Evaluation Process Work ?

The evaluation process is the gateway to receiving funding from a prop firm. At Phidias Propfirm, we’ve designed our evaluation to be challenging yet fair, testing traders’ abilities to generate profits while managing risk appropriately.

Challenge Requirements

Our evaluation accounts have specific requirements that traders must meet:

• Reach the profit target without breaching maximum loss limits
• Trade for a minimum of 3 trading days (except for Static accounts)
• Maintain consistency with no single day exceeding 30% of total profits
• Follow all trading rules specific to your account type

For example, our $50K Fundamental account has a profit target of $4,000 with a maximum drawdown of $2,500 calculated at the end of each trading day.

Managing Drawdown Limits

One of the most critical aspects of our evaluation is drawdown management. At Phidias, we use an EOD trailing drawdown system for most account types:

• Drawdown is calculated at the end of each trading day
• As you make profits, the drawdown limit adjusts upward
• If your balance reaches the drawdown limit during trading, the account will be liquidated

This system rewards successful traders by providing more protection as their account grows while maintaining strict risk parameters.

Tips for Passing the Evaluation

Based on the success of our thousands of traders, here are some key strategies for passing the Phidias evaluation:

• Focus on consistent profitability rather than hitting the target quickly
• Keep position sizes reasonable to avoid unnecessary risk
• Develop a clear trading plan before starting the evaluation
• Track your metrics daily to ensure you stay within parameters
• Understand the specific rules of your chosen challenge account type

Remember, the prop firm evaluation is not just about making profits—it’s about demonstrating you can trade in a disciplined and consistent manner.

How Funded Accounts Work ?

Once you successfully complete the evaluation, you’ll receive a Funded account (Cash), which is where you’ll begin earning real payouts from your trading.

Cash Accounts vs. LIVE Accounts

At Phidias Propfirm, we offer a clear progression from Sim Funded to LIVE accounts:

CASH Accounts:

• Require payment of activation fees (monthly or lifetime options)
• Follow the same parameters as your evaluation account
• Allow you to earn regular payouts subject to certain conditions
• Can be scaled up as you demonstrate consistent performance

LIVE Accounts:

• Available after 3 payouts with one account or $75,000 in cumulative payouts
• Offer daily payouts with no restrictions
• Enhanced trading conditions
• Direct connection to our partner broker

This structured approach allows profitable traders to build their track record and gradually access improved conditions as they prove their abilities.

Scaling to Larger Account Sizes

One of the most attractive features of trading with Phidias Propfirm is the ability to scale up your capital. We allow traders to manage up to:

• 5 CASH Fundamental accounts
• 5 CASH Swing accounts
• 5 25K Static accounts
• 1 10K Drawdown LIVE account

This means a successful trader can effectively manage up to $1 million in prop firm funding, creating substantial earning potential through profit sharing.

How Profit Sharing and Payouts Work ?

The ultimate goal of trading with a prop firm is to generate consistent profits and receive regular payouts. At Phidias Propfirm, we’ve designed a transparent profit-sharing model that rewards successful traders.

How Profit Sharing Works

Our profit-sharing arrangement is straightforward:

• Traders receive 80% of profits generated
• Phidias retains 20% of profits
• Payouts are processed quickly via Rise, our payment providers

This 80/20 split is competitive in the industry and allows traders to keep the majority of what they earn while we cover the operational costs and risk of providing capital.

Payout Requirements and Schedules

To request a payout from your funded account, you’ll need to meet certain criteria:

• Wait a minimum of 10 trading days between payout requests (for the first three withdrawals)
• Maintain minimum account balances after withdrawal
• Request withdrawals between the 20th and 25th of the month for end-of-month payment

For example, on a $50K account, you can withdraw up to $2,000 per payment period during your first three withdrawals, and your account balance must remain above $50,100 after the withdrawal.

Path to Daily Payouts

One of the most exciting aspects of our model is the pathway to daily payouts:

1. Successfully manage funded accounts
2. Reach either 3 payouts with one account or $75,000 in cumulative payouts
3. Transition to a LIVE Funded account with our partner broker
4. Access daily payouts with no restrictions or limits

This progression provides traders with the opportunity to turn their trading skill into a reliable income stream with maximum flexibility.

What Are Prop Firm Trading Rules

Understanding the trading rules at Phidias Propfirm is essential for maintaining your funded account and maximizing your earning potential.

Risk Management Requirements

We emphasize proper risk management to protect both the trader and the firm:

• Adhere to maximum EOD drawdown limits for your account type
• Follow the 30% consistency rule (no single day’s profit can exceed 30% of total profit)
• Use appropriate position sizing based on account type
• Avoid gambling-style trading behaviors

These guidelines ensure sustainable trading practices that lead to long-term success.

Trading Hours and Position Management

Depending on your account type, different rules apply regarding trading hours and position management:

Fundamental Accounts:

• Trade during CME Globex hours (11:00 PM – 9:59 PM UTC)
• Close all positions before the end of each trading day
• No overnight or weekend positions allowed

Swing Accounts:

• Freedom to hold positions overnight and over weekends
• No specific trading hour restrictions
• Position size limits apply for overnight holdings

These rules are designed to accommodate different trading styles while maintaining appropriate risk management.

Position Size Limits

We provide clear guidelines on the maximum trade position size you can trade:

• $50K accounts: 10 mini contracts (100 micros)
• $100K accounts: Proportionally higher limits
• 25K Static accounts: 2 mini contracts (20 micros)
• 10K Drawdown accounts: 2 E-mini lots with scaling opportunities

Following these position limits is crucial for maintaining your funded account and avoiding disqualification.

Benefits of Trading with Phidias Propfirm

Trading with a prop firm offers numerous advantages over trading solely with your personal capital. At Phidias Propfirm, we’ve designed our program to maximize these benefits.

Access to Substantial Capital

Perhaps the most obvious benefit is access to significant trading capital:

• Trade with up to $1 million in funding with combined account sizes
• Scale your positions beyond what would be possible with personal capital
• Generate larger absolute returns through increased position sizes

This trading capital access allows talented traders to truly capitalize on their skills without the limitations of small personal accounts.

Limited Personal Risk

Unlike trading your own capital, working with a prop firm significantly reduces your personal financial risk:

• No risk of losing your life savings
• The firm absorbs trading losses (within defined parameters)
• Psychologically easier to follow your trading plan without the stress of personal financial loss

This reduced risk allows traders to focus on execution rather than worrying about potential financial hardship.

Support and Community

At Phidias Propfirm, we believe in providing comprehensive support to our traders:

• 24/7 support available to answer questions and resolve issues
• Multilingual support in English, French, and Spanish
• Access to professional trading platforms and data feeds
• Join a community of over 10,000 traders

This support structure helps traders overcome challenges and continue developing their skills in a supportive environment.

Pathway to Professional Trading

For many, trading with Phidias Propfirm represents a pathway to a professional trading career:

• Build a verified track record of profitable trading
• Develop the discipline and consistency required for professional trading
• Create a reliable income stream through regular payouts
• Eventually transition to managing larger amounts of capital

Prop Firms work by allowing talented traders to turn their skills into a sustainable career.

How to Get Started with Phidias Propfirm

Ready to begin your journey with Phidias Propfirm? Here’s how to get started:

1. Choose Your Account Type

2. Set Up Your Trading Platform

Once registered, you’ll receive your RITHMIC identifiers to access our trading infrastructure:

• Choose your preferred trading platform (Rithmic-compatible)
• Set up your market data connections
• Configure your charts and indicators
• Familiarize yourself with the platform before beginning real trading

We support a variety of popular trading platforms to accommodate different trader preferences.

3. Begin Your Evaluation

With everything set up, you’re ready to start trading:

• Review all rules specific to your account type
• Develop a clear trading plan that aligns with our guidelines
• Start trading with proper risk management
• Track your performance against evaluation targets

Remember, the evaluation is designed to identify traders who can generate consistent profits while managing risk appropriately.

Common Questions About Prop Firms

What instruments can I trade at Phidias Propfirm?

At Phidias Propfirm, you can trade a wide range of futures instruments across various markets:

• Stock indices: ES, NQ, YM, RTY, and their micro equivalents
• Interest rates: ZT, ZF, ZN, ZB, UB
• Currencies and cryptocurrencies: 6A, 6B, 6C, 6E, 6J, Bitcoin, Ethereum
• Energy: CL, QM, GN, QG, HO, RB
• Metals: GC, SI, HG, PL, PA, MGC
• Agricultural: HE, LE, GF, ZW, ZS

This diverse selection allows traders to focus on the markets they understand best.

Is news trading allowed?

Yes, news trading is allowed on all account types at Phidias Propfirm. Unlike some competitors who restrict trading during economic announcements, we believe traders should have the freedom to capitalize on all market opportunities.

How many accounts can I have?

At Phidias Propfirm, traders can manage:

• 5 CASH Fundamental accounts
• 5 CASH Swing accounts
• 5 25K Static accounts
• 1 10K Drawdown LIVE account

This allows for a total of up to 16 funded accounts, providing significant capital access and diversification across trading styles.

What happens if I fail the evaluation?

If you don’t meet the evaluation requirements, you have options:

• Purchase a reset and start a new evaluation immediately
• Wait 30 days for an automatic account reset
• Try a different account type that might better match your trading style

We understand that even skilled traders can have challenging periods, which is why we provide multiple opportunities to succeed.

Can I use automated trading systems?

At Phidias Propfirm, we allow semi-automated trading systems where the trader actively monitors and manually adjusts trades. Fully automated systems and high-frequency trading algorithms are not permitted.

Are Prop Firms Legal ?

Yes legitimate and well structured Prop Firms like Phidias are legal in most countries. You can read our dedicated article : Are Prop Firms Legal ? The New Regulation Coming

Conclusion: Sculpt Your Trading Success with Phidias Propfirm

Understanding how prop firms work is essential for traders looking to elevate their careers beyond the limitations of personal capital. At Phidias Propfirm, we’ve created a model that provides talented traders with access to significant capital while offering the support and structure needed for long-term success.

With multiple account types designed to accommodate different trading styles, a clear pathway from evaluation to daily payouts, and a supportive community of over 10,000 traders, Phidias Propfirm stands apart in the prop firm industry.

Whether you’re an experienced trader looking to scale up your operations or a skilled newcomer seeking to prove your abilities, our platform offers the opportunity to sculpt your trading success in the futures markets.

Join the Phidias Propfirm family today and take the first step toward transforming your trading skills into a professional career with substantial earning potential.