Forex Prop Firms that allow scalping

Scalping in financial trading is a popular short-term strategy where traders try to make profits bit-by-bit from rapid price movements. As an upside, when using scalping strategies, traders can receive quick profits, minimize their exposure by managing risks and trade sizes, and gain more experience from live charts. However, as a downside, utilizing scalping strategies recure more time than position trading, and smaller time frame charts are more noisy.

When selecting a broker or a prop trading firm, traders need to take into account various factors. Not all brokers are offering optimal conditions for scalping. To utilize scalping strategies professionally, it is important to find a broker with high execution speeds and low spreads. It’s worth mentioning that in general, scalping is legal, but brokers might have specific policies on the matter.

Many proprietary (prop) trading firms not only allow but also promote scaling, providing traders with generous leverage and advanced technology that supports this trading style.

Understanding Forex Prop Firms

Forex proprietary (Prop) firms are entities that conduct trading using their own capital rather than money received from their clients. FX prop firms are specialized in foreign exchange market.

Prop firms hire professional traders and beginners to find talented individuals that can make money on the market. They provide traders with training, technology, and capital for trading activities. And when profits are generated, the money is split between the company and traders. Each prop firm has its own ratio and profit split system. Prop firms main goal is to make money and limit risks in the process.

Top Forex Prop Firms for Scalping

Let’s explore some of the leading prop firms that empower their clients to employ scalping strategies.

E8 FUNDING

Established in 2021, E8 Funding, is a newcomer to the prop trading scene. The company is based in Dallas, Illinois. E8 Funding offers traders three account types and a three-phase onboarding program. After completion of all three-phases, traders can access funding up to $300,000, with the possibility of scaling up to $1 million.

Funded accounts start at $25,000 with E8 Funding firm, and a maximum drawdown limitation is 8%. Although the safety features provided are somewhat basic, the firm compensates with a diverse range of available assets and an easy to use trading platform.

E8 Funding supports a full set of MetaTrader platforms. MetaTrader 4 (MT4), and MetaTrader 5 (MT5). In addition to the desktop versions of the platform, mobile and web trading software is also available. Traders can use US Dollar, Euro, or British Pound Sterling as an account currency. The prop firm offers access to 5 different asset classes such as stocks as CFDs (Contracts for Difference), indices, commodities, currencies, and crypto currencies. Maximum available leverage is 50:1.

Profit sharing ratio with this prop firm is average. Traders get to keep 80% of their earnings. Maximum trailing drawdown is 8%, and allowed daily loss limit is 5%. There are 3 profit targets: 8% (Phase 1), 5% (Phases 2 and 3).

When it comes to trading fees, E8 Funding charges clients with different fees depending the asset class they’re trading:

• There’s 0.005% commission on FX trades, with no lot limitations
• 0.005% commission on commodities
• Indices are traded free of commissions
• 0.2% commission on crypto trades
• 0.3% commission on stocks as CFDs

Sign up with E8 Funding now

FTMO

Founded in 2015, FTMO stands out as a well-established prop firm with a large pool of customer base. Since its inception, FTMO has earned trust and a good reputation among traders and investors. The company is headquartered in Prague, Czech Republic.

The prop firm provides two funded account types: normal risk and aggressive risk. In order traders to get a funded account from the prop firm, traders are required to successfully complete a challenge that entails specific requirements and limitations.

Normal risk accounts offer 10 – 200,000 USD, while Aggressive risk accounts can get between 10 – 100,000 USD funding. There are no fees for deposits and withdrawals, and most funding methods are instant with the exception of bank wire transfer. Available trading platforms are cTrader, MetaTrader 4, and MetaTrader 5. Spreads and commissions are competitive.

Minimum audition fee is 164 US Dollars. Allowed daily loss is 5% per account. Profit target is 10%. Maximum trailing drawdown is 10%. Traders can use various account currencies with this prop firm. Available account currencies are: USD, EUR, GBP, CAD, CZK, CHF, and AUD. It’s best to pick the currency that you use the most in your daily life, as this way you’ll be able to save money on currency conversions when making deposits and withdrawals to your trading account.

FTMO has one of the best profit sharing ratios in the industry. 90% of the profits goes to the traders and 10% profits remain in the company. Most competitors typically offer 8020 ratios.

Traders can access 5 different funding plans from the prop firm. The amount that you can get depends on the audition fee amount and how well you can pass the challenge to win the account access. The available options are:

• 10,000 USD – 164 USD (or equivalent in EUR, CZK, GBP)
• 25,000 USD – 265 USD
• 50,000 USD – 366 USD
• 100,000 USD – 572 USD
• 200,000 USD – 1,145 USD

Traders are offered up to 100:1 leverage and a diverse class of assets such as Forex pairs, commodities, indices, and cryptos. Spreads start from 0.5 pips on EURUSD pair, and the commission per round turn per traded lot is 3 USD.

Sign up with FTMO now

The 5%ers

Established in 2016 and headquartered in Israel, The 5%ers prop trading firm stands out as a company with great offerings in the market. Clients of this company can get up to 4 million US Dollars funded accounts, while most of the competitors are only offering lower than 1 million USD accounts

Traders are offered 3 different funding plans, and each plan has its one unique terms and conditions:

• The Bootcamp: Bootcamp at the 5%ers uses a three stage challenge system with no set minimum completion time or trade requirements. The provided leverage is 10:1. However, it should be mentioned that traders need to be active for at least once every 14 days. Inactive accounts expire if there was no trade detected during the two weeks period. Copy trading is not allowed and traders are required to use stop loss orders in all their trades. In addition, the payout ratio stands at 75/25%.
• Hyper Growth: there are no time constraints on this plan. Available leverage is up to 30:1. And the profit target is set at 10%, with a limit level at 6%. Traders are allowed to news trade, and the initial payout occurs 14 days after receiving the funded account.
• High Stakes: There are no maximum trading periods and a minimum of 3 profitable trading days are required. Maximum daily loss is 5%, with an overall loss capped at 10%. There is a two step system for traders to receive funded accounts. On the first step the profit target is 8%, and for step two, it’s 5%, increasing to 10% after getting funded. Available maximum leverage is 100:1, and profit split ratio is 80/20, which is average in this industry.

As an upside, the prop firm offers its clients access to a large base of tradable instruments. There are more than 3,000 equities, currency pairs, commodities and indices available for trading. Leverage is different for each asset class and funding plan. The amount varies between 10:1 and 100:1. For trading major currency pairs, traders are allowed to use up to 100:1 leverage.

Minimum audition fee is 39 USD. And there are no fees on deposits and withdrawals. Profit targets and profit sharing ratios vary depending on the funding plan. At Bootcamp, profit sharing ratio is 75/25 and can increase with other plans up to 90/10. Minimum funded amount for traders is 5,000 USD and as mentioned above, can increase to 4 million USD.

Sign up with The 5%ers now

OspreyFX

OspreyFX is a Forex and CFD broker that also offers prop trading services. The company was founded in 2019, and is registered in St Vincent and the Grenadines.

OspreyFX provides a diverse range of asset classes, including options, US and European stocks, commodities, futures, cryptos, indices, and currency pairs.

The funding challenge at OspreyFX presents traders with a three-stage evaluation, allowing them to retain up to 70% generated profits. Both MetaTrader 4 and MetaTrader 5 are available with this broker.

The minimum audition fee is 220 USD, which is refundable. In addition, as a downside, there’s a 25 USD withdrawal fee for bank withdrawals lower than 5,000 USD. The minimum funded amount is 25K USD, and can grow up to 200K USD. Allowed daily loss is 5%. Profit target is 8%. Maximum trailing drawdown is 12%. And the profit split ratio is 70 (trader) / 30 (firm).

Sign up with OspreyFX now

Tips for Successful Scalping with Prop Firms

Scalping is not an easy trading strategy and it requires speedy decision making, discipline, and dedication from traders. In order to find the best prop firm and trade the strategy profitably, there are a couple of things to take into consideration:

• The very first step to make is to learn the prop firm’s policies. Different prop firms can have their own set of rules about scalping methods.
• Select the best prop firm: choose a prop firm that matches your scalping approach. Seek out firms with lowest possible spreads, high leverage and strong technological support for fast and seamless order execution.
• Learn technical analysis: Success in scalping leans on technical analysis. Traders need to learn how to read charts properly, how to spot trends, and utilize technical indicators for quick and informed decisions.
• Learn how to manage your risks professionally: scalping involves quick trades and high leverage, therefore it’s critically important to implement strict risk management strategies. Set stop-loss orders to limit potential losses and manage your capital wisely to withstand unpredictable market fluctuations.
• Stay updated: keep informed about market news and major economic releases that could influence currency prices. Scalping demands swift reactions to market events, and staying informed enhances your capacity to make timely decisions
• Pick highly liquid currency pairs: When scalping, go for currency pairs with high liquidity. These pairs usually have small spreads and more stable prices, lessening the trade costs on your trades.
• Utilize demo accounts to test your scalping strategies: before using real money for your scalping strategies, try them out in a demo account provided for free by the prop firm. This lets you fine-tune and build confidence into your trading system without risking any actual funds.
• Adopt to changing market conditions: Successful scalping requires flexibility. Be ready to adapt your strategies to shifting market conditions. What works in one market conditions, may require tweaking in another market environment, or even fail to produce profits at all. Professional traders reduce the size of their trades, stop trading or move on demo when strategies enter the drawdown phase.
• Continue to educate yourself: stay committed to ongoing learning and improving to keep an edge over other traders and trading firms. The financial markets evolve, and you need to keep evolving.
• Evaluate your performance constantly: regular evaluation of your scalping results is important to keep yourself accountable, create trading discipline, and find weaknesses. Continues assessment sharpens your approach and improves your overall trading effectiveness.

Keep in mind that if you are unable to scalp profitably, there might be two reasons behind. Market conditions or trading instruments might not be fit for scalping, or you as a trader might be lacking skills and knowledge to trade profitably. Keep in mind that there are lots of traders that cannot scalp, and still make a lot of money from utilizing other methods such as swing trading, fundamental trading, position trading, news trading and so on. There are millions of ways to make money in the markets. However, unfortunately, all of the methods are very hard to find. Which is why long term success in the financial industry requires hard work and dedication, similarly to any other career path.

Wrapping Up

To sum it all up, scalping in financial trading is highly popular and many prop trading firms allow and support their traders with technology to scalp profitably. When selecting prop trading firms there’s a couple of things to consider, it’s important to find a broker with good profit split rations, low spreads, access to a range of tradable instruments and professional platforms. Some of the best prop firms that allow scalping are: E8 Funding, FTMO, The 5%ers, and OspreyFX (which is better known as a Forex broker but also provides prop trading services.) When scalping in the financial markets, make sure to learn how to conduct technical analysis, learn the policies of prop firms, stay updated about market developments, manage risks, and pick highly liquid instruments to reduce spreads. It’s also highly important to evaluate your performance and keep learning.

FAQs on Forex Prop Firms that allow scalping