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There are countless ways to make money in the market. Some financial institutions manage investors’ capital, while others use their own funds to profit. Proprietary (prop) trading firms use their own capital and hire talented traders to increase their investments.
Reliance on other traders is always risky. Market conditions can change and profitable traders may lose their edge. Which is why prop firms do their best to create advanced risk management strategies and avoid losses. Prop firms create strict challenges for traders willing to get funded to make sure their traders have what it takes to trade profitably in the markets.
Let’s learn more about prop trading, MetaTrader 5 (MT5) platform, and take a look at the top list of MT5 prop firms that operate in the financial markets.
MetaTrader 5 trading platform
MetaTrader 5 (MT5) was launched in 2010, and quickly gained popularity among both professional and beginner traders. The MT5 is more efficient than its predecessor MetaTrader 4 (MT4), however, it doesn’t mean that MT5 replaces the MT4. Both platforms are in high demand even today. The main difference between the two platforms is that MT4 is for trading currency pairs, and MT5 is a multi asset trading platform.
MT5 is a bit more complex than MT4 and offers more tools, and advanced technology. MetaTrader 5 is a highly reliable platform that supports multiple asset classes, such as FX, futures, stocks, bonds, options, crypto derivatives, commodities, and indices. There are 38 pre-installed trading indicators, haveever, MT5 also has one of the largest markets for custom-made indicators. There are 44 graphic objects, 21 timeframes, 6 pending orders, and advanced tools for market analysis. MT5 is utilized by professional traders all over the world.
Understanding Proprietary Trading
Proprietary trading, commonly known as prop trading, is a trading approach wherein financial institutions or trading firms participate in financial markets using their own capital. Prop traders are participating in all types of markets from currencies and stock to crypto, commodities and indices. The main goal of every prop firm is to make money in the markets. Prop firms hire talented traders and give their own capital for trading. Profits are split based on predetermined ratios. It is common for most prop firms to keep 20% of the profits generated by their traders and leave 80% for the traders. However, profit split ratios are individual and different for each prop firm. Prop firms employ advanced risk management strategies and have strict trader evaluation terms and conditions to make sure that their funds are in safe hands. In addition, typically prop firms put limitations on how much traders can lose per day, and there are also maximum trailing drawdown limitations.
Top Prop firms that offer MetaTrader 5
Many prop firms provide access to MetaTrader 5 trading platform. Let’s take a look at some of the top ones.
FTMO
Headquartered in Prague, Czech Republic, FTMO stands apart from its competitors with great offerings. The prop firm has a large base of customers. There are two funded account types available: normal risk and aggressive risk.
The Normal risk account ranges from 10,000 to 200,000 USD, while aggressive risk accounts can secure funding between 10,000 to 100,000 USD. Deposits and withdrawals are free of any charge. Funding processing is mostly instant except for the bank wire method that typically takes a couple of working days to withdraw funds from a trading account. FTMO offers its traders access to the most popular trading platforms: MetaTrader 4 (MT4), and MetaTrader 5 (MT5). web trading and mobile apps are also available.
The audition fee is 164 USD. Traders can choose one of the following account currencies to open their accounts: USD, EUR, GBP, CAD, CZK, CHF, and AUD. Keep in mind that opening an account in a currency that you use the most can save you fees on currency conversions when making deposits and withdrawals. FTMO offers a remarkable profit-sharing ratio, with 90% going to traders and 10% retained by the company, surpassing the industry standards.
The prop firm offers five different funding plans, ranging from 10,000 to 200,000 USD. Up to 100:1 leverage is provided. Trading fees are reasonable, and start at 0.5 pips on the EUR/USD pair and a commission of 3 USD per round turn per traded lot, FTMO presents an attractive option for traders seeking funding opportunities.
E8 FUNDING
E8 Funding is a prop firm based in Dallas, Illinois, and accepts clients from around the globe. The company was founded in 2021 and quickly gained popularity. There are three account types offered and a three-phase onboarding program. The firm allows traders to access funding up to 300,000 USD after successfully completing all phases, with the potential to scale up to 1 million USD.
Funded accounts start from 25,000 USD. Maximum trailing drawdown with this prop firm is 8%, while daily loss limit is 5%. E8 Funding offers access to five asset classes, including stocks as CFDs (Contracts for Difference), indices, commodities, currency pairs, and crypto assets. Traders are allowed to use up to 50:1 leverage. Profit sharing ratio is 80/20, which is the average ratio in the industry.
The 5%ers
Established in 2016 and headquartered in Israel, The 5%ers prop trading firm stands out with attractive offerings in the market. Clients of this prop firm can get a 1 million US Dollar account which can also be upgraded to 4 million US Dollar. In addition, there are smaller funding plans available.
Traders can pick one of three funding plans offered, each has unique terms and conditions:
- The Bootcamp: Available leverage is 10:1. A three-stage challenge system is in place to evaluate traders, with no set minimum completion tie or trade volume requirements. Traders are required to be active and place at least one trade every 14 days. Inactive accounts will be removed. Copy trading is not allowed on this account and stop loss orders are mandatory. Payout ratio is 75/25%, which is low compared to what other prop firms are offering.
- Hyper Growth: maximum available leverage is 30:1. Similarly to the Bootcamp account, there are no time constraints. Profit target is 10% and a loss limit is 6%.
- High Stakes: There are no maximum trading period requirements, traders need to be profitable for at least 3 days. The maximum allowed daily loss is 5%, and the maximum trailering drawdown is 10%. There is a sto-step evaluation system for traders, with 8% and 5% profit targets on each step. Maximum available leverage on this account is 100:1. And profit sharing ratio is 80/20, which is average in the industry.
OspreyFX
OspreyFX, established in 2019, is one of the few Forex brokers that also offers prop trading services to its clients. The broker is registered in St Vincent and the Grenadines. OspreyFX provides access to a diverse range of tradable instruments such as US and European stocks as CFDs (Contracts for Difference)., commodities, futures, crypto, indices, and currency pairs
OspreyFX’s funding challenge has a three-stage evaluation process, empowering traders to retain up to 70% of their profits. And 30% remains in the company. Traders are offered MetaTrader 4 (MT4), and MetaTrader 5 (MT5) trading platforms and both platforms come with mobile and web trading versions.
Minimum audition fee is 220 USD, which is refundable. Minimum funded account has 25,000 USD on trading balance with potential to scale up to 200,000 USD. traders have 5% daily loss limits, 8% profit targets, and maximum trailing drawdown at 12%. The profit split ratio is at 70/30. Which is quite low compared to competitors. Many prop firms are offering 80/20 or 90/10 profit split rations.
MetaTrader 5’s additional tools and features
In addition to the features of MT5 we’ve already mentioned, it’s worth expanding discussion about some of the platform’s unique characteristics that are also its strongest selling points.
Social trading
MT5 supports social trading and offers copy trading capabilities. Using this feature, beginner traders and investors with limited time can automatically mimic the performance of successful traders. On the other hand, professional traders can become signal providers and earn extra income from selling their services. The social trading platforms enable traders to connect with each other, learn more, exchange ideas and copy trade.
Interactions with other traders is highly useful, especially for the beginners, as beginners need to learn the most to become consistently profitable. Copy trading is a tool for diversification risk for some traders, while others copy trade due to lack of time, since copy trading enables the service users to participate in the financial markets passively.
Depth of Market
MT5 comes with a pre-installed feature called DoM (Depth of Market). This feature is not available on MT4. The DoM displays ongoing buy and sell orders in the market, along with respective values and trade sizes. This transparency allows traders to evaluate the market and make more informed and calculated trading decisions. The information in the DoM window is updated using real-time data, making this tool equally practical and important for both longer term trading and shorter time frame trading. Depth of Market is especially valuable for stock traders as stock markets are centralized and each bid and ask price can influence the price. On the other hand, Forex markets are decentralized and price is created via various exchanges.
Access to large pool of custom-made algorithms
As already mentioned, MT5 was released in 2010, and instantly became popular. And still, the platform is one of the most popular even today. The mass adoption of MT5 and long years in operation has helped create one of the largest pools of trading algorithms.Trading algorithms help traders automate their trading decisions. Trading algorithms of MetaTraders are called Expert Advisors (EA). You can build your own EAs using MQL5 coding language, or purchase them in the MetaMarket. MetaMarket is filled with MT4 and MT5 trading algorithms, however, be noted that MT4 uses a different coding language, MQL4 in particular, and you won’t be able to use trading robots designed for MT4 on MT5 and vice versa.
When purchasing a trading algorithm to automate your trading or add an indicator to your strategy, keep in mind that not all the robots work properly. Some algorithms work great, while others are created by scammers. In addition, algorithms can stop producing results after a certain period of time because market conditions change and trading algorithms are not adoptive, they only do what they’re programmed to do. It’s best to choose your trading algorithms carefully, read the reviews, and make sure that other traders that use the same robots, approve them.
Advanced strategy tester tools
Trading strategies play an important role in successful trading. Strategies help traders structure their trades, and follow their rules to avoid emotional trading. Traders can assess the viability of their strategies by applying them to historic market information. This process enables traders to evaluate their strategies and speculate how the strategy would have performed in diverse market conditions.
It should be noted that market conditions often change and strategies are always in need of fine tuning and upgrading. When trading strategies are technical based, strategy tester tools can test them.
MT5’s strategy tester is more enhanced than what MT4 is offering. The strategy tester tool provides a graphical representation of backtest results, presented via charts and graphs. Traders can manually test their strategies or use automatic testers.
Wrapping Up
To sum it all up, MetaTrader 5 (MT5) is a highly reliable multi-asset trading platform, and many prop trading firms offer MT5 to their clients. MT5 supports social trading, offers Depth of Markets (DoM) feature, provides access to a large pool of custom-made trading algorithms, and advanced strategy tester. Some of the best prop trading firms that offer MT5 are: FTMO, E8 Funding, The 5%ers, and OspreyFX.
