Proprietary trading, often called prop trading, involves trading financial assets using funds provided by a third party. This third party could be investors, a company, a bank, or even an individual. The agreement typically includes sharing profits generated from the trades. The funds provided to the trader can vary from a portion to the entire trading account size.
Similarly, the profit split arrangement can also differ.
Traders engage in prop trading to reduce their own financial risk while still having the chance to profit from a larger trading account than they could afford with their own capital.
The benefits of trading with a prop firm like TraderScale include:
Access to capital: Many traders do not have large amounts of capital to invest when they start trading. With the help of TraderScale, traders can gain access to significant sums of money that they would not otherwise be able to trade
Risk mitigation: The trader does not risk their own capital in the markets when trading with the firm's money. If trades go wrong, the company absorbs the loss.
Profit sharing: A significant portion of the profits (80% or 90%) goes to the trader. This can be an excellent income opportunity for successful traders.
Learning and development: Many of these companies provide educational resources and community support, which can help traders develop their skills and strategies. They also often provide feedback and reports to their traders, helping them improve their trading performance.