Home > Blog > Skills Required to Become a Professional Trader at an Evaluation-Based Prop Firm Table of Contents 1. Basic Knowledge of Evaluation-Based and Traditional Prop Firms 2. Differences Between Evaluation-Based and Self-Capital (Traditional) Prop Firms 3. Skills Required to Become a Professional Trader at an Evaluation-Based Prop Firm 4. Awareness and Considerations After Passing Evaluation 5. Differences from Discretionary FX Trading 6. Summary 1. Basic Knowledge of Evaluation-Based and Self-Capital Prop Traders Traditional self-capital proprietary trading firms (Proprietary Trading Firms) are professional institutions that trade using the company’s own funds. Traders belonging to these firms are called “prop traders,” and their key feature is the ability to gain trading experience without risking their personal capital. While this model has primarily developed in Europe and the United States, in recent years, “evaluation-based prop firms” have spread in Japan as well, introducing fair evaluation systems that anyone can attempt. 2. Differences Between Evaluation-Based and Self-Capital Prop Firms Prop firms can be broadly divided into two categories: “evaluation-based” and “self-capital.” Their mechanisms are as follows: Category Evaluation-Based Prop Firm Self-Capital Prop Firm Funding Conditions Provided only to traders who pass the challenge (evaluation) Funds immediately provided based on recruitment screening or experience Evaluation Method Meeting specific criteria in a demo environment is mandatory Traders begin live trading immediately under internal rules Entry Difficulty Anyone can attempt. Passing criteria are clearly numerical Often limited to experienced or proven traders Advantages Fair standards, Japanese language support, and educational resources available Immediate real-world experience, potential for high rewards Considerations Rule violations result in immediate disqualification; long-term discipline required Requires risk management awareness similar to managing personal funds In particular, in Japan, evaluation-based prop firms have begun to spread, attracting attention for providing opportunities even to beginners. 3. Skills Required to Become a Professional Trader at an Evaluation-Based Prop Firm To receive funding at an evaluation-based prop firm, the following steps are required: Firm Selection: Check support systems and evaluation rules. Companies like Fundora, which provide strong Japanese-language support, offer greater reassurance. Strategy Development: Prepare risk-focused trading strategies to meet drawdown limits and profit targets. Challenge Evaluation: Demonstrate disciplined trading by meeting requirements in a demo account. Funding Begins: After passing, trade with real funds and receive profit shares. Continuous Growth: Maintain discipline even after passing, and continuously adapt strategies to market conditions. 4. Awareness and Considerations After Passing Evaluation Understand Contract Terms: Be aware of profit-sharing ratios and withdrawal rules. Disciplined Trading: Strictly follow rules on position size and loss limits. Thorough Risk Management: As you are managing provided capital, maintaining composure in every trade is essential. Use Support Resources: Utilize educational resources and mentoring to foster long-term growth. 5. Differences from Discretionary FX Trading In personal discretionary FX, traders enjoy freedom in trading style but often remain self-taught, which can hinder discipline. Evaluation-based prop firms differ in the following ways: Objective standards based on third-party evaluation Clear evaluation rules specifying profit targets and loss limits Emphasis on discipline, reproducibility, and consistency This creates an environment where traders are valued not just as “profitable traders” but as “trustworthy traders.” 6. Summary Evaluation-based prop firms provide a fair system that allows even beginners to challenge themselves, offering opportunities to build a professional trading career through disciplined trading. Compared with self-capital firms, they offer higher accessibility in terms of education and support. Firms like Fundora, originating from Japan, provide additional strengths by leveraging cultural understanding in their support systems.
