Homepage > Blog > Steps to Becoming a Prop Trader Table of Contents 1. What is a Prop Trader? 2. Evaluation Steps and Required Skills to Become a Pro 3. Points to Note After Passing the Evaluation 4. Differences from Discretionary FX Trading 5. Summary Prop firms are attracting global attention as an environment where skilled traders can "trade with provided capital." Among these, the system of exam-based prop firms, which has been increasingly introduced in Japan in recent years, is gaining notice. Under this system, not everyone is provided with capital unconditionally. Only by first taking on the evaluation process (challenge) and clearing certain criteria are you given the opportunity to manage funds. In this article, we will carefully explain the steps to becoming a prop trader, while also touching upon "what is needed specifically because it's an exam-based prop firm" and the "differences from discretionary FX trading." 1. What is a Prop Trader? A prop trader refers to a trader who receives capital from a prop firm (independent trading company) and uses that capital to trade in the market. By passing the evaluation, you can gain trading experience in a professional environment without risking your own capital, expanding your **chance to earn compensation based on your profits**. 2. Evaluation Steps and Required Skills to Become a Pro In exam-based prop firms, you can become a prop trader who receives capital by following the steps below. 1. Select a firm Check the transparency of the evaluation system, support structure, contract terms, etc. For example, Fundora's Challenge Plan publishes detailed rules and a support structure. Cultural nuances unique to a Japanese-based firm, such as Japanese language support and consideration for time zones, Cultural attentiveness unique to a Japanese firm are also important points. 2. Build a trading strategy The evaluation process often sets clear numerical targets, such as "drawdown suppression" and "profit achievement within a certain period," requiring the design of a risk management-focused strategy that can meet these. 3. Execute the evaluation process (challenge) You will actually trade on a demo account, and your ability to achieve results under the given conditions will be assessed. At this stage, **reproducibility, discipline, and consistency** are strongly demanded. 4. Fund management on a live account After passing, you will enter the actual market with the provided funds. Profits will be distributed based on a profit-sharing model. 5. Attitude of continuous growth Passing the evaluation is not the goal, but the start. An attitude of constantly reviewing and improving your trading in response to market conditions is required. 3. Points to Note After Passing the Evaluation When receiving capital through an exam-based prop firm, it is particularly important to pay attention to the following points. ・Confirmation of contract details It is important to carefully understand the details, such as profit sharing ratio, withdrawal conditions, and handling of losses. ・Firm reliability With many prop firms existing globally, you need to choose carefully from perspectives such as years of operation, withdrawal support, and attentiveness of support. ・Compliance with trading rules For example, violations of rules such as "maximum daily loss" or "position size limit" often result in immediate account suspension even after passing the evaluation, making a disciplined trading approach essential. ・Thorough risk management As someone managing funds, risk control in daily trading is a prerequisite for a professional. ・Confirmation of support structure Especially the availability of Japanese communication and educational resources is a major factor in determining an environment that can be utilized long-term. 4. Differences from Discretionary FX Trading 4-1. What to Be Aware of Specifically with Exam-Based Prop Firms In discretionary FX trading performed by individuals, freedom of methods and styles is permitted, but it tends to remain self-evaluated. Especially in overseas FX, trading with high leverage is possible, while in domestic FX, leverage is restricted compared to overseas, but the freedom of trading is secured. On the other hand, in exam-based prop firms, there is an **evaluation based on clear criteria by a third party**, and it is necessary to achieve both a certain level of results and behavioral discipline. For example, the following points are major differences. Strict management of trading rules (immediate disqualification upon violation) Judgment ability under continuous pressure during the evaluation period Evaluation of trading content from both quantitative and qualitative aspects Such an environment can be said to be a world where a "trustworthy trader" is sought more than a "winning trader." 4-2. Unique Benefits of Prop Firms Gained After Passing After passing the evaluation and receiving capital provision, the following support and environment, unique to a Japanese-based prop firm, are in place. **Opportunity to manage funds up to tens of millions of yen** Profit sharing system based on earnings Opportunities for gradual promotion and expansion of capital allocation based on performance Provision of Japanese language support system and educational resources Many traders consider these systems as factors when evaluating a prop firm during the application process, such as ease of communication with the prop firm and whether they can trade with peace of mind, compared to overseas prop firms that do not offer Japanese support. 5. Summary To become a prop trader utilizing an exam-based prop firm, the ability to understand the evaluation system and continue strategic and disciplined trading is required. Passing the evaluation is merely the starting line. Even after receiving capital provision, the **awareness of continuing to approach with integrity** serves as the foundation for building a professional career. Furthermore, with fully Japanese-supported prop firms, receiving **meticulous support** that leverages the cultural background in terms of learning environment and quality of support is also a benefit. For those who want to test their skills and step up in a fairer environment, an exam-based prop firm will be one of the optimal choices. This article is written by Fundora, a Japanese-based exam-based prop firm, for those aiming to become prop traders, based on many years of trader training experience and market analysis. Related Articles Detailed Explanation of Skills Required for Professional Traders Become a Risk Management Pro! How to Deal with Traders Who Can't Cut Losses
