In recent months, several prominent proprietary trading firms have gone out of business. This wave of closures began when regulatory authorities in the US and Canada froze My Forex Funds, a major player in the industry. Following this, True Forex Funds, Surge Trader, and Skilled Funded Traders all shut down.
In total, at FunderPro we have identified over 50 firms that have ceased operations.
Even firms like The Funded Trader have been deeply impacted. TFT is now back online but was forced to stop operations for several weeks.
These shutdowns have resulted in significant financial losses for hundreds of thousands of traders who were either locked out of accounts they had purchased or never received payouts they had earned.
FunderPro’s Mission: A New Model of Proprietary Trading
At FunderPro, we are dedicated to empowering firms to adopt a new proprietary trading model. We believe this model will prevent closures, ensure payouts for traders, and generate more revenue in the long run.
The Prop Trading Problem: Virtual Trading
Before FunderPro entered the scene, the retail prop trading world operated exclusively on a B-Book and virtual model. This approach has several inherent flaws:
1. No trades placed by funded traders reach the real market, meaning traders never generate real profits.
2. Firms could potentially manipulate the market to make traders fail their challenges.
3. Payouts must be paid with the firm's money, which comes from challenge purchases alone.
This system is clearly broken and unsustainable. If users stop buying challenges or if payout amounts exceed the income from challenge fees, the entire firm collapses.
The FunderPro Solution: Real Funds Prop Trading
When we decided to enter the prop trading space, we sought to address this flawed business model. The logical conclusion was to adopt the A-Book approach: all trades from funded traders are sent to the broker backed by real capital.
Using real capital allows us to transform the three problematic points into strengths:
1. All trades placed by funded traders hit the broker and generate real profits.
2. The firm cannot manipulate trades, increasing trust.
3. Payouts are made from the profits generated by traders. Liquidity for payouts is guaranteedbecause it comes from the market, not from sales.
Our innovative business model aligns the interests of prop firms and traders, creating a synergistic environment that encourages growth on all fronts.
Better-Engineered Challenges, Less Clickbait
Another issue plaguing the industry is the "sell as much as you can" approach, often coupled with the promise of easy money. The reality is that trading requires hard work and time to master, and not everyone will succeed. Just as not everyone can qualify for the Olympics, not everyone is meant to be funded.
Challenges are designed to test a trader's skills; otherwise, they are merely a funnel to collect money. Funding requirements need to be fair but strict to select the best traders. For firms that use FunderPro’s real funds technology, funded traders become a revenue stream, not a liability.
Stricter Challenge rules also mean that the “churn and burn” style of trading that has sent many firms out of business is not an issue any longer.
Complete Service and Fully Owned Technology
At FunderPro, we base our decisions on hard data and trader feedback. This allows us to offer a complete solution that works both as a standalone product and as a hybrid prop/broker setup.
Data Doesn't Lie
Having operated as both a B2B and a B2C provider for two years, we have collected enough data to conclude that running a prop firm backed by real funds is a much more sustainable business model.
While a slightly higher starting capital is needed to cover live account drawdowns, the cost of payouts is eliminated, and the profit split becomes an additional revenue stream.
In-House Technology
We develop all our technology in-house, leveraging insights gained over the past decade of offering fintech solutions.
Our services cover the entire customer journey, eliminating the need for third-party integrations. This reduces costs, which is crucial in the current economic environment, and helps propel the trading community towards a more sustainable future.
Additionally, every update is rolled out to all clients, and our business managers are always available to help you maximize your setup.
If you want to learn more about real funds prop firms, our technology, and how to integrate it into your business for added revenue, book a meeting with our Prop Firm Experts.
