If you have a keen interest in trading and immerse yourself in it every day, you’ve probably wondered how to acquire capital for trading. There are various ways to obtain funds or capital for trading, and if you meet certain conditions, you can easily get started.
In this blog post, we aim to provide an introduction to trading, including important points for acquiring trading capital, and introducing some services that can assist you in this endeavor.
Join us to learn more.
Why is investing and trading attractive?
Trading and investing are becoming increasingly popular worldwide, as they offer the potential for substantial income. Many individuals have earned significant profits by trading in markets like Forex. Some have even made their six-month income in just one week.
Long-term investments in assets like digital currencies have also changed the lives of many
people. These factors make trading and investing highly appealing to those who want to enter this field. However, it’s important to consider the significant risks associated with it. Without proper trading strategies, you may not only fail to make profits but also risk losing your entire capital.
Once you have developed a sound trading strategy and understand the financial markets, you can explore methods for acquiring capital for trading or utilize prop trading services to boost your income.
Key Points for Acquiring Trading Capital
In the past, attracting capital for trading was challenging for individuals. Traders had to independently seek investors, and investors faced difficulties in assessing and offering capital to traders due to the lack of effective evaluation solutions.
Fortunately, with the presence of investment firms and prop trading services, many individuals can now easily enter financial markets such as Forex and enjoy substantial profits.
If you intend to pursue acquiring funds for trading, there are some key points to consider.
Let’s highlight the most important ones.
Get Familiar with Prop Trading Brokers and Financial Markets
Understanding how prop trading brokers, such as Forex brokers or digital currency exchange offices, work can help you secure capital for trading. Some brokers organize campaigns and trading competitions where you can receive capital for your trades.
It’s also advisable to learn about prop trading services that hire traders and provide them with capital. Collaborating with such services can provide valuable information.
Gain Knowledge About Technical and Fundamental Analysis
Platforms that provide capital for trading usually assess your knowledge in this field and present you with tasks and challenges. Therefore, it’s necessary to be familiar with price analysis methods such as technical analysis and fundamental analysis.
Once you secure funding, you can leverage these analysis techniques to execute successful trades and generate substantial income.
Practice Risk Management
Risk management is crucial not only in prop trading but also in all trading methods. Following risk and capital management principles is essential for successful trades.
Setting profit targets, stop-loss levels, and maintaining a risk-to-reward ratio of at least 2 are effective ways to practice risk and capital management.
Have a Defined Trading Strategy
Successful traders in financial markets emphasize the importance of having a clear trading strategy. Constantly changing your strategy will only lead to losses and may result in the suspension of your prop trading account.
Introduction to Prop Trading
If we want to briefly define prop trading, we can say it is a trading method where companies with substantial capital hire professional traders to grow their capital.
In other words, prop trading firms divide their capital into smaller segments and allocate each segment to a trader to facilitate growth. The trader, in return, may receive a percentage of the profits or a fixed salary for their efforts.
Prop trading is the main avenue for raising capital for trading.
In this section, we will explore the prop trading service provided by Prop Trading Propi, where you can receive capital for your trades.
Capital Acquisition for Trading
Propi Platform
You can easily verify your identity on this platform, eliminating concerns and risks related to using tools to bypass sanctions.
In other words, by using this platform, you engage in trading with the Prop Trading method in a highly secure environment. Like other prop trading companies, you can register on the Propi platform, undergo some tests and challenges, and receive capital for trading, initiating your income generation.
Another positive aspect of this platform is the opportunity for free challenges. This means you can use the platform for free to experiment and familiarize yourself before taking on main challenges and trades.
Additionally, Propi allows various payment methods for covering the costs of main challenges, such as payments in Iranian Rials and digital currencies.
Two-Stage Model
Number of Stages: In this model, traders need to pass two challenge stages.
Profit Targets: In each stage, traders have different profit targets; they must achieve an 8% profit in the first stage and a 4% profit in the second stage.
Maximum Daily and Overall Loss: Traders are obligated to adhere to maximum daily and overall loss limits. The maximum daily loss is 5% of the starting balance, and they are allowed an overall loss of 12% compared to the initial balance.
Drawdown Model: The drawdown model is based on equity change, and traders must ensure not to experience a momentary 5% loss from the starting balance.
Time Restriction: This model has a time restriction (unless traders choose the Propi exclusive infrastructure), and traders must be attentive to time.
Profit Withdrawal: The first profit withdrawal is available 30 days after receiving the Propi real account, and subsequent withdrawals can be requested every 14 days.
Profit Split: In this model, the profit split is 80/20.
Fast-Track Model (Jet Jump)
Number of Stages: Traders in this model directly start trading on the real trading account without passing challenge stages.
Profit Targets: Traders must achieve a 10% profit target in each phase. The number of stages and profit targets may vary based on the initial balance, which we will discuss later in this article.
Maximum Daily and Overall Loss: There is no need to adhere to maximum daily loss; traders only need to be mindful of not exceeding an overall loss of 5% of the initial balance.
Drawdown Model: Similar to the two-stage model, traders should avoid momentary 5% losses from the starting balance.
Time Restriction: Traders can trade comfortably without time restrictions.
Profit Withdrawal: Profit withdrawal is available only after 5 days.
Profit Split: In this model, the profit split is 50/50.
Advantages of Prop Trading:
Prop trading offers several advantages when it comes to acquiring capital for trading. Let’s discuss the main ones:
No Capital Loss
In prop trading, the trading capital is not sourced from your own funds. Once you successfully pass the tests of a recognized company in this field, you will be granted capital for trading. Therefore, if you incur losses in your trades, those losses will be borne by the prop trading company, and your original capital will remain intact.
In the worst-case scenario, prop trading companies consider a specific percentage of losses for each trader. If your account reaches this threshold, it will be blocked, and you will no longer have the opportunity to trade.
Higher Income Potential
Your original capital may be insufficient to achieve your income goals. This is where prop trading comes to your aid. If you have determination and good knowledge of trading, you can attract a large capital through prop trading and generate income proportionate to that capital. This opens up the possibility of earning high and substantial profits from trading.
Increased Focus
When trading with your own funds, the fear of incurring losses and losing your capital can affect your state of mind and hinder effective trading. In prop trading, since the trading capital isn’t your own, you can trade with confidence and peace of mind. This can lead to greater success in your trades and, consequently, higher income.
Conclusion
In this article, we have explored methods of acquiring capital for trading and introduced prop trading platforms for this purpose. Prop trading is an ideal choice if you’re seeking to acquire capital for trading. However, it’s important to recognize that engaging in this activity without a solid trading strategy could result in financial losses.
To enhance your understanding of prop trading strategies, we recommend reading our previously published article on this topic.
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