Photo by Kanchanara on Unsplash
Negosentro | Ultimate Traders: prop trading firm provides traders with ready-funded accounts, sharing up to 90% of profits | Whilst there’s no such thing as free money, the next best alternative is receiving the opportunity to earn it. Prop trading firms such as Ultimate Traders differ from regular brokers where traders must self-fund and risk their capital. Instead, Ultimate Traders supplies already funded trading accounts (hosted by a regular broker) subject to the agreement that the firm and trader split any profit the trader generates. The standard split is 80/20 (trader/firm) with an option to increase to 90/10. Traders never personally bear any financial risk trading other than the initial fee required to register.
How does Ultimate Traders select which traders to fund?
To become prop traders, individuals must register for an evaluation. The fee for the evaluation is proportional to the account size they wish to receive. For example, to receive a funded trading account of $10,000, the evaluation fee is $99. The registration fee to receive the maximum funding of $400,000 is $1,799. A range of account sizes exists between these two options. No qualifications are required to apply since the point of the evaluation is for traders to practically demonstrate their ability under the monitoring of the prop firm. Those who successfully complete the evaluation receive prop trading funds. Those who do not are allowed to re-apply.
What does the evaluation involve?
The primary objective of the evaluation is to profitably trade on a simulated account up to the stated profit target. This must be done over a minimum of 3 trading days. In conjunction with this, the trader must demonstrate reasonable risk management skills by not incurring losses that exceed the permitted daily and all-time drawdown limits. The simulated account balance is equal to the real funded account granted if they pass. Ultimate Traders gives the choice of a 2-phase and 1-phase evaluation to achieve these objectives:
2-phase evaluation (The Classic Challenge)
The profit target is initially 10% of the starting balance with the all-time loss limit at 12% and the daily loss limit at 6% of the day’s starting equity. Once this has been achieved, the account balance is reset and the same steps must be repeated, with the profit target reduced to 5%. If the second phase is also met with success, the trader receives the funded trading account.
1-phase evaluation (The Speedy Challenge)
The profit target is again 10% of the starting balance with the all-time loss limit at 6% and the daily loss limit at 4% of the day’s starting equity. If met with success, the trader receives the funded trading account without having to repeat the steps. This fast track to funding is justified by the stricter drawdown rules.
The Ultimate Traders account
The traders who progress to the funded stage must verify themselves by submitting the usual KYC documentation (proof of identity and residence) as well as signing the prop trading agreement. Once verified, prop trading begins. Profit targets as well as minimum trading days are no longer required, traders can operate at their discretion. The same daily drawdown limits remain in place however the max loss is removed once the limit trails up sufficiently to equal the account starting balance (in other words the trader must only ensure their equity never falls below the starting balance). Unless the drawdown rules are breached, the traders may continue to trade and withdraw their monthly share of profits indefinitely.
Trading policies, conditions, and add-ons
There are very few limitations to the strategies traders are allowed to employ. Scalping, hedging, news trading, swing trading, and even the use of EAs are permitted. The accounts are hosted by the broker T4Trade, running on the same live MT4 servers provided to their retail traders. The available instruments include currency pairs, commodities, indices, and cryptos. The Classic Challenge permits max forex leverage of 1:100 with The Speedy Challenge allowing 1:30.
Traders are required to place a stop-loss on every trade and close all positions before the weekend (failure to do so would not count as a hard breach of the account but the positions would either not open or be automatically closed). However, traders who wish to bypass these rules can make use of the “weekend holdings and/or “no-stop” loss add-ons. This is mostly useful for swing and news trading strategies since they frequently involve keeping positions open during the weekend and riding out volatility. These two add-ons can each be obtained for a 10% premium on the initial registration fee. The third and most popular add-on is the “90% profit share” which guarantees a 90/10 split agreement in favor of the trader. This add-on costs 20% or the bundle of all three can be selected for 30%.
Summary
Prop trading with a firm such as Ultimate Traders is a useful alternative to consider. The main benefit is the opportunity to operate using account funds that would otherwise be too large to risk. It would simply be a question for the trader to decide if they are confident in passing the evaluation.
Photo by Kanchanara on Unsplash
