In the high-risk world of financial markets, the popularity of prop trading is rapidly increasing. However, this field is full of challenges, and many find it difficult to succeed here.
According to a recent survey by PipFarm, exclusively obtained by Finance Magnates, this Q3 2024 survey of 459 respondents reveals the current state of prop trading.
PipFarm is a prop firm that provides traders with funding ranging from $5,000 to $300,000.
The survey data shows that while the industry attracts many, only 40% manage to make considerable profits.
- Survey Revelation 1: Most traders start with forex and cryptocurrencies, not prop firms
- Survey Revelation 2: Characteristics prop traders look for when choosing prop firms
- Survey Revelation 3: Prop traders spend an average of over $4,000 on challenges
The survey results only reflect PipFarm's findings from 459 respondents and cannot be considered a universal standard for the prop trading industry. However, they provide initial insights into prop traders' considerations when choosing firms, serving as a reference for future traders and prop firms.
Prop Firm Survey Revelation 1: Most Traders Start with Forex and Cryptocurrencies, Not Prop Firms
The PipFarm customer survey obtained by Finance Magnates shows that those actively using prop firm services have significant characteristics in terms of trading experience and personal background.
The survey found that the vast majority of retail traders (70%) choose forex/CFDs (51%) or cryptocurrencies (19%) when entering the market, with only about 14% entering through prop firms. Others opt for stocks, futures, or other instruments.
James Glyde, founder and CEO of PipFarm, told Finance Magnates: "For years, forex and cryptocurrencies have been in the spotlight as alternative investments and heavily promoted to retail traders. As a result, most traders enter through these channels."
Nearly half of the respondents (45%) trade using both their own funds and funded accounts, with only 14% using solely their own funds and 40% using funded accounts.
This is not surprising, given that the survey was initiated by a company providing funding services.
Prop Firm Survey Revelation 2: Features Prop Traders Look for When Choosing Prop Firms
PipFarm's data shows that the average prop firm client uses services from multiple companies (68%) to increase their chances of success in challenges.
In reality, most limit themselves to operating between two (43%) or at most three companies (31%), with a small number of traders operating across 6-11 prop firms (6%).
The most important factor for retail traders when choosing a prop firm is clear operational rules (79%), meaning transparent rules and simple challenge requirements. Other important factors include fast profit withdrawals (75%).
Glyde states: "Despite the price war among prop firms, what traders really want is clear rules, not low prices or high profit splits. Many companies are starting to refuse payments for technical reasons, such as IP address inconsistencies, KYC differences, hedging, news trading, and vague definitions of consistency targets."
39% of respondents are interested in the appeal of challenge fees and low spreads, while 37% value the company's history of payments to other clients. Less important factors include high profit splits, low challenge difficulty, or how long the company has been established.
Most prop traders dislike trailing drawdowns (54%), consistency rules (53%), or news trading prohibitions (37%) in prop firm products. Other disliked terms include profit caps, risk limits, daily trading limits, and low maximum lot sizes.
For a significant number of respondents (22%-28%), profit caps, trading risk limits, daily trading limits, and excessively low maximum lot sizes are also concerns. Less important factors include low leverage, slippage rules, or martingale strategies.
The survey also shows that prop traders are highly adaptable to changes, with 57% stating they can adapt within a week when platforms change, while 31% need a month.
Glyde states: "This survey shows that most traders can adapt and switch platforms in less than a week. While some are passionate about MetaTrader, not using it doesn't prevent trading, and they're gradually recognizing other better platforms."
Prop Firm Survey Revelation 3: Prop Traders Spend an Average of Over $4,000 on Challenges
According to Finance Magnates data, the average trader invests $4,270 in prop firm challenges, hoping for high returns. However, nearly half of investors have never received a payout, and close to 60% of clients are at a loss.
The proportion of profitable prop traders is 41%, for whom prop trading is a high-risk but high-reward game. PipFarm data shows that respondents invested a total of $1.9 million in challenges, ultimately earning $7.6 million, a total return rate of 300%.
This survey was conducted among approximately 500 active clients of PipFarm.
Reference：Exclusive: Poll Reveals 60% of Prop Firm Clients Lose Funds, Investing $4,300 on Average
