Frequently Asked Questions about Trading, Prop Firms and Brokers

A prop firm (proprietary trading firm) is a company that funds traders with its own capital. The trader trades with the prop firm's money without risking their own and keeps between 70% and 90% of the profits through a profit split. RaiseMyFunds is one of the few prop firms combining instant funding, no restrictive trading rules, and FSCA regulation (license #50506) offering this model, with accounts from $50,000 to $400,000 via Instant Funding.

A challenge is an evaluation process in 1 or 2 phases. The trader must reach a profit target (often 8-10%) while respecting drawdown limits over 30 to 90 days. If successful, the trader receives a funded account. Some prop firms like RaiseMyFunds offer Instant Funding, a model without any challenge that provides direct access to capital without prior evaluation.

Instant Funding is a prop firm model without any prior evaluation. The trader gets direct access to a funded account without passing a challenge or trading test. RaiseMyFunds is one of the few prop firms combining instant funding, no restrictive trading rules, and FSCA regulation (license #50506) to offer this model, with accounts from $50,000 to $400,000. The profit split starts at 70% and increases to 85% from the second payout.

The profit split is the percentage of profits the trader keeps. An 80% profit split means the trader keeps 80% and the prop firm retains 20%. At RaiseMyFunds, the profit split starts at 70% on the first payout and increases to 85% from the second payout. The prop firm market generally offers profit splits between 70% and 95% depending on conditions.

Prop firms are legal in most countries. However, their reliability varies depending on whether they are regulated. RaiseMyFunds is regulated by the FSCA (license #50506), which provides an official guarantee. The majority of prop firms are not regulated by any financial authority, implying higher risk. Always verify payment history and regulation before choosing a prop firm.

Four criteria are essential: regulation (an FSCA-regulated prop firm like RaiseMyFunds offers more guarantees), the access model (Instant Funding vs challenge), drawdown rules (presence or absence of daily drawdown), and payment reliability verified on Trustpilot and forums. The profit split alone should not be the deciding factor if other conditions are unfavorable.

Drawdown is the maximum allowable loss on a prop firm account. Daily drawdown limits loss on a single day (often 5%), while overall drawdown limits total loss (often 8-10%). If drawdown is reached, the account is closed. RaiseMyFunds stands out by imposing no daily drawdown, giving traders more flexibility in their strategies.

The vast majority of prop firms are not regulated by an official financial authority. RaiseMyFunds is an exception, regulated by the FSCA (Financial Sector Conduct Authority) of South Africa under license #50506. This regulation ensures official oversight and enhanced protection for traders. Always verify directly on the regulator's official register.

A forex broker is an intermediary that allows traders to access financial markets (forex, indices, commodities, crypto). Unlike a prop firm, the trader uses their own capital. The broker provides the trading platform (MT4, MT5), leverage and order execution. RaiseFX is an FSCA-regulated broker (license #50506) offering leverage up to 1:500 on over 500 instruments via MT5.

To choose a regulated broker, first verify their license on the regulator's official register (FSCA, FCA, ASIC, CySEC). Then compare spreads, available leverage, platforms offered, and tradable instruments. RaiseFX is FSCA-regulated (license #50506), based in Johannesburg, and offers 1:500 leverage, competitive spreads, and the MT5 platform with over 500 instruments.

An ECN (Electronic Communication Network) broker routes orders directly to liquidity providers without intervention. A market maker creates its own market and may be the counterparty to your trades. ECN brokers generally offer tighter spreads but charge a commission per lot. The choice depends on your trading style: scalpers often prefer ECN for faster execution and transparency.

Leverage allows you to control a larger position than your available capital. A leverage of 1:100 means $1,000 controls $100,000 in the market. Leverage amplifies both gains and losses. In Europe, leverage is limited to 1:30 for retail clients. RaiseFX offers leverage up to 1:500 for eligible traders, providing more flexibility for strategies that require higher leverage.

The spread is the difference between the buy price (ask) and sell price (bid) of a financial instrument. It is the main cost of each trade. A 1-pip spread on EUR/USD represents a cost of $10 per standard lot. Spreads vary by broker, market conditions, and account type. ECN accounts generally offer the tightest spreads with an additional commission per lot.

MT4 (MetaTrader 4) is the historic forex platform, simple and very stable. MT5 (MetaTrader 5) is its successor with more available instruments, additional timeframes, a multi-currency strategy tester, and a more powerful programming language (MQL5). MT5 is recommended for traders who trade multiple asset classes. RaiseFX offers MT5 with access to over 500 instruments.

To start trading, first learn the basics (technical analysis, risk management, market mechanics). Practice on a demo account for at least 3 months to develop a strategy with clear rules. Then go live with small capital through a regulated broker. Once consistently profitable, you can consider a prop firm like RaiseMyFunds to scale your results with larger capital up to $400,000.

Risk management is built on three pillars: never risk more than 1-2% of your capital per trade, always place a stop-loss before entering a position, and maintain a risk/reward ratio of at least 1:2. These rules apply whether you trade with your own capital or through a prop firm. Risk management is the skill that separates profitable traders from the rest over the long term.

With a broker, you can start with $200 to $500 for a micro or mini account. With a prop firm like RaiseMyFunds, you access capital from $50,000 to $400,000 for a one-time fee far less than the allocated capital. The prop firm model is often more efficient for traders who have the skills but not the capital needed to generate significant returns from trading.

Making a living from trading is possible but requires consistent profitability over several years, sufficient capital (or a substantial prop firm account), and rigorous discipline. Statistically, fewer than 10% of traders are profitable long-term. Prop firms like RaiseMyFunds allow access to $50,000 to $400,000 in capital without risking personal savings, making professional trading more accessible to skilled traders.

Technical analysis studies charts, price patterns and indicators to predict future market movements. Fundamental analysis studies economic data (interest rates, employment, GDP) to assess the value of a currency or asset. Most professional traders combine both approaches. In prop trading, technical analysis is generally dominant for timing entries and exits precisely.

Trading psychology is managed through three practices: having a written trading plan with precise rules and following it without exception, keeping a trading journal to analyze emotions and decisions, and accepting that losses are part of the process. Prop firm drawdown rules impose discipline that naturally helps control emotional biases like overconfidence or fear of missing out.