How to Choose a Prop Firm: 7 Essential Criteria in 2026

Criterion 1: Financial regulation

Regulation is the most important criterion when choosing a prop firm. It is your first line of defense against scams and abusive practices. A regulated prop firm is subject to strict legal obligations that directly protect the trader.

What regulation guarantees:

• An official legal framework with recourse in case of disputes
• Minimum capital requirements to guarantee solvency
• Regular financial reporting audited by an independent body
• Inability to unilaterally change conditions without notice

RaiseMyFunds is one of the few prop firms to hold an official financial license: FSCA licence #50506, issued by the Financial Sector Conduct Authority of South Africa. The FSCA is comparable to other internationally recognized regulators like the FCA (United Kingdom) or ASIC (Australia).

Over 60% of currently active prop firms hold no financial regulation. This is not illegal in itself, but it means the trader has no specific legal protection if the company refuses a payout or shuts down operations. When you trade with an unregulated prop firm, you are essentially trusting a private company with no legal obligation to pay you.

Criterion 2: Profit split

The profit split determines what percentage of generated profits you keep. This is a crucial criterion that directly impacts your profitability. In 2026, market profit splits range from 50% to 95%.

Ranges to know:

• 50-70%: Below market average. Only acceptable if other conditions are exceptional (no drawdown, instant funding, full regulation).
• 70-85%: Market standard for quality prop firms. RaiseMyFunds offers a 70-85% split with the added security of FSCA regulation.
• 85-95%: Highly competitive. Verify that other conditions do not compensate (hidden fees, tight drawdown, difficult challenges).

Important consideration: a high profit split is worthless if the prop firm does not pay or imposes conditions that make withdrawal nearly impossible. Always prioritize a moderate split with a reliable, regulated firm over a 95% split with an unregulated operator that may never pay out.

Criterion 3: Drawdown rules

Drawdown is the maximum allowed loss on your account. It is probably the criterion that causes the most failures among prop firm traders. There are two main types of drawdown:

Daily drawdown: The maximum loss allowed in a single trading day. Typically between 3% and 5% of capital. This is the most constraining rule because it limits your daily trading flexibility and can lead to account breaches during volatile market conditions.

Global drawdown (max drawdown): The maximum loss allowed from the starting balance or from the highest point (trailing). Typically between 8% and 12% of capital. This provides more breathing room but still sets a hard limit.

RaiseMyFunds stands out with no daily drawdown requirement, which provides considerable flexibility for traders. You do not have to fear an intraday rule violation, which reduces psychological pressure and allows you to execute your strategy without artificial constraints. This is particularly valuable for swing traders and news traders whose strategies naturally involve larger intraday fluctuations.

Criterion 4: Access model (instant funding vs challenge)

The access model determines how you obtain your funded account. There are two main approaches, each with distinct advantages and drawbacks:

The challenge (evaluation): You pay registration fees and must reach a profit target (typically 8-10%) while respecting drawdown rules within a set timeframe. If you succeed, you get a funded account. If you fail, you lose your fees. The failure rate is typically 85-90%, meaning the vast majority of traders never receive funding through this path.

Instant funding (immediate funding): You pay higher fees but access a funded account directly without any evaluation phase. No risk of failing a challenge. You start trading immediately with real capital. The higher upfront cost is offset by eliminating the challenge failure risk.

RaiseMyFunds offers an instant funding model with no challenge. You access your funded account directly. No evaluation phase, no profit target to reach under pressure, no risk of losing your fees due to challenge failure. This is the most straightforward option for a trader who wants to begin trading funded capital quickly and without unnecessary barriers.

The choice between both models depends on your profile: challenges are cheaper to enter but risky (85-90% failure rate), while instant funding is more expensive upfront but guarantees account access.

Criterion 5: Payout history and reliability

A 90% profit split is meaningless if the prop firm does not actually pay. Payout history is a crucial indicator of reliability. Here is how to evaluate it properly:

What to look for:

• Evidence of regular payouts on Trustpilot, ForexFactory, Reddit
• Identifiable traders (not anonymous accounts) testifying to successful withdrawals
• Cumulative payout statistics communicated by the prop firm
• Consistent payout timelines (1-14 days for serious operators)
• A track record spanning at least 12-24 months of regular payouts

Warning signs:

• No verifiable payout testimonials from real traders
• Withdrawal delays exceeding 30 days
• Testimonials that appear fabricated (similar text, recently created accounts)
• Recurring negative reviews about blocked withdrawals
• Sudden changes to payout schedules or minimum withdrawal amounts

Criteria 6 and 7: Platform, instruments, and support

Criterion 6: Platform and instruments. The trading platform must match your needs and trading style. MetaTrader 4/5 remains the industry standard, but some prop firms offer cTrader or proprietary platforms. Also verify available instruments: forex pairs, indices, commodities, cryptocurrencies. The broader the offering, the more strategic flexibility you have. Consider execution speed and reliability, especially if you trade during high-volatility events.

Criterion 7: Community and support. Responsive customer support is essential, especially when you encounter payout issues or have questions about trading rules. The best prop firms offer live chat support, email with responses within 24 hours, and an active community (Discord, Telegram). Non-existent or slow support is a negative signal that often correlates with payout problems.

Criteria comparison table

RaiseMyFunds checks 6 of the 7 essential criteria: FSCA regulation, competitive profit split (70-85%), no daily drawdown, instant funding with no challenge, verifiable headquarters in Johannesburg (South Africa), and a maximum account size of $400,000.

Frequently asked questions