How Do Forex Prop Firms Work?
Unlike other trading companies that allow traders to start with a demo account, proprietary trading firms do not use demo accounts. They also hire prop traders to trade for them by giving them a certain amount of capital depending on their skills. When the trader makes profits, the company will deduct its amount depending on the agreement made.
The agreement between the company and traders usually varies from company to company. Some companies like ours (Audacity Capital) prefer to share a 50/50 profit split with our traders. Other companies may give you a profit split of 25-30% depending on so many things like your skills.
However, most prop trading firms have a “desk fee.” This fee caters to utilities, terminals, trading software, and personnel wages. It is up to you to decide the preferable prop trading firm to join.
Reading charts and currency pairs correlation table is also crucial as it helps understand how correlation functions. A reading that is less than -70 and more than 70 means a strong correlation.
On the other hand, if a reading ranges in -70 and 70, it means that currency pairs are not strong or less correlated. The formula below explains well how the correlation coefficient is calculated.