Proprietary trading or prop trading provides traders with a new way to start their trading journey. Now traders do not need to restrict themselves due to low capital investment. Prop firms provide traders with different benefits that are never possible with traditional trading. But all these benefits depend on the firm you choose because each firm provides different benefits and charges different types of costs. Most of the prop firms first require traders to pass an evaluation process. One-step challenge prop firms mean traders just need to complete a single step to get success in the evaluation process. To choose the right prop firm it is important to consider the cost and benefits of prop firms. But how will you evaluate the cost and benefits of one-step challenge prop firms? If you don’t know then let’s see in detail about these factors that are important to consider while evaluating one-step challenge prop firms.
What are One-Step evaluation Prop Firms?
Prop firms first need traders to pass an evaluation process. This challenge decides whether traders have the skills to protect capital and give firms a specific return on their capital. When traders pass this challenge and prove their skills then they get access to a funded trading account. One-step challenge prop firms bring a new change in this evaluation process and provide traders with a single step of evaluation. This innovative way of evaluation simplifies complicated processes and criteria and allows traders to focus on a single step and achieve success in this evaluation easily. Now traders who want immediate access to a funding account can easily pass this single step in a very short time frame. No doubt this structure is faster than the multi-step evaluation process but before choosing any firm it is important to first understand their associated costs and benefits.
Costs associated with One-Step Challenge Prop Firms:
Evaluation Fees
The primary cost that traders first pay to enter in a one-step challenge is the evaluation fee. This upfront payment provides traders access to the challenge. Some firms also refund this cost when traders successfully complete an evaluation process. This fee varies in different firms as it depends on the size of the funded account from $100 to $1000 or more. When you see the evaluation fee on prop firms consider some factors like the account size they provide and their refund policies. Firms that provide larger accounts also charge higher fees but also increase the chance of higher earnings. Also prefer firms that refund evaluation fees so you do not face financial expenses.
Platform and Data Costs
Prop firms also provide traders access to top trading platforms and tools. These tools are very costly if traders buy individually but prop firms charge a small platform and data cost. This cost structure is different in all firms as some firms charge a subscription fee model that is based on monthly fees for accessing platforms and some firms charge costs for live data feeds that are essential for trading.
Instant funding
Some firms also provide an option of an instant funding account in which traders are given direct access to live funded trading accounts immediately but in this process, firms charge higher upfront costs.
Benefits of One-Step Evaluation Firms
One-step evaluation prop firms have different criteria and benefits if we compare them with associated costs.
Access to Capital
With the help of prop firms traders get access to large amounts of capital. This large amount of capital ranging from $10,000 to over $1,000,000 provides traders an opportunity to save larger trading positions that are difficult to take with their own limited funds. Traders also do not face any personal financial risk instead they take risk only on their evaluation fee.
Streamlined Process
The single-phase evaluation is more simple and time-saving as compared to multi-step models. This structure is beneficial for those traders who have proven skills that are ideal for those who have confidence in their methods. It also helps traders to quickly access funding without long evaluations.
Revenue Sharing
Most one-step challenge firms provide competitive profit splits in which traders retain 70% to 90%. When you see firms’ profits then also consider their payout timelines that show how quickly they distribute profits and whether they provide a scaling option or not. Scalable profit sharing provides more opportunities to increase funding as you improve your performance.
Other resources
Best prop firms also provide traders with additional resources like trading platforms, tools, and community support that help traders improve their trading skills for long-term trading success.
Final Thoughts
One-step challenge prop firms provide traders more benefits if we compare to its cost. These firms charge evaluation costs and platform costs which are affordable for trades. With the help of prop firms traders just risk on this cost instead of taking a risk on their large amount of capital.