What is prop trading?

The OANDA Prop Trader Challenge is a smart way to enter the world of prop trading, with tiers to suit traders at every level. But what exactly is prop trading, and how is it different from standard trading?

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How do prop trading firms and prop traders make money?

In a standard trading setup, a firm would derive its income on a commission or percentage basis from acting as a broker on behalf of its clients. The client is using their own funds to place trades – and that’s a major difference between a brokerage model and prop trading.

In the case of prop trading, the firm is using its own funds, so it earns 100% of any profits or losses that it makes. 

The trader makes their money from an agreed share of any profits that they make. In the case of OANDA Prop Trader, the allocated funds are virtual – but the prop trader gets a genuine share of up to 90% any profits they make.

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Funding level

Prop trading usually gives traders access via a virtual account to a higher level of capital than they would normally have available for trading. 

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Technology and market data

Prop trading firms normally include access to their tools, technology and market data as part of their programs. These would usually be too costly for many potential traders.

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Low-risk learning

Trading can be challenging. Prop trading can offer learning opportunities for traders of any level as the cost for participating is limited to the fee the participant pays to take the challenge. 

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Increased oversight

OANDA wants to make sure that the traders who generate signals are qualified for the program. Risk limits and rules are in place to make sure traders who qualify to become signal providers are producing usable, valuable trading information. 

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Your income depends on your skill

Successful trading at any level depends on the skill of the trader. A prop trading firm may supply you with the tools and tech to help you build your strategies, but you have to evolve them and make them work.

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It might not be for you

Not everyone is cut out for trading. It’s a competitive environment and there’s a lot to learn.

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PROFIT SHARE 80%
Gold Challenge
$100,000
Virtual funding
Fee $699 | Most popular
PROFIT SHARE 80%
OANDA_OLA_PHASE2_3.0_CHALLENGES_10K
10k Challenge
Virtual funding
$10,000
Fee $169
PROFIT SHARE 80%
OANDA_OLA_PHASE2_3.0_CHALLENGES_TITANIUM
Titanium Challenge
Virtual funding
$25,000
Fee $249
PROFIT SHARE 90%
OANDA_OLA_PHASE2_3.0_CHALLENGES_TITANIUM_X
Titanium X Challenge
Virtual funding
$25,000
Fee $299
PROFIT SHARE 80%
OANDA_OLA_PHASE2_3.0_CHALLENGES_SILVER
Silver Challenge
Virtual funding
$50,000
Fee $399
PROFIT SHARE 88%
OANDA_OLA_PHASE2_3.0_CHALLENGES_LUCKY_888
Lucky 888 Challenge
Virtual funding
$188,888
Fee $888
PROFIT SHARE 80%
OANDA_OLA_PHASE2_3.0_CHALLENGES_PLATINUM
Platinum Challenge
Virtual funding
$250,000
Fee $1,200
PROFIT SHARE 80%
OANDA_OLA_PHASE2_3.0_CHALLENGES_BLACK
Black Challenge
Virtual funding
$500,000
Fee $2,400