Proprietary trading firms employ different evaluation models to assess potential traders. However, recent events have raised questions about the sustainability and fairness of these models.
Common Evaluation Models
1. Challenge-Based Programs
The standard two-phase evaluation process has come under scrutiny for:
- Unrealistic profit targets
- Aggressive time constraints
- Hidden fees and conditions
2. Instant Funding Programs
While attractive, these programs often have:
- Higher initial costs
- Stricter trading rules
- Limited scaling opportunities
Risk Factors
Several risk factors have been identified:
- Aggressive profit targets encouraging risky trading
- Lack of proper risk management guidelines
- Unclear terms and conditions
Industry Standards
There's a growing call for standardization across the industry:
- Transparent evaluation criteria
- Fair profit sharing models
- Clear withdrawal processes
The future success of prop trading depends on establishing and maintaining these standards.