## Prop Trade for Beginners: A New Choice in the Trading Industry

What common problems do beginners face when entering the trading world? One of them is the lack of sufficient capital to test their strategies. This is where **Prop trading** comes into play.

## What Is Proprietary Trading Really?

**Prop trading** or Proprietary trading is a simple concept: companies provide funds to traders to trade various assets such as stocks, futures, commodities, and forex, then share the profits according to an agreement. It could be 50/50 or 25-30%, depending on the trader's skills and experience.

The main difference from regular trading methods is that traders are not market agents but are "hired" to generate profits for the company. However, the company deducts fees for applications, software, and other expenses afterward.

## Prop Trade vs Hedge Fund: What Are the Differences?

Many people confuse Prop trading with Hedge funds. You need to know that:

- **Hedge Fund**: Gathers money from external investors (wealthy individuals, institutions), and uses it in various markets.
- **Prop trading**: Uses the company's own funds. No money from external investors.

## Forex Prop Trade: Currency Trading with Company Funds

**Forex Prop trading** is a type of Prop trade focusing solely on the currency market. There are two formats:

**Traditional**: Traders are employees with salaries, bonuses, and official duties.

**Online**: Traders apply online, undergo assessments, and gain access to funds without needing to go to an office.

Since 2020, online Forex Prop trading has exploded because there's no need to go to an office. Traders can work from home.

## Benefits of Prop Trading You Should Know

✅ **Flexible Schedule**: You are your own boss and can set your own timetable.

✅ **Ample Capital**: You don't need to find or risk your own money. Huge funds are available for use.

✅ **Low Risk**: Prop trading companies bear most of the risk. Traders only risk the application fee.

✅ **High Income Potential**: If successful, earnings can be very high and life-changing.

✅ **Supportive Community**: Prop trading companies have other traders who help and share strategies.

✅ **Simple Interview Process**: Most companies only require a straightforward interview.

## Disadvantages to Avoid

❌ **Discipline is Crucial**: No fixed salary, no sick pay, no social security.

❌ **Psychology Is a Major Enemy**: Must control emotions—no greed, no fear, no recklessness.

❌ **Unsteady Income**: Profits one day, losses the next. Be mentally prepared.

❌ **High Entry Fees**: If earnings are limited, you might not have enough funds to take the assessment.

❌ **Mental Risks**: Stress from working for yourself can lead to anxiety.

## Step-by-Step Prop Trading Application Process

1. **Find a Suitable Company**: Check reputation, platform, profit ratio.
2. **Verify Qualifications**: Age, experience level.
3. **Submit Online Application**: Share trading history, experience, goals.
4. **Interview**: If selected, the company will interview you about your strategies.
5. **Receive Funds**: If successful, the company will open a trading account, and you can start.

## Evaluation Period: The Real Test

Entering **Prop trading** isn't like a demo account; it requires passing a "challenge," which:

- Usually takes 30-60 days for most companies.
- Traders must demonstrate consistent profitability.
- Must follow company rules, such as not exceeding loss limits.
- Upon passing, full access to funds is granted.

## 5 Effective Prop Trading Strategies

### 1. Manage risk manually
Whether winning or losing, always set a maximum loss (Stop Loss) before trading.

### 2. Don't let emotions drive decisions
If you lose money, avoid trying to recover with risky trades. Stick to your plan from the start.

### 3. Stick to what you know
Don't jump to test new strategies every day. Practice what works until you master it.

### 4. Use resistance and support levels
Buy when the price breaks above support, sell when it reaches resistance. This method is simple and reduces risk.

### 5. Let RSI (Relative Strength Index) guide you
RSI measures whether an asset is overbought or oversold. The indicator ranges from 0-100:
- RSI above 70: Overbought, may reverse down.
- RSI below 30: Oversold, may rise.

## Risk Management in Prop Trading: Practical Advice

**Deeply understand the market**: Don't trade blindly. Understand why prices move.

**Create and follow a trading plan**: Always have Entry, Exit, and Stop Loss points set before trading.

**Test on a demo account first**: Before using real money, test your strategies on a demo account. Backtest with historical data.

**Risk only what you can afford to lose**: If you lose 5,000 THB, can you sleep peacefully? If not, reduce your risk.

## Who Should Try Prop Trading?

**Suitable for:**
- Those with basic trading knowledge.
- People wanting to experience professional-level trading.
- Those ready to learn and adapt.
- Disciplined traders who can control emotions.

**Not suitable for:**
- Those seeking fixed monthly income.
- Risk-averse individuals.
- People who do not understand basic trading concepts.

## Final Thoughts: Is Prop Trading Worth Trying?

**Prop trading** offers a bright opportunity for those aspiring to become professional traders, with abundant capital and high earning potential. But the reality is that it requires dedication, discipline, and the right strategies.

If you're ready to learn, follow a plan, and control your emotions, prop trading can open the door to a professional trading career. Most importantly, choose a reputable, certified prop trading company with fair fee structures.

Remember, becoming a successful trader isn't instant. With commitment, a good plan, and continuous practice, you can truly say that prop trading can change your life.