Prop Firm Industry has started to grow at a rapid speed and now in 2024, the prop firm space has become a very big market where traders can find over 300 prop firms and trade with them. However it is harder to find a good reliable trusted prop firm as many of those prop firms can be fraud. To ease the confusion on what prop firms are good, here are 5 major green flags in a prop firm.
1). The Importance of a Public CEO
One of the First green flag in a prop firm is having a CEO who is publicly available and has a good social media presence. A CEO with a visible presence on social media is often a great sign of transparency and accountability. Social media platforms like LinkedIn and Twitter are the two main places where traders can find CEO of those Prop Firms. A public CEO always addresses all the updates and major announcements and also sometimes if a trader needs help from the prop firm then they can directly talk to the CEO regarding that. In totality, A public CEO builds trust and credibility that they are not involved in any fraudulent behavior.
2).Transparent Rules
Second major green flag in a prop firm is how well they have made the rules and the transparency of those rules. These rules can be regarding the trading conditions, fees, strategies and other policies. Traders can find and read about those rules in Rules/FAQs Page and to read in a more detailed manner, Traders can also read the “Terms & Conditions” page.
It is also important to look for any hidden rules and that’s a big thing, No legit Prop Firm will ever have a hidden rule. Hidden rules are basically found as a rule which is not mentioned in the rules section or either will be added afterwards to a controversy or maybe hidden in legal pages but will not be highlighted. Only way to find or clarify all the rules and hidden rules is talking to the prop firm support staff.
Having Clear rules about each kind of strategy and how the prop firm processes things is definitely a green flag, especially when it’s perfectly written.
3). Does not offers MT4/MT5 with offshore unregulated brokers:-
Broker is the main medium which connects a trader with a prop firm when it comes to actual trading. In February 2024, MetaQuotes banned many prop firms and brokers from using their popular and most loved trading platforms which were MetaTrader 4(MT4) and MetaTrader 5(MT5). The main reason behind this ban was the prop firms who were partnering with unknown unregulated brokers who were providing them MT4 and MT5 trading software. If somehow traders start getting scammed in a high number then it becomes a bad situation for MetaQuotes as it could lose their integrity. Although the ban was lifted but the rules became stricter for brokers. Prop firms who have partnered with unregulated brokers can manipulate the trades and show that the trader was involved in unfair trading practices.
So How can we figure out if the prop firm is working with a regulated broker? It is fairly simple. Legit Prop Firms does not shy away from mentioning the brokers they have partnered with.
4). They are marked as TRUSTED on TheTrustedProp:-
Another Green Flag and one of the Major ones is if the Prop Firm is Marked as ‘Trusted’ on the TheTrustedProp.com website. As the world of Prop Firms is growing, We all need platforms or people who are constantly doing research on which prop firms want the best for you and which prop firm is doing something shady. This is where TheTrustedProp.com Steps in.
The ‘Trusted’ tag represents that the prop firm is operating well, has transparent rules and treat their traders well. Prop Firms who are deemed Trusted by TheTrustedProp are the prop firms whom traders can buy challenges from and trade with without thinking if they will get scammed.
5). Prop Firms That Are At Least 1 Year Old:-
The amount of time a Prop Firm is operating from also plays a big role in a Prop Firm being Legit or not. A prop firm which is operating from over a year is more prone to keep working and will be leading towards stability and trustworthiness. As the time progresses, It gets clearer and clearer for prop firm to sustain and prove themselves that their business model is working really well. In our research we have found out that prop firms who are usually at least one year or older than one year tend to grow bigger and offer much more reliability and offers that cater traders.
Conclusion
In a rapid growing market of Forex trading, Identifying a trustworthy prop firm can be a bit difficult but these 5 Major Green Flags can filter out a lot of Legit Prop Firms and traders can be less likely to fall victims to scams.
In a rapid growing market of Forex trading, Identifying a trustworthy prop firm can be a bit difficult but these 5 Major Green Flags can filter out a lot of Legit Prop Firms and traders can be less likely to fall victims to scams.