What is a Prop Firm?
A Prop Firm is a company that enables you to trade with their money for a share of the profits. In order to gain access to these funds you have to prove to them you are capable of trading; this is often one or two tests to clarify you are able to make a consistent gain. The most common test is to generate 10% profit on the account without your account going into more than 10% drawdown at any one time. To take these tests, you must pay a fee, for example, if you wanted access to a $100k trading account it would be around $500 to buy the challenge for that size. If you pass the challenge then you get to trade with the $100k account and keep around 80% of the profits, however if you fail the challenge, they keep your $500.
How Does a HFT Prop Firm Differ to a Normal Prop Firm?
HFT firms started gaining attention around mid 2023 with the key feature being that you can get access to funding in a matter of hours through a HFT bot trading on the account for you, before this the only option was to either go through the slog of passing a challenge account manually, which usually takes a few months (if you can pass). Although this means you can now get a guaranteed pass and access to the funds straight away, HFT firms do come with stricter rules which makes trading after you have passed the challenge a little harder.
What’s The Best HFT Firm?
Nova Funding
Personally, Nova funding was the first firm that I saw offering HFT passing and has also consistently been the best one. Although they have had some delays with payouts, they have always paid out as long as the trader didn’t break any rules. This is who I have had the most payouts with, and so far, I have never had a problem with them. With many HFT firms making rules stricter and stricter I feel that Nova offers a fair set. In addition to some pretty standard prop firm rules they have a lot size consistency rule, no weekend trading (unless requested) and a 6% profit cap. Unlike other firms, breaking certain rules will usually only end up in a soft breach (meaning your payout will be denied but you will keep your account). However, like with every firm it is imperative you abide by the rules to ensure a payout… For those interested in stats they say they have paid out over $20 million in 16,000+ payouts in just over a year.
What HFT Firms Should I avoid?
Kortana
Unlike nova, I have not used Kortana funding for a few reasons. One being that I have seen multiple payouts unreasonably denied. They seemed to build trust by paying out to begin with but have had lots of changes in rules which makes it almost impossible to get a payout from them. Another reason is that if you follow signals there is a high chance you will get flagged for copy trading. It is also key to note that a violation of any of these rules will most likely result in losing the account altogether and no refund will be offered.
How to Ensure you Secure Prop Firm Payouts
Firstly, make sure you are not using one of the firms that try and avoid payouts like Kortana and Infinity. As mentioned above I would say Nova are the strongest HFT firm at the moment, they offer consistent payouts and a nice set of rules. To best ensure a payout make sure you are following a profitable strategy with correct risk management. You will also need to read every single rule carefully and refresh yourself with them weekly. Even one break of these rules will lead to you receiving no payout at all. When it comes to taking profits, it is best to be conservative, I have found that smaller payouts are much more likely to be accepted. This is why in the long term it may be wise to get a Non HFT challenge account, although they may take longer to pass, they offer better rules/splits and are generally more reliable, whether that being with bigger payouts or longevity.
Pros and Cons of HFTs
I would say the clear benefit from HFT firms is having instant access to a live account, placing you in a prime position to secure a payout. You will need to use a private prop firm challenge passing service in order to get these challenges passed for you. However, one con being that certain firms can have tight rules, which means you will have to be very careful that you conform to them, otherwise you could lose your account/payout. Also, it’s common for HFT firms to have slightly worse spreads and commission compared to normal firms, so that is something worth bearing in mind.
