Trader Scouting and Prop Firms Overview and Comparison: Difference between revisions

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Scouting programs have grown in popularity in recent years and many are holding themselves out as full fledged prop firms. Let's dig into what they are, where they fit in this industry, and their advantages and disadvantages.
Scouting programs have grown in popularity in recent years and many are holding themselves out as full-fledged prop firms. Let's dig into what they are, where they fit in this industry, and their advantages and disadvantages.


A trader scouting program is one that evaluates potential traders (for a fee) to qualify them for trading a firm's capital on behalf of the firm. These evaluations come in different shapes and sizes, but generally they aim to prove the trader can manage risk and be consistent in their approach to the markets.
A trader scouting program is one that evaluates potential traders (for a fee) to qualify them for [[trading]] a firm's capital on behalf of the firm. These evaluations come in different shapes and sizes, but generally they aim to prove the trader can manage [[risk]] and be consistent in their approach to the markets.
 
Many of these companies call themselves "prop firms," and while not technically incorrect, it's important to note the distinction between various types of prop firms and scouting programs:
 


Many of these companies call themselves "prop firms," and while not technically incorrect, it's important to not the distinction between various types of prop firms and scouting programs:


==Traditional prop firms==
==Traditional prop firms==


::*These are companies that have fully aligned their interest with their traders. The firms will typically pay a base salary, and bonus traders out at their discretion (based on performance but not strictly tied to it.) They typically require you to work on a trade desk, on a trade floor, in major financial centers around the world.​
::*These are companies that have fully aligned their interest with their traders. The firms will typically pay a base salary, and bonus traders out at their discretion (based on performance but not strictly tied to it.) They typically require you to work on a trading desk, on a trading floor, in major financial centers around the world.​
::*These firms typically only hire fresh grades from top schools, or established institutional traders. For this reason, these firms are often inaccessible to retail traders looking to get into the institutional side of the industry.​
::*These firms typically only hire fresh grades from top schools or established institutional traders. For this reason, these firms are often inaccessible to retail traders looking to get into the institutional side of the industry.​
::*When people on the institutional side of the industry talk about 'prop firms' they typically mean this class of company.​
::*When people on the institutional side of the industry talk about 'prop firms' they typically mean this class of company.​
::*Examples include Jump, First New York Securities, Wolverine Trading, and Optiver (to name a few.) These days, most traditional props also are heavily involved in electronic market making or exotic markets.​
::*Examples include Jump, First New York Securities, Wolverine Trading, and Optiver (to name a few.) These days, most traditional props also are heavily involved in electronic market-making or exotic markets.​
::*The firm's primary source of revenue comes from trading operations and [[trading]] profits.​


::*The firm's main source of revenue comes from trading operations and trading profits.​


==Depository prop firms / first loss / broker-dealers==
==Depository prop firms / first loss / broker-dealers==


::*A depository prop firm is one where the trader's interests are far less aligned with the firm. The trader isn't backed by the firm and has to put up a risk deposit. The trader also doesn't get a base salary, and will likely be charged a fee for using a spot on a desk each month.​
::*A depository prop firm is one where the trader's interests are far less aligned with the firm. The trader isn't backed by the firm and has to put up a [[risk]] deposit. The trader also doesn't get a base salary, and will likely be charged a fee for using a spot on a desk each month.​
::*Should the trader lose money, they lose their own money first. This transfers the risk from the firm to the trader, and in return the payout percentage the trader gets from these firms is much higher than elsewhere (70%-95%.)​
::*Should the trader lose money, they lose their own money first. This transfers the [[risk]] from the firm to the trader, and in return, the payout percentage the trader gets from these firms is much higher than elsewhere (70%-95%.)​
::*Examples include T3 Trading, Bright Trading, and WTS (to name a few.)​
::*Examples include T3 Trading, Bright Trading, and WTS (to name a few.)​
::*The firm's main source of revenue comes from marking up transaction fees and charging for training courses. Despite all this, many traders will go with a depository firm for access to institutional grade access to the markets (DMA, professional software and platforms, etc..)​
::*The firm's primary source of revenue comes from marking up transaction fees and charging for training courses. Despite all this, many traders will go with a depository firm for access to institutional grade access to the markets (DMA, professional software and [https://volatility.red/The_Best_and_Most_Popular_Forex_Platforms_for_Demo platforms], etc..)​
 


==Scouting firms==
==Scouting firms==


::*As mentioned in the beginning of this article, a scouting firm operates more like a service than a firm and evaluates traders for potential funding. The trader doesn't have to put up any risk capital, but they do have to pay an evaluation fee.​
::*As mentioned at the beginning of this article, a scouting firm operates more like a service than a firm and evaluates traders for potential funding. The trader doesn't have to put up any [[risk]] capital, but they do have to pay an evaluation fee.​
::*There is no barrier to entry to these scouting firms; if you pay for an evaluation, you have the same chance of getting funded as anyone else and it's entirely dependent on your performance.​
::*There is no barrier to entry to these scouting firms; if you pay for an evaluation, you have the same chance of getting funded as anyone else and it's entirely dependent on your performance.​
::*Scouting firms are typically marketed toward retail traders, and as such, they focus on tools and software commonly found at retail brokerages. Unlike traditional prop firms, or some depository shops, these firms are typically virtual and do not have a trade floor to physically join.​
::*Scouting firms are typically marketed toward retail traders, and as such, they focus on tools and software commonly found at [https://volatility.red/Forex_broker retail brokerages]. Unlike traditional prop firms or some depository shops, these firms are typically virtual and do not have a trading floor to join physically.​
::*Some scouting firms will go further and offer guidance, training, mentorship, etc.. once you've passed their evaluation. Often these are the firms that hold themselves out as "prop firms" instead of just a trader scouting program.​
::*Some scouting firms will go further and offer guidance, training, mentorship, etc.. once you've passed their evaluation. Often these are the firms that hold themselves out as "prop firms" instead of just a trader scouting program.​
::*Examples include the firms listed in the table below.​
::*Examples include the firms listed in the table below.​
::*The firm's main source of revenue is the evaluation fees, and these fees can be substantially more than they make from profitable traders working for them. ​
::*The firm's main source of revenue is the evaluation fees, and these fees can be substantially more than they make from profitable traders working for them. ​


With that said, when it comes to forex trading, the most accessible of the three categories above are scouting firms. There are many advantages here for retail traders:
 
 
With that said, when it comes to [[Forex]] [[trading]], the most accessible of the three categories above are scouting firms. There are many advantages here for retail traders:


*Access to capital / backing
*Access to capital / backing
*A risk system and risk monitor
*A [[risk]] system and [[risk]] monitor
*Mentors or supervisors who encourage positive trading habits
*Mentors or supervisors who encourage positive [[trading]] [https://volatility.red/Trading_psychology habits]
*Downside is just the evaluation fee and your time commitment
*Downside is just the evaluation fee and your time commitment


The above points will especially make a scouting program attractive to novice traders who are just starting out.
The above points will especially make a scouting program attractive to novice traders who are just starting out.


==Scouting firm comparison==
==Scouting firm comparison==
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Below you will find the 4 of the most popular scouting programs and their offering for comparison:
Below you will find the 4 of the most popular scouting programs and their offering for comparison:


''Note: Any field with "Entry" and "Max" refers to the entry level evaluation package as compared to the highest end evaluation package. These come at different price points.''
''Note: Any field with "Entry" and "Max" refers to the entry level evaluation package as compared to the highest end evaluation package. These come at different [https://volatility.red/Price_Action_Analysis price points].''


{|class ="wikitable"
{|class ="wikitable"
!  
!  
! style="background:#d0e5f5" width="150pt" | [https://geni.us/FTMO https://i.imgur.com/ekJZnT7.png] <br> [https://geni.us/FTMO https://ftmo.com <br> FTMO​]
! style="background:#d0e5f5" width="150pt" | [https://geni.us/FTMO https://i.imgur.com/ekJZnT7.png] <br> [https://geni.us/FTMO https://ftmo.com <br> FTMO​]
! style="background:#d0e5f5" width="150pt" | [https://geni.us/TopStepFX https://i.imgur.com/olhky2U.png] [https://geni.us/TopStepFX https://topstepfx.com <br> TopStepFX]​
! style="background:#d0e5f5" width="150pt" | [https://geni.us/T4TCapital https://i.imgur.com/yBFFThr.png] [https://geni.us/T4TCapital https://traders4traders.com <br> Traders4Traders​]
! style="background:#d0e5f5" width="150pt" | [https://geni.us/T4TCapital https://i.imgur.com/yBFFThr.png] [https://geni.us/T4TCapital https://traders4traders.com <br> Traders4Traders​]
! style="background:#d0e5f5" width="150pt" | [https://geni.us/fivepercenters https://i.imgur.com/sExmqZt.png] [https://geni.us/fivepercenters https://the5ers.com <br> The 5%ers​]
! style="background:#d0e5f5" width="150pt" | [https://geni.us/fivepercenters https://i.imgur.com/sExmqZt.png] [https://geni.us/fivepercenters https://the5ers.com <br> The 5%ers​]
|-
|-
| width="100pt" | '''Trial Account Max Buying Power / Leverage''' || 100:1 || Entry: $200k <br> Max: $500k || 100:1 || 6:1 (with 30:1 'aggressive' programs also available)
| width="100pt" | '''Trial Account Max Buying Power / Leverage''' || 100:1 || 100:1 || 10:1 (with 30:1 'aggressive' programs also available)
|-
| '''Trial Account Size''' || Entry: $10k <br> Max: $100k || Entry: $2k <br> Max: $5k || Entry: $25k <br> Max: $100k || Entry: $6k <br> Max: $20k
|-
|-
| '''Funded Account Size''' || Entry: $10k <br> Max $100k || Entry: $2k <br> Max: $5k || Entry: $25k <br> Max: $100k || Entry: $24k <br> Max: $80k
| '''Trial Account Size''' || Entry: $10k <br> Max: $200k || Entry: $25k <br> Max: $100k || Entry: $6k <br> Max: $20k
|-
|-
| '''Challenge Period''' || 30 Days, but 2nd round verification required with stricter conditions || No Time Limit (3 month inactivity timeout,) but 2nd round verification required with stricter conditions || No Time Limit (3 month inactivity timeout) || 6 Months (or less)
| '''Funded Account Size''' || Entry: $10k <br> Max $200k || Entry: $25k <br> Max: $100k || Entry: $24k <br> Max: $80k
|-
|-
| '''Profit Share''' || 70% || '''100% of first $5k, 80% thereafter''' || 60% || 50%
| '''Challenge Period''' || 30 Days, but 2nd round verification required with stricter conditions || No Time Limit (3 month inactivity timeout) || 6 Months (or less)
|-
|-
| '''Overnight / Over-Weekend Positions''' || Weekday overnights permitted, NO weekend positions || Weekday overnights permitted, NO weekend positions || Weekday overnights permitted, NO weekend positions || Overnights and weekends are permitted
| '''Profit Share''' || '''80%''' base and '''90%''' on profits above 25% ROI || 60% base, Scale Up1 70%, Scale Up2 '''80%''' || 50%
|-
|-
| '''News Trading / Restriction''' || '''Some''' news releases are restricted for trading || none || none || none
| '''Overnight / Over-Weekend Positions''' || Weekday overnights permitted, NO weekend positions || Weekday overnights permitted, NO weekend positions || Overnights and weekends are permitted
|-
|-
| '''Minimum Trading Days''' || 10 days || none || none || 20 days
| '''News Trading / Restriction''' || '''Some''' news releases are restricted for trading || none || none
|-
|-
| '''Daily / Weekly / Position Loss Limit''' || Entry: $500 (Daily) <br>  Max: $5,000 (Daily) || Entry: $1,300 (Weekly) <br>  Max: $3,300 (Weekly) || Entry: $500 (Weekly) <br>  Max: $2,000 (Weekly) || -1.5 % max loss per position (!)
| '''Minimum Trading Days''' || 10 days || none || 20 days
|-
|-
| '''Maximum Loss Limit''' || Entry: $1,000 <br>  Max: $10,000 || Entry: $1,300 <br> Max: $3,300 || Entry: $1,000 <br>  Max: $4,000 || 4% Absolute drawdown (not trailing)
| '''Daily / Weekly / Position Loss Limit''' || Entry: $500 (Daily) <br>  Max: $10,000 (Daily) || -2 % max loss per position <br> -3 % max loss for all open positions || -2 % max loss per position
|-
|-
| '''Profit Target''' || Entry: $1,000 <br>  Max: $10,000 || Entry: $2,000 <br>  Max: $5,000 || Entry: $2,500 <br> Max: $10,000 || Entry: $375 <br> Max: $1,400
| '''Maximum Loss Limit''' || Entry: $1,000 <br>  Max: $20,000 || Entry: $1,250 <br>  Max: $5,000 <br> 5% trailing drawdown || 6%
|-
|-
| '''Refundable Fee''' || Yes || no || no || no
| '''Profit Target''' || Entry: $1,000 <br>  Max: $20,000 || Entry: $2,000 <br> Max: $8,000 || Entry: $375 <br> Max: $1,400
|-
|-
| '''Platforms''' || MT4, '''MT5, cTrader''' || MT4 || MT4 || MT4
| '''Refundable Fee''' || Yes || no || no
|-
|-
| '''Cost Per Month:''' || cell 2 || cell 3 || cell 4 || cell 5
| '''Platforms''' || MT4, '''MT5, cTrader''' || MT4 || MT5
|-
|-
| '''Notes''' || If you do not pass the challenge, but didn't violate any risk rules, your next challenge is free || TopStepFX also has a scouting program for futures trading called [TopStepTrader] || Stop loss orders must be attached to every position and pending limit order || Live account evaluations and earning from evaluation carry forward into your funded account.
| '''Notes''' || If you do not pass the challenge, but didn't violate any risk rules, your next challenge is free || Stop loss orders must be attached to every position and pending limit order || Live account evaluations and earning from evaluation carry forward into your funded account.
|-
|-
| '''Cost Per Attempt:''' || Entry: €155 <br>  Max: €540 || n/a || Entry: $199 <br>  Max: $350 || Entry: $275 <br>  Max: $875
| '''Cost Per Attempt:''' || Entry: €155 <br>  Max: €1080 || Entry: $125 <br>  Max: $350 || Entry: €235 <br>  Max: €745
|-
|-
| '''Cost Per Month:''' || n/a || Entry: $125 <br>  Max: $275 || n/a || n/a
| '''Cost Per Month:''' || n/a || n/a || n/a
|-
|-
|}
|}
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And finally, my own thoughts and recommendations on the above companies:
And finally, my own thoughts and recommendations on the above companies:


They are all marketing heavy, which is fine, but it's important not to get caught up in flashy numbers. When a scouting program advertises $100k of buying power in forex, that's just 1 standard lot, and at 100:1 leverage, that would imply you're trading a $1000 sized account. Perhaps the evaluation fee would be worthwhile for the risk system, structured environment, and training...but judging these programs on just the account balance alone might make some look a bit skimpy.
They are all marketing-heavy, which is fine, but it's important not to get caught up in flashy numbers. When a scouting program advertises $100k of buying power in [[Forex]], that's just 1 standard lot, and at 100:1 leverage, that would imply you're [[trading]] a $1000 sized [https://volatility.red/The_Best_and_Most_Popular_Forex_Platforms_for_Demo account]. Perhaps the evaluation fee would be worthwhile for the [https://volatility.red/Risk_Management risk system], structured environment, and training...but judging these programs on just the [https://volatility.red/The_Best_and_Most_Popular_Forex_Platforms_for_Demo account] balance alone might make some look a bit skimpy.
 
There's a lot to be said about having accountability and [https://volatility.red/Risk_Management risk controls] when you trade, and these programs all enforce it. You may not find value in the profit split or [https://volatility.red/The_Best_and_Most_Popular_Forex_Platforms_for_Demo account] size (especially if you're well off and already have funds to trade,) but a trader scouting program might just be what gives you the structure you need to find consistency. Simply put, some people just need a stronger framework applied externally to excel in the [[trading]] world, and there's nothing wrong with that.
 
==[https://geni.us/T4TCapital Traders4Traders​]==
 
[https://geni.us/T4TCapital https://traders4traders.com​]


There's a lot to be said about having accountability and risk controls when you trade, and these programs all enforce it. You may not find value in the profit split or account size (especially if you're well off and already have funds to trade,) but trader scouting program might just be what gives you the structure you need to find consistency. Simply put, some people just need a stronger framework applied externally to excel in the trading world, and there's nothing wrong with that.
Traders4Traders has ok conditions but the 2nd worst profit split available. Their offering compliments an array of paid courses, coaching, and programs. However, the cross-selling here is a bit heavy.


==TopStepFX==


The profit split is the most favorable with [TopStepFX] at 80%, and a huge plus is how your first $5,000 of profit is 100% your own. As a trade off here, [TopStepFX] goes by the monthly subscription model, and if it takes you more than a month to pass their evaluation, you might be spending a bit more than you expected before earning anything in return
==[https://geni.us/fivepercenters 5%ers​]==


==Traders4Traders==
[https://geni.us/fivepercenters https://the5ers.com]


Traders4Traders has ok conditions but the 2nd worst profit split available. Their offering compliments an array of paid courses, coaching, and programs. However, the cross selling here is a bit heavy.
The 5%ers offer something a little different than other programs, as you are [[trading]] a [https://volatility.red/The_Best_and_Most_Popular_Forex_Platforms_for_Demo live account] during your trial. The [https://volatility.red/Risk_Management risk controls] on your [https://volatility.red/The_Best_and_Most_Popular_Forex_Platforms_for_Demo trial account] are strict to reflect the real money in play and don't expect to be able to lose more than you've paid for your trial, but forcing good [https://volatility.red/Risk_Management risk management] isn't a bad thing.


==5%ers==
I've highlighted The 5%ers "low-risk" plans in the comparison table. Pay attention to the leverage offered, as the [https://volatility.red/The_Best_and_Most_Popular_Forex_Platforms_for_Demo account] balances might sound high upfront but the leverage is set lower so your total buying power might equal what other firms offer with smaller [https://volatility.red/The_Best_and_Most_Popular_Forex_Platforms_for_Demo account] sizes. In the end, your max [https://volatility.red/Risk_Management risk], targets, and buying power are the metrics that matter when comparing.


The 5%ers offer something a little different than other programs, as you are trading a live account during your trial. The risk controls on your trial account are strict to reflect the real money in play, and don't expect to be able to lose more than you've paid for your trail, but forcing good risk management isn't a bad thing.
While the profit split is the lowest of the group at only 50%, the upside at The 5%ers is how their evaluations are done on [https://volatility.red/The_Best_and_Most_Popular_Forex_Platforms_for_Demo live accounts] and any profits you earn during the evaluation get rolled into your funded [https://volatility.red/The_Best_and_Most_Popular_Forex_Platforms_for_Demo account] once passed. Also, unlike other firms where you can increase your [https://volatility.red/Risk_Management account risk] by retaining earnings in the firm, this firm will increase your [https://volatility.red/The_Best_and_Most_Popular_Forex_Platforms_for_Demo account] based on performance (and quite aggressively at that; a funded trader could see 2x the capital allocated to them after 10% returns on a funded [https://volatility.red/The_Best_and_Most_Popular_Forex_Platforms_for_Demo account].)


I've highlighted The 5%ers "low risk" plans in the comparison table. Pay attention to the leverage offered, as the account balances might sound high upfront, but the leverage is set lower so your total buying power might equal what other firms offer with smaller account sizes. In the end, your max risk, targets, and buying power are the metrics that matter when comparing.


While the profit split is lowest of the group at only 50%, the upside at The 5%ers is how their evaluations are done on live accounts and any profits you earn during the evaluation gets rolled into your funded account once passed. Also, unlike other firms where you can increase your account risk by retaining earnings in the firm, this firm will increase your account based on performance (and quite aggressively at that; a funded trader could see 2x the capital allocated to them after 10% returns on a funded account.)
==[https://geni.us/FTMO FTMO​]==


==FTMO==
[https://geni.us/FTMO https://ftmo.com]
 
FTMO is a strong candidate here as their payout is the highest of the group at 70% + and they offer additional [https://volatility.red/The_Best_and_Most_Popular_Forex_Platforms_for_Demo trading platforms] like MT5 and cTrader. Further, FTMO provides trader workshops, webinars, community interaction, and some coaching. Their main drawback is the restriction of [[trading]] during most [https://volatility.red/Economic_data_releases high-impact news releases].


FTMO is a strong candidate here as their payout is the 2nd highest of the group at 70% and they offer additional trading platforms like MT5 and cTrader. Further, FTMO provides trader workshops, webinars, community interaction, and some coaching. Their main drawback is the restriction of trading during most high impact news releases.


==Conclusion==
==Conclusion==


Personally, if I was going to seek funding through a scouting program, I'd break my choice into two categories:
Personally, if I were going to seek funding through a scouting program, I'd break my choice into two categories:
 
If I was looking for a structured way to learn with training, community, and webinars: I'd likely go with FTMO for their more comprehensive offering and better payouts. New traders should lean in this direction.
 
However, if I was looking to manage a larger [https://volatility.red/The_Best_and_Most_Popular_Forex_Platforms_for_Demo account] to scale an existing strategy, The 5%ers fits really well here.
 


If I was looking for a structured way to learn with training, community, and webinars: I'd likely go with FTMO or TopStepFX for their more comprehensive offering and better payouts. New traders should lean in this direction.
==Related Wikis==


However, if I was looking to manage a larger account to scale an existing strategy, The 5%ers fits really well here.
Readers of '''Trader Scouting and Prop Firms Overview and Comparison''' also viewed:


I hope this overview has been helpful. Feel free to reply with any questions or comments about trader scouting programs, I'll answer what I can and point you in the right direction.
* [[The Best and Most Popular Forex Platforms for Demo]]
* [[Recommended Forex Books for New and Developing Traders]]
* [[Forex]]
* [[Having an Edge in your Trading]]
* [[Speculating]]

Latest revision as of 19:36, 17 October 2023

Scouting programs have grown in popularity in recent years and many are holding themselves out as full-fledged prop firms. Let's dig into what they are, where they fit in this industry, and their advantages and disadvantages.

A trader scouting program is one that evaluates potential traders (for a fee) to qualify them for trading a firm's capital on behalf of the firm. These evaluations come in different shapes and sizes, but generally they aim to prove the trader can manage risk and be consistent in their approach to the markets.

Many of these companies call themselves "prop firms," and while not technically incorrect, it's important to note the distinction between various types of prop firms and scouting programs:



Traditional prop firms

  • These are companies that have fully aligned their interest with their traders. The firms will typically pay a base salary, and bonus traders out at their discretion (based on performance but not strictly tied to it.) They typically require you to work on a trading desk, on a trading floor, in major financial centers around the world.​
  • These firms typically only hire fresh grades from top schools or established institutional traders. For this reason, these firms are often inaccessible to retail traders looking to get into the institutional side of the industry.​
  • When people on the institutional side of the industry talk about 'prop firms' they typically mean this class of company.​
  • Examples include Jump, First New York Securities, Wolverine Trading, and Optiver (to name a few.) These days, most traditional props also are heavily involved in electronic market-making or exotic markets.​
  • The firm's primary source of revenue comes from trading operations and trading profits.​


Depository prop firms / first loss / broker-dealers

  • A depository prop firm is one where the trader's interests are far less aligned with the firm. The trader isn't backed by the firm and has to put up a risk deposit. The trader also doesn't get a base salary, and will likely be charged a fee for using a spot on a desk each month.​
  • Should the trader lose money, they lose their own money first. This transfers the risk from the firm to the trader, and in return, the payout percentage the trader gets from these firms is much higher than elsewhere (70%-95%.)​
  • Examples include T3 Trading, Bright Trading, and WTS (to name a few.)​
  • The firm's primary source of revenue comes from marking up transaction fees and charging for training courses. Despite all this, many traders will go with a depository firm for access to institutional grade access to the markets (DMA, professional software and platforms, etc..)​


Scouting firms

  • As mentioned at the beginning of this article, a scouting firm operates more like a service than a firm and evaluates traders for potential funding. The trader doesn't have to put up any risk capital, but they do have to pay an evaluation fee.​
  • There is no barrier to entry to these scouting firms; if you pay for an evaluation, you have the same chance of getting funded as anyone else and it's entirely dependent on your performance.​
  • Scouting firms are typically marketed toward retail traders, and as such, they focus on tools and software commonly found at retail brokerages. Unlike traditional prop firms or some depository shops, these firms are typically virtual and do not have a trading floor to join physically.​
  • Some scouting firms will go further and offer guidance, training, mentorship, etc.. once you've passed their evaluation. Often these are the firms that hold themselves out as "prop firms" instead of just a trader scouting program.​
  • Examples include the firms listed in the table below.​
  • The firm's main source of revenue is the evaluation fees, and these fees can be substantially more than they make from profitable traders working for them. ​


With that said, when it comes to Forex trading, the most accessible of the three categories above are scouting firms. There are many advantages here for retail traders:

  • Access to capital / backing
  • A risk system and risk monitor
  • Mentors or supervisors who encourage positive trading habits
  • Downside is just the evaluation fee and your time commitment

The above points will especially make a scouting program attractive to novice traders who are just starting out.


Scouting firm comparison

Below you will find the 4 of the most popular scouting programs and their offering for comparison:

Note: Any field with "Entry" and "Max" refers to the entry level evaluation package as compared to the highest end evaluation package. These come at different price points.

ekJZnT7.png
https://ftmo.com
FTMO​
yBFFThr.png https://traders4traders.com
Traders4Traders​
sExmqZt.png https://the5ers.com
The 5%ers​
Trial Account Max Buying Power / Leverage 100:1 100:1 10:1 (with 30:1 'aggressive' programs also available)
Trial Account Size Entry: $10k
Max: $200k
Entry: $25k
Max: $100k
Entry: $6k
Max: $20k
Funded Account Size Entry: $10k
Max $200k
Entry: $25k
Max: $100k
Entry: $24k
Max: $80k
Challenge Period 30 Days, but 2nd round verification required with stricter conditions No Time Limit (3 month inactivity timeout) 6 Months (or less)
Profit Share 80% base and 90% on profits above 25% ROI 60% base, Scale Up1 70%, Scale Up2 80% 50%
Overnight / Over-Weekend Positions Weekday overnights permitted, NO weekend positions Weekday overnights permitted, NO weekend positions Overnights and weekends are permitted
News Trading / Restriction Some news releases are restricted for trading none none
Minimum Trading Days 10 days none 20 days
Daily / Weekly / Position Loss Limit Entry: $500 (Daily)
Max: $10,000 (Daily)
-2 % max loss per position
-3 % max loss for all open positions
-2 % max loss per position
Maximum Loss Limit Entry: $1,000
Max: $20,000
Entry: $1,250
Max: $5,000
5% trailing drawdown
6%
Profit Target Entry: $1,000
Max: $20,000
Entry: $2,000
Max: $8,000
Entry: $375
Max: $1,400
Refundable Fee Yes no no
Platforms MT4, MT5, cTrader MT4 MT5
Notes If you do not pass the challenge, but didn't violate any risk rules, your next challenge is free Stop loss orders must be attached to every position and pending limit order Live account evaluations and earning from evaluation carry forward into your funded account.
Cost Per Attempt: Entry: €155
Max: €1080
Entry: $125
Max: $350
Entry: €235
Max: €745
Cost Per Month: n/a n/a n/a

And finally, my own thoughts and recommendations on the above companies:

They are all marketing-heavy, which is fine, but it's important not to get caught up in flashy numbers. When a scouting program advertises $100k of buying power in Forex, that's just 1 standard lot, and at 100:1 leverage, that would imply you're trading a $1000 sized account. Perhaps the evaluation fee would be worthwhile for the risk system, structured environment, and training...but judging these programs on just the account balance alone might make some look a bit skimpy.

There's a lot to be said about having accountability and risk controls when you trade, and these programs all enforce it. You may not find value in the profit split or account size (especially if you're well off and already have funds to trade,) but a trader scouting program might just be what gives you the structure you need to find consistency. Simply put, some people just need a stronger framework applied externally to excel in the trading world, and there's nothing wrong with that.

Traders4Traders​

https://traders4traders.com​

Traders4Traders has ok conditions but the 2nd worst profit split available. Their offering compliments an array of paid courses, coaching, and programs. However, the cross-selling here is a bit heavy.


5%ers​

https://the5ers.com

The 5%ers offer something a little different than other programs, as you are trading a live account during your trial. The risk controls on your trial account are strict to reflect the real money in play and don't expect to be able to lose more than you've paid for your trial, but forcing good risk management isn't a bad thing.

I've highlighted The 5%ers "low-risk" plans in the comparison table. Pay attention to the leverage offered, as the account balances might sound high upfront but the leverage is set lower so your total buying power might equal what other firms offer with smaller account sizes. In the end, your max risk, targets, and buying power are the metrics that matter when comparing.

While the profit split is the lowest of the group at only 50%, the upside at The 5%ers is how their evaluations are done on live accounts and any profits you earn during the evaluation get rolled into your funded account once passed. Also, unlike other firms where you can increase your account risk by retaining earnings in the firm, this firm will increase your account based on performance (and quite aggressively at that; a funded trader could see 2x the capital allocated to them after 10% returns on a funded account.)


FTMO​

https://ftmo.com

FTMO is a strong candidate here as their payout is the highest of the group at 70% + and they offer additional trading platforms like MT5 and cTrader. Further, FTMO provides trader workshops, webinars, community interaction, and some coaching. Their main drawback is the restriction of trading during most high-impact news releases.


Conclusion

Personally, if I were going to seek funding through a scouting program, I'd break my choice into two categories:

If I was looking for a structured way to learn with training, community, and webinars: I'd likely go with FTMO for their more comprehensive offering and better payouts. New traders should lean in this direction.

However, if I was looking to manage a larger account to scale an existing strategy, The 5%ers fits really well here.


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