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Stock Market  Prop Trading

I Regularly Trade Over $1M In Stocks Without Spending A Single Dime Of My Own Money: Here’s How You Can Do It Too

Today I’m going to introduce you to Prop Trading, teach you how to master it, and show you how to get a risk-free $100k stock or options trading account.

Written by Michael Patton
Founder of Funder Trading
Published December 05, 2024 at 9:05 a.m. ET
Coach, Founder and Professional Prop Trader, Michael Patton
The stock market is a fast-paced, exhilarating world. When you play your cards right, it can be a place of great reward.

But this environment takes no prisoners – it can be volatile and fraught with risk, even for experienced traders like myself.

So it’s no wonder that, now more than ever, people are reluctant to put their own money on the line.

When people find out that my trading group regularly trades over $1M of someone else’s money, I typically get a confused, unbelieving stare in response.

And it doesn’t surprise me – the idea of trading 7 figures, without taking losses, and getting a neat cut of the profits in return sounds almost too good to be true.

But it is true. It all happens thanks to something called prop trading.

Today, I’m going to walk you through what prop trading is, and how you can master it for yourself. I’m also going to break down the simple steps that you can take to get your own $100k risk-free fully-funded stock or options account.

If you’d like to jump straight in and see if you qualify for this account, click the button below and take the quiz.
The reality of trading is that the more capital you have to trade with, the bigger the potential reward.

For most of us, that fact stings a little bit. The average American can only dream of having enough disposable income to sink large sums of their hard-earned money into stocks.

But nonetheless, facts are facts - let’s take a look at some numbers so I can better illustrate to you the power of using a larger trading account:
Now, it might feel like I'm twisting the knife a little bit. Trading 6-figure sums is a far away dream for most people.

But it doesn’t have to be - and this is where prop trading comes in.

Prop trading gives you the opportunity to access a larger funded trading account. This means that you get the freedom to trade bigger positions, and potentially achieve substantial profits.

This type of trading is what got me to where I am today; it took me from being freshly unemployed after the 2008 crash, to now trading over $1m without having to take any of the losses.
Prop Trading 101: What Is It, And How Does It Work?
Proprietary trading, or prop trading for short, is when a financial institution uses their own capital to buy, sell, and trade securities.

Many firms offer individual traders (like you) the opportunity to take part in this.

Their core goal is to find competent traders to trade on the firm’s behalf, and split the profits with them.

But this involves big money - firms are, unsurprisingly, very selective about who they allocate their funding to.
In order to weed out the duds, firms will set up public challenges that prospective traders must pass in order to receive funding.
Note: Later in this post, I’m going to give you my top 3 strategies to outsmart prop firm challenges - including my own. Click here to take the quiz and see if you qualify for our TrueEdge Challenge.
How Do Traders Benefit From Prop Trading?
As we’ve already touched on, the single biggest barrier for traders (experienced or otherwise) is a lack of disposable capital.
See, there are plenty of people out there who have the skills and knowledge to make an absolute killing on the stock market - and more than likely, you are one of those people.

But these traders typically fit into one of two categories:
  • Those who simply do not have the money to make trading worthwhile, or
  • ​Those who don’t want to risk their own money.
Prop trading firms recognise this, which is why they are willing to put their own capital on the line; they can see that there is an absolute goldmine of untapped profit potential in both types of traders.

If you’re a competent trader who fits into one of those two categories (or potentially both), prop trading is beneficial because it solves both of those issues:
  • Those You gain access to a large amount of funding - without taking out a loan and paying sky high interest, and
  • ​You’re trading on behalf of the firm - you take none of the losses, and therefore none of the risk.
By becoming a prop trader, you get all of the benefits of trading with a large account, with none of the downsides.
And the benefits to you only increase as you prove your trading capability.

When a firm decides to fund you, the account you are given is typically in the ballpark of $100k - but this is just a starting point.If you’re successful, a good firm will give you the chance to trade higher amounts of capital.

Your initial $100k account could turn into $250k, $500k, or even $1mil of risk-free funding.

Pretty neat, right?
What’s In It For The Prop Firm?
So, we’ve established that prop trading can be a lucrative pursuit for individual traders - but what about the firms? What do they get out of this deal?

It’s important that you understand why firms like mine are willing to offer fully funded six-figure accounts to trade with. 

Because most people see this type of offer, think it must be a scam, and don’t bother to pursue it any further.

But it’s no scam - prop trading is a legitimate industry that has given many people the opportunity to turn trading into a sustainable income stream.

The key thing to understand is this: the benefits of prop trading go both ways - it’s a win-win scenario for both the individual trader, and the prop firm.

There are two main ways in which a firm benefits:

1. Charging a start-up fee upon joining the trading challenge: the trader typically gets the opportunity to recoup this fee once working with the firm, but some shady firms have found loopholes - we’ll get to that in a minute.

2. Entering into a profit split with their traders: the ratio of this split can vary depending on the firm - the best you would find with most firms is 70/30, with the majority going to the trader. (Sidenote: here at Funder Trading, we do much better than that - our members get to keep 80% of their profits.)

At first glance, this may not sound like much of a money spinner for big financial firms. But the way they bring traders on board is designed to all but guarantee they make a profit - let me explain:

Remember earlier when I said that firms create trading challenges for prospective traders to beat? This is exactly why they do it.
Trading Challenges: What Are They And Why Do Firms Set Them?
Typically, a trading challenge involves using a simulated account to achieve a specific return within a set time frame, without incurring significant losses.

In other words, you will only be given access to a prop firm’s actual capital if you can demonstrate your ability to trade profitably.

This method of recruiting traders ensures that firms end up with only the most skillful, competent people trading their capital; and the better the traders, the bigger the profits.

The trading challenge also levels the playing field for traders - no matter your experience level or the size of your own personal account, if you can pass the challenge, you’re good to go.

All in all, prop trading can be extremely rewarding and lucrative for both firms and, more importantly, individual traders like yourself.

But notice that I said it can be - whether prop trading is equally beneficial for both parties or not really comes down to your choice of firm.

Don’t Make The Same Mistakes I Did: Here’s What You Should (And Shouldn’t) Look For In A Prop Firm

I’ve been in your shoes before - when I first dipped my toes into the world of prop trading, I was a complete beginner.

Needless to say, I made plenty of mistakes. I want to take this opportunity to make sure you don’t do the same.

Because unfortunately, despite the legitimacy of prop trading itself, there are a lot of shady companies in this arena. As a beginner, it’s very easy to get taken for a ride.

These firms know very well that prop trading is a relatively unknown business. Most traders are newbies who are unaware of what’s normal and fair, and what’s not - and some firms will take full advantage of this inexperience.
Red Flags To Watch Out For
There are two main ways that beginner prop traders get tripped up by firms:

1. Overblown buy-in fees coupled with a low trader acceptance rate:

Some firms have found that they can swindle newbie prop traders by charging a hefty upfront application fee (sometimes up to $100k), and capping the number of traders they bring on board.

When they limit the amount of traders who get accepted, they are deliberately limiting the number of people who can potentially recoup their buy-in fee.

This means that the firm gets to pocket those fees entirely.
Imagine it: 100 people pay to compete for 5 spots.

That’s 95x the startup fee that goes directly into the firm’s pocket.

Not to mention the 95 people who will never even get the chance to claim their money back. Ouch.
2. Smaller firms that offer smaller amounts of funding:

Most small firms aren’t able to provide the level of support and resources that their members need to build on their trading skills and knowledge (this is something I unfortunately had to learn the hard way).

And because they lack the capital to provide larger amounts of funding, traders aren’t able to make big moves.

When you combine a lack of resources with a lack of funding, your chances of making a worthwhile profit are slim to none.

Another common thread with smaller firms is that most of them only let you trade Forex or Futures - both of which are very risky for the average trader.
Note: Here at Funder Trading, we do not encourage the high-risk trading of things like Forex, Futures, or crypto.

You can trade big names stocks or options like Tesla and Amazon - meaning you can make big moves with less risk. Click here to find out more.
Aspects Of A Firm You Must Evaluate
The most effective way of covering yourself is to take the time to research a firm before you work with them.

There are a few key areas that you should evaluate as part of your decision-making process:
  • The firm’s track record of performance and trader feedback: Pay attention to reviews from traders, and how they felt about their experience with the firm.
  • ​Their costs and fee structure (before and after getting funded): Are their fees reasonably within your budget, or will application break the bank? And will you get the chance to recoup your fees once you pass their challenge? 
  • ​Their profit-sharing ratios (what portion of the profits you generate will you actually get to pocket?): Are you getting the majority of the profit you generate? Would you be happy with the offered split? 
What You Should Look For In A Prop Firm
Once you’re satisfied that a firm is trustworthy, reliable, and fair, there’s one final criteria you should seek to evaluate: the quality of their training, tools, and resources.

This is the single most overlooked aspect of selecting a firm, and it’s the one that has the biggest influence on your success as a prop trader.

When I was starting out (and even as I gained experience), a lack of support and resources from prop firms was the number one thing that kept slamming the brakes on my trading success.

The frustration of that was what ultimately led me to starting up my own firm - so I can’t stress to you enough how important this final criteria is.

Some of the resources you should expect from a good prop firm include:

Proprietary Platform

A reputable firm will offer a custom platform for participating in their funding challenge.

The quality of said platform is a significant indicator of the firm’s credibility. Features you should keep an eye out for include real-time charting, customizable indicators and watchlists, price alerts, and access to high-level market data.

Dashboard

A comprehensive dashboard gives you the ability to analyze your trading performance, identify areas that are in need of improvement, and work toward exceeding your profit targets.

When you have this crucial data on-hand, you can make informed decisions, track your progress, and stay motivated in the pursuit of your trading goals.

Education Campus

Your chosen firm should provide high-quality educational resources that allow you to enhance your trading skills, and increase your chances of passing the challenge.

A well-equipped education campus offers valuable insights, training materials, and support to sharpen your trading strategies.

Support Desk

Having real-time access to a dedicated support desk is invaluable during your onboarding process and throughout the funding challenge.

A good firm will have a reliable support team to promptly assist you when needed. This will help ensure a smooth and hassle-free experience, and allow you to focus on your trading performance without being hindered by technical issues.

The Funder Trading Advantage.

By joining Funder Trading, you gain access to cutting-edge tools, state-of-the-art trading software, and a U.S.-based help desk for immediate support.

Plus, you will have daily access to live coaching and mentorship from me, Michael Patton - a seasoned prop trader with an extensive track record of success.

So if you're interested in securing a risk-free $100,000 funded trading account with Funder Trading, click the button below, take the brief quiz, and see if you qualify for the challenge.
Trade our money - not yours.
How To Beat The Trading Challenges: My Top 3 Strategies
The only way you’re going to get funded as a prop trader is by beating the trading challenges - so that’s exactly what I’m going to teach you how to do.

I’ve completed quite a few of these challenges myself over the years, as well as setting them for my own prop firm.

Keep in mind that you absolutely do not need to be an experienced trader to pass trading challenges - you just need the skills that I’m about to teach you.

These three strategies are a pretty safe bet for successfully passing the trading challenges of most firms - including that of my own firm.

This section is essentially the blueprint for passing the Funder Trading challenge, and getting a fully-funded, risk-free, $100k stock or options account for yourself.

Trading Challenges: A Quick Recap

  • The purpose of completing a trading challenge is for you to demonstrate to a prop firm that you are able to trade profitably
  • The firm will give you access to their trading platform, along with a simulated account to trade with (usually around $100kExplain the benefit of your products
  • You get about 30 days to generate a specified return without taking any major losses (typically a 5% - 10% gain)Change the icons in the settings
  • ​ As long as you place enough trades and don’t take any big losses, you will get funded at the end of the 30 days
Strategy #1: How To ‘Scan’ For Stocks Primed To Make Large Moves Up
In essence, this first strategy is focused on learning how to properly scan for the stocks you should be trading.

Ideally, you want stocks that are likely to make big moves up, with minimal downside.

I have a few basic criteria that I use to identify these stocks. You can use this list as your cheat sheet for scoping out stocks to track:

Stock Scanning: The Basic Criteria

  • More than a 10% move in the last 7 days
  • ​300,000 shares of minimum daily average traded volume in the last 10 days
  • ​Minimum share price of $1.50
This list of criteria will allow you to build your initial list to track during the week.

It’s by no means where you should stop your scanning, but it will give you a nice foundation to build on.

Now, working off of this list alone doesn’t fully scan for what I want, but even for me it’s a solid start.

In reality, I spend thousands of dollars every year on software that will scan for exactly what I’m looking for.

Pro Tip: I give all of our Funder Trading members access to my comprehensive daily list of stocks that I believe are about to make a big potential move - even during the the TrueEdge Challenge. Click here to learn more.
Strategy #2: How To Know The Exact Time You Should Buy
The key to this strategy is to look for huge pre-market volume.

When I say huge, I mean it - the absolute minimum you want is 500k shares traded. In reality though, the numbers we really want are more like 1mil+ (ideally, you could make that 10mil+).

When a stock has this type of volume, it triggers my radar, and I pull up the chart.

I then add three lines to my chart:
  • A purple line to represent the VWAP - Volume Weighted Average Price
  • ​A gray line one standard deviation above the VWAP
  • ​Another gray line one standard deviation below the VWAP
This creates the VWAP channel. We’re looking for the stock to swerve in and out of this channel - this tells us what our next move should be.

Our indicator buy is when the stocks break out of the VWAP channel, to the upside.

Let me show you this in action.

Here’s an example of Cosmos Health Inc. (COSM). This one had a HUGE pre-market volume, so it really piqued my interest.
This is a 1 day, 5 minute chart of COSM.
You can see that the candles were stuck inside the VWAP channel (left of the yellow arrow).

Shortly after, the candles began to swerve out of the VWAP channel, to the upside:
This swerve up was my trigger to get in.

Then, take a look at what happened next:
There was a massive breakout - the COSM 5x’ed in one single day!

I was able to get in on this huge gain because I;
  • ​Knew the right stocks to look for (i.e. big pre-market volume), and
  • Knew the right trigger to use (the VWAP channel).
Let me show you another example that will segue us nicely into my final strategy.

Here’s a 1 day, 5 minute of MRNA:
If you look to the left of the yellow arrow, you can see that the stock broke down below the VWAP channel about halfway through the day.

Then, the stock rallied. It surged above the VWAP channel, so I bought in.

You can see to the right of the yellow arrow that the stock continued to rally for hours following my entry.

I was onto a good thing with this one - so how did I know when to sell?
Strategy #3: The Red Flags To Look For That Will Tell You When To Sell
My strategy for knowing when to sell is pretty straightforward - we simply flip the strategy for when to buy.

When you see the candles swerving down, back into the VWAP channel, this is when you get out.

If we go back to our MRNA example:
See where the yellow arrow is? This is where I applied Strategy #2, and decided to buy after the stock broke out of the VWAP channel to the upside.

After rallying for a few hours, the stock began to break down back into the channel - here’s a closer look
Seeing those candles swerve back into the VWAP channel was my indicator to get out before it continued to the downside, and I lost my gains.

Sure enough, MRNA continued to break down over the rest of the day.

Knowing what signals to look for, and listening to them, meant I was able to cut my losses early, and pocket my secured profit.
So, to recap - there are three key strategies you must know how to implement if you want to pass a trading challenge. You need to know:
  • ​How to spot potential big movers,
  • Exactly when you should buy, and
  • ​The signs you need to get out.
Here’s a summary of my trading challenge strategies. Keep this on hand when you sign up for your first challenge:

Mike’s Trading Challenge Strategy Cheat Sheet

Strategy #1: How To ‘Scan’ For Stocks Primed To Make Large Moves Up

Look for stocks that meet the following criteria:
  • More than a 10% move in the last 7 days
  • 300,000 shares of minimum daily average traded volume in the last 10 days
  • Minimum share price of $1.50
Strategy #2: How To Know The Exact Time You Should Buy
  • Create the VWAP channel by adding three lines to your chart: the VWAP, one standard deviation above, and one standard deviation below
  • When you see the candles break out of the VWAP channel to the upside, this is the time to buy
Strategy #3: The Red Flags To Look For That Will Tell You When To Sell
  • When the candles break down, back into the VWAP channel, it’s time to get out

Conquer The Market With Confidence 
And $100k Financial Backing.

We pride ourselves on being a close-knit community of traders who genuinely support each other.

That's why we carefully select individuals who are the right fit for the Funder Trading Challenge.

See if you qualify in securing a risk-free $100,000 funded trading account with Funder Trading by clicking the button below.

But you must act fast - spots in our challenge are extremely limited, and this could be your best chance to become a funded trader.

Trade our money - not yours.
Trade our money - not yours.
Put My Strategies To The Test: Beat The Challenge And Get A 100k Funded Account
If you’ve made it this far, you should now:
  • Have a basic understanding of the fundamentals of prop trading.
  • ​​Know exactly what to look for in a firm, and what to watch out for, and
  • ​Have a range of strategies to help you beat the trading challenges, and get funded.
In a nutshell, I’ve given you all the tools you need to become a successful prop trader.

Now all you have to do is put these tools to work.

From here, your next step will be to find a prop firm to work with. You’re going to need a reputable firm that provides all the support and education you need to succeed as a prop trader.

This is exactly what we do here at Funder Trading.

Now, I know I’m biased, but I truly believe that Funder Trading stands head and shoulders above other prop firms - here’s why:
When you work with Funder Trading, here’s what you get:

Funder Trading

My number one goal is to get you funded. Here at Funder Trading, we provide the support and help you need to do exactly that.

During the TrueEdge Trading Challenge, you get access to:
  • Coaching and guidance from me, Mike Patton - every day I host trading lessons in our Live Trading Room. I’ll teach you what’s going on in the market, as well as giving you access to my daily list of names that you should keep your eye on.
  • ​​Comprehensive, personalized dashboard - you’ll be able to track your progress through the challenge, and smash your targets.
  • US-based, responsive help desk - our team will go above and beyond to provide the support and assistance you need to thrive.
  • ​Dedicated risk manager - a risk manager will monitor your trades, and prevent you from making any major mistakes.​
  • ​Access to our education library - you’ll get 60+ videos worth of high-level trading training, allowing you to become the best trader you can possibly be.
And when you pass our challenge and become one of our traders, you get:
  • A fully-funded stock or options trading account - we are the first, and only firm to offer a funded options trading account, WITHOUT needing to be licensed, or put up your own capital.
  • 80% of the profits you generate - our 80/20 profit share means that our traders actually get the slice of the pie that they deserve.
  • Access to our state-of-the-art trading platform - our platform offers full access to low-latency execution, real-time market data and position management, customizable watchlists, price alerts, SMS alerts, real-time position management, P&L, and account values.​
Note: In the live training sessions, you’ll learn some of the top trading strategies for proprietary traders in real-time. I will teach you how to spot trade opportunities, and master risk management skills, and more importantly – get funded. Click here to learn more.
You Now Have A Choice…
So…What’s next? In my opinion, you now have 3 options.

OPTION #1 - Do Nothing.

You continue to trade on your own, without any additional funding. This can be a super-risky option, and it really hampers your potential for higher earnings.

Right now the trading landscape is far from favorable. Unless you've been living under a rock, you'll know that it's a difficult time to be risking your own money trading.

If you lost money trading on your own this year or even last year, who's to say that's not going to go the same way again. And by not securing extra capital for trading, you're significantly limiting your income potential.

OPTION #2 - Get Funding Elsewhere.

While there are alot of great companies in our space, there aren't many reputable companies that allow stock trading…
and absolutely none that offer options. So you're out of luck there!

You could try to take out a loan to get funded for your trading.

However, the expenses will soon pile up - you can pay upwards from $7,000 to $36,000 just in interest fees, and that's if you're even able to get access to that type of capital.

And on top of all that, you still have to cover all the losses on your own.

OPTION #3 - You Decide To Move Forward With Funder Trading.

Get access to cutting edge tools and software to conquer our challenge, and have a great shot at getting access to a risk-free $100k funded trading account with us.

Don't forget, we’re the only prop firm to offer stocks AND options funding without needing licensing or upfront capital AND we offer coaching to help you pass our challenge.

Here's the reality...if you're concerned about whether you have what it takes to pass the challenge, just remember that I literally designed the challenge myself. I'm offering everything I can to help you be successful. I created this challenge, and I want to show you exactly how to beat it.

Your Journey To Trade A Risk-Free $100k Funded Trading Account Starts Here.

The TrueEdge Challenge is designed to effectively train, test and fund all types of traders, from beginner to advanced.

With access to professional prop trading software, live coaching, online education, advanced market data, automated risk management and rules to support your growth – our all-in-one system provides everything you need to become a successful funded trader.

It’s time to take your trading skills to the next level!

Click the button below and take the quiz to see if you qualify for our TrueEdge Challenge, and take your first step to becoming a profitable funded prop trader.
Trade our money - not yours.
Michael Patton
Founder of Funder Trading

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