Prop trading refers to a financial company or bank that invests in the stock market on its own behalf. This strategy allows that financial institution to make a direct profit rather than a commission if the negotiations were aimed at benefiting the client. Trading involves the exchange of shares, commodities, currency, bonds or any other financial instrument.
Financial institutions which practice this form of trading have a competitive advantage which allows them to earn a higher annual return than any other style of investment. Indeed, financial companies or commercial banks involved in exclusive dealing believe that they have a competitive advantage.
This should allow them to earn a higher annual return than investing in indices, rising bond yields or other styles of investing. The profits made by these companies are excessive because they very often have an advantage over the average investor in terms of the market information available to them. Moreover, because of the sophisticated software they use, modelling and trading is simplified. To get good results and maximize profits, proprietary traders use different strategies, such as merger arbitrage, volatility arbitrage or index arbitrage. Surgetrader is an exclusive platform offering users trading information and tools with an easy-to-use interface.
How does one become a funded trader?
The first thing you should do is go to www.surgetrader.com and go through the simple registration process, choosing your plan and paying for it. Surge Trader account confirmation procedure takes up to 48 hours. There are two steps to getting a funded account and the first is proving that you can be a profitable trader. This involves completing certain steps, including loss management and meeting your profit target. After that, you need to prove that you can trade not only profitably, but also without much risk. This involves scaling large positions up as well as down, closing positions during economic releases and meeting the weekly loss limit.
The biggest criticism of the account funding program has to do with the fact that the actual account size figures are a bit abstract. Although SurgeTrader says it will fund you for $100,000 or $150,000, you can only lose a smaller amount, which is called trailing max drawdown. For example, on their $50,000 account, the maximum drawdown is $2,000, meaning you can’t have a drawdown of more than $2,000 of your account equity.
Based on SurgeTrader’s own information, they have only funded 1,537 traders with an average weekly profit of $549, and the vast majority of traders are not active at any given time. So we can conclude that SurgeTrader makes most of its money from selling subscriptions to the trading simulator, and for the dream of getting a funded trading account. Nevertheless, without any doubt, SurgeTrader is a great way to test if you are indeed a profitable trader.