FPFX Tech Reveals Key Trends From 300,000 Accounts In The Prop Trading Industry
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FPFX Tech, a fintech company specializing in providing software solutions for prop trading firms, analyzed data from over 300,000 accounts. These accounts belonged to 100,000 traders spread across ten different prop trading companies.
The report showed that 14% of traders passed the initial challenge and secured a funded account. However, only 45% of those with a funded account received a payout, which represents just 7% of all traders involved.
FPFX Tech Aims To Highlight Key Insights About Trader Demographics
Justin Hertzberg, who is the Chief Executive Officer and one of the founders of FPFX Tech, said most traders who get paid earn about 4% of their account size. For example, if a trader has a $100,000 account, they would usually make around $4,000.
Hertzberg also said traders spend an average of $800 on challenge fees and often try three different challenges.
The data showed that most prop trading clients are men, making up 78% of all trader-funded firm (TFF) clients. The report also found that prop trading is very popular with young people, especially Gen Z and Millennials, who make up over 60% of the clients. Additionally, 10% of traders use more than one prop firm, with the average client working with 2.2 firms.
Even though many prop trading firms have limited their services to U.S. clients, American traders still make up the biggest part of the market, at 20% of all active traders.
FPFX Tech Wants To Provide An Overview Of Regional Growth In Prop Trading
According to FPFX Tech, the UK has 10% of the market, and India has 4%. Other areas, including some European countries, share 2% to 3% of the market.
Hertzberg said many more traders are coming from Asia, Africa (especially Kenya and Nigeria), Latin America, and Eastern Europe.
He also stated that FPFX Tech expects to see more traders from the Middle East soon. FPFX Tech plans to start new operations in the Middle East later this year.
Hertzberg thinks prop trading might become a big trend in retail trading. Prop trading moves the job of managing risk and leverage from the trader to the company. This helps traders make more money than they could with their own funds.
He also said prop trading companies need to be checked by regulators. They should have enough money, follow rules, and be clear about how they operate.
