How to Start a Forex Prop / Proprietary Trading Firm

IMPORTANT UPDATE: MT4 and MT5 are no longer available to unlicensed prop trading firms. If you wish to launch a prop firm, you must now explore alternatives. Contact us to discuss our technology.

The emergence of forex & CFDs into the same class of assets as stocks, bonds, and futures has raised both demand and interest in establishing a prop firm that focuses on FX & CFDs. Although the asset class may be relatively new, the general concept of a proprietary trading desk remains the same. Atomiq Consulting can guide your venture with all the necessary components needed to establish a prop firm: the white label technology, liquidity, and guidance related to licensing.

What Is a Forex Prop Desk / Proprietary Trading Firm? 

Prior to jumping into the components, it’s useful to define exactly what a prop firm / proprietary desk in the forex market is. Essentially, a forex prop desk consists of a group of traders, either professional or amateur, who actively manage a live trading account on behalf of either investors, a private entity or both. The traders are chosen by the firm and are given a set of benchmarks to follow, which vary from firm to firm. While each prop desk is unique, some can be quite harsh environments where failing to meet performance standards or dropping below equity thresholds can find a would be trader packing up their desk. The goal of the prop-trading firm is simple: to generate consistent profits for the founds or outside investors.

Establishing a Forex Prop-Trading Firm – How Does It Work?

  • The first step in the process is selecting the white label technology for the prop trading firm. Atomiq Consulting can provide several, unique software offerings to choose from.
  • Once the white label technology has chosen, it’s important to either register the business or obtain a license. The choice will depend on a variety of factors that our team can assist your firm with.
  • Once a company has been established, it’s then possible to obtain liquidity for the forex prop trading firm. The liquidity serves two purposes, providing both the pricing and the execution of trades.
  • If your proprietary trading desk requires a website and investor CRM portal, that’s also a service Atomiq Consulting is able to provide.
  • Once the above components have been fulfilled, your forex prop desk is ready to launch!

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Some Thoughts to Consider About Starting a Forex Prop Desk / Proprietary Trading Firm 

  • A money management license isn’t required but strongly recommended
  • We strongly advise against targeting US clients as our CEO discusses on the TradeInformer podcast
  • It’s not necessary to build your own trading software; Atomiq Consulting provides white label services for new forex prop firms
  • All that’s needed to start are the white label technology, a website, bank account and liquidity, that’s it
  • Atomiq Consulting also offers advanced technology to help monitor individual trader performance including circuit breakers when equity thresholds hit a certain level

Contact Us Today for a Price Quote and Software Demonstration!

To learn more about starting your own forex prop shop, view a demo of our trading technology or to ask any other questions, don’t hesitate to contact us today!

    Launching a Forex Prop Desk FAQ

    Can I run a prop firm using MT4 or MT5?

    No, in the summer of 2022, MetaQuotes changed their internal policy for white labels. A financial license is now required in order to use their technology. We have prop trading technology we can show you, contact us for a demo.

    How are proprietary trading desks normally financed?

    There are 2 main ways a prop desk is financed. First, it can simply be established by private investors. Secondly, financing can come from external investors who are not shareholders of the prop trading firm.

    Is a license required to establish a forex prop trading firm?

    No, and in some cases it isn’t necessary. If your prop firm is looking to attract outside investors, then a license is strongly recommended for the purposes of credibility. Additionally, attempting to raise funds without a license will pose many hurdles due to overall banking challenges in the financial services sector.

    How quickly can I start a forex prop shop?

    The technology set up is a very fast process. Although other components such as licensing and banking are region dependent, on the technology and liquidity side, the entire system could be established in a matter of weeks.

    What technology is needed to run a forex prop desk?

    Any forex broker trading software will be sufficient for end users. Additional software is needed though to set “circuit breakers” on traders, analyze drawdowns and allocate performance. Atomiq Consulting can help your prop desk get set up with all the technology needed to launch the venture.

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