Until recently, retail prop firms were firmly in the hands of unregulated businessmen, frequently arriving from industries that have nothing to do with trading. They came, and they conquered. They were able to do so at the expensive of retail traders, because retail prop trading is unregulated area of the CFD and Forex trading arena. To explain why the authorities have not yet put the industry under regulation, is because no client deposits are handled.

As many retail CFD and FX traders will be away, there have been some huge scandals, with various prop firms going broke and traders not receiving the payouts that they were due sometimes amounting to millions of dollars.

Some prop trading firms appeared almost overnight, stayed for a matter of weeks and due in part to lack of risk controls, and due in another part to fraudulent practices closed and vanished without a trace.

The latest development in the arena of CFD and FX prop trading firms has been the arrival of well-known and well capitalized FX brokers. Brokers who are well known in the marketplace and brokers who have added prop trading to their overall umbrella of offerings be it straightforward FX broking, education, social copy trading, or the multitude of trading platforms which are now available.

I recently reviewed a newcomer to the prop trading firm arena namely DNAFUNDED, they are part of a group which includes Eightcap, they have an MT5 and CTrader licence and use Trade locker as well. They are also part of Focus Markets.

I was quite excited that as well as Oanda and IC markets and some others which I will review this broker backed prop firm space was starting to take shape and gave them a positive review on first look.

However, with the arrival of these companies, their risk departments and risk managers have also arrived. These people are battle hardened FX brokers and they know that to survive they have to control their risk in the case of disorderly markets, for example the Swiss National Bank rate move in 2015 and in the case of trader funding if the there are too many winners. And they suffer from huge payouts.

The industry statistics point to the fact that actual payouts occur around 7% of the time and that fully funded traders last around 22 days.

I understand that companies need to manage the risk and this healthy for all traders who will use the services of these broker backed prop trading firms.

However as regards DNAFUNDED there are two aspects of their TC’s I do not like. The first is in respect of ‘News Trading’. The second is ‘Payout Caps’

Please see the video YT for the detail of what this means.