As a newbie trader, you must consider a few things while choosing a prop trading firm. Your selected firm is so much more than a simple service provider. Your chosen prop firm is a business partner with the power to help you on your trading journey. With that said, your trading success primarily depends on your skillset and discipline; however, the right prop trading firm can have a massive impact on your success. Here are some of the biggest red flags to look out for when choosing a prop firm.
The Firm Has Anonymous Teams
The first red flag that you should look out for is when the prop firm has anonymous teams. The thing with choosing a prop firm is that trust is a crucial factor; without trust, you cannot form a partnership. With reliable prop trading firms, you will find transparency, which means that the firm will be ready to provide you with information about its potential leadership and team members. The trading firm will only hire seasoned professionals with established track records in the trading industry.
Watch Out for Bad Reviews
You should never ignore bad reviews and bad ratings, as people share their experiences on respective review platforms and social media channels. Nonetheless, we cannot ignore the fact that fake reviews are incredibly common and also frequently used by prop trading firms. With that said, you might want to avoid a prop firm if it has nothing but amazing five-star reviews that sound overly enthusiastic. Understandably, fake reviews are created with the intention of establishing fake trust and diverting the attention of potential customers from genuine issues that other traders might have faced.
Bad Customer Support
As a newbie trader, you need to be able to rely on good customer support. With that said, reliable customer support is essentially the backbone of any reliable, professional, and trustworthy prop trading firm. As a beginner trader, you will be heavily relying on effective and timely assistance to address any issues that might arise during your trading experience.
A reputable firm prioritizes its traders over everything. Make sure that the prop trading firm of your choice offers multiple support channels, including live chat, email, phone, and effective communication channels, such as Telegram, to establish a smooth user experience and effective customer support.
Poor Trading Platform
Another aspect to look out for as a newbie trader at the time of choosing a prop trading firm is the quality of the platform, along with the server performance. So, look out for the trading platform that is offered by the prop firm, as it is crucial for your holistic trading experience. With a reliable trading platform, you can establish a smooth execution as you will be trading in safe and essentially transparent trading conditions.
Also, look out for the server performance and avoid choosing a prop trading platform that is essentially unstable. If the server has loads of bugs and comes with delays, it will affect your trading performance. Downtime and technical glitches can also affect the trading experience and make you feel frustrated about the potential losses.
Conclusion
At the time of selecting a prop firm, watching out for red flags is crucial, including the setup of unrealistic profits in connection with tight drawdowns. Also, watch for server reliability and excessive slippage, as these can make trade profitability challenging.
