FTMO remains the benchmark after 10+ years of verified payouts and a transparent Czech corporate structure — its trailing drawdown locks at the initial balance once your equity hits +10%, which is a meaningful hybrid and easier than a true trailing structure. TopStep and Apex Trader Funding occupy a distinct, more regulated niche in exchange-listed CME futures, not spot forex. E8 Funding and The5ers are credible mid-tier alternatives with bi-weekly payouts and a growth-account model respectively, but carry shorter track records. MyForexFunds — once the largest firm in the category — was shut down by the CFTC and Ontario Securities Commission in August 2023 with approximately $310 million in client funds frozen; that collapse is the reference point for every counterparty-risk assessment in this space. An evaluation fee is not an investment and is at risk.
How we evaluated these firms
We evaluated each firm across six criteria: continuity risk (operating history, verified payout record, corporate transparency), payout model (split percentage, frequency, crypto withdrawal option), drawdown type (static vs trailing — trailing is materially harder and the distinction is frequently undersold in marketing copy), fee refundability on first payout, trading platform (MT4/MT5, cTrader, or proprietary — platform availability affects strategy compatibility), and news-trading rules (a ban on news trading eliminates an entire class of legitimate edge).
We do not accept payment for rankings or listings. Every fact below was verified against primary sources and community evidence (Reddit r/Forex, Trustpilot, official T&Cs) as of June 2026. Prop firm terms change frequently — always read the current version before paying a challenge fee, and screenshot the rules page on the day you start. Nothing in this guide is financial or investment advice.
The MyForexFunds collapse — the mandatory starting point
On 30 August 2023, the US Commodity Futures Trading Commission and the Ontario Securities Commission filed emergency actions against Traders Global Group Inc., operating as MyForexFunds. Approximately $310 million in client funds were frozen. The founder faced fraud allegations. The CFTC's core claim was that MFF's payouts were funded not from live trading profits but directly from incoming challenge fee revenue — a structure the regulator characterised as fraudulent misrepresentation. The firm had over 135,000 clients globally at the time of shutdown.
MFF had been the market leader in 2022–2023, with aggressive marketing, high payout splits, and rapid growth. None of those indicators protected clients. The lesson is structural: the retail prop model funds payouts from fee income and retained risk, not from live market positions at most firms. This is legal when disclosed honestly. It becomes fraud when the disclosure is absent and the T&Cs are altered post-challenge to reduce payout likelihood. Before engaging any prop firm, verify: the registered company name and jurisdiction, at least five independently verified payouts with partial transaction references, and check Reddit r/Forex for payout delay patterns in the last 90 days. Growing fast is not evidence of legitimacy.
FTMO — the benchmark, and why trailing drawdown still matters
FTMO was founded in 2015 in Prague, Czech Republic, making it the longest-operating retail prop firm in this review. It is incorporated as a technology and evaluation company, not a broker. The Czech National Bank reviewed its model and found it did not require a securities dealing licence because traders are paid from a service (the evaluation fee) rather than from execution of financial instruments. That regulatory clarity has held for a decade — a meaningful differentiator from firms registered in St. Kitts and Nevis or other low-scrutiny jurisdictions with no equivalent analysis.
The challenge structure is two-step only: 10% profit target in Phase 1, 5% in Phase 2, with a 5% daily drawdown limit and a trailing maximum drawdown of 10%. The trailing mechanism is the detail that catches experienced traders: it follows your peak equity, not your starting balance — but it locks at the initial balance once you have grown your account by 10%. In practice, if you start a $100,000 account and grow to $110,000, your drawdown floor rises to $100,000 and then stops moving upward. This is a hybrid trailing structure and significantly more forgiving than a true trailing drawdown that continues following your equity indefinitely. The payout split starts at 70% and scales to 80–90% after demonstrated consistency. The challenge fee is refunded on first payout. Aggregate funded capital cap is $400,000. MT4 and MT5 are supported; cTrader is available on select servers. News trading restrictions apply — check current T&Cs for the specific window (typically 2–5 minutes around high-impact events).
E8 Funding, The5ers, TopStep, and Apex — the alternatives
E8 Funding is registered in St. Kitts and Nevis, which carries less regulatory transparency than FTMO's Czech structure. It offers two-step, one-step, and instant funding options with a scale-up programme targeting up to $1 million in capitalisation. Payout splits reach 80%, with bi-weekly payout cycles — a cash-flow advantage for active traders. Community sentiment on Trustpilot and Reddit is generally positive as of mid-2026, but the track record is shorter than FTMO's. The firm's name comes from its 8% profit cap per cycle in certain account types — read which account type you're evaluating before comparing to other firms on split percentage alone.
The5ers operates a growth account model that sets it apart structurally: traders receive a funded account from day one (starting at $4,000–$20,000 depending on programme) with the account growing through performance milestones rather than a multi-phase challenge. The entry barrier is lower and the funded period begins immediately, but the starting capital is smaller. This suits traders who want live funded exposure quickly and are willing to build from a smaller base. TopStep and Apex Trader Funding are fundamentally different products: both operate in exchange-listed CME futures (ES, NQ, CL, and other contracts), not spot forex or CFDs. TopStep's structure pays 90% of profits after the first $5,000 (which goes 100% to the trader). Apex runs one-step evaluations with frequent promotional discounts of 80%+ on challenge fees. Because futures are exchange-listed instruments on the CFTC-regulated CME, these two firms operate in the most regulated environment available in retail prop — but they are only relevant if your strategy works in futures, not spot forex.
Drawdown types explained — trailing vs static, and why it matters more than the split
The payout split gets the marketing attention. The drawdown rule is what actually determines whether you get paid. A trailing maximum drawdown — used by FTMO, Apex, and most other firms — means your drawdown floor moves with your equity peak. Start at $100,000 with a 10% trailing drawdown: your floor begins at $90,000. Grow to $105,000: your floor rises to $94,500. Grow to $110,000: floor is $99,000. Now mean-revert by $12,000 back to $98,000 — you are out, despite having been genuinely profitable at points during the challenge. This is the mechanism that fails swing traders and carry traders who accumulate equity in strong trend phases and then see normal retracements trigger disqualification.
A static maximum drawdown — calculated from the initial balance only, never adjusting — is materially easier. A $100,000 account with a 10% static drawdown has a fixed floor of $90,000 regardless of how high your equity climbs. The specific hybrid FTMO uses (trailing that locks at initial balance once you reach +10%) sits between these two extremes and is worth understanding precisely before evaluating any other firm's trailing structure. There is also the question of whether the trailing drawdown follows closed equity only, or real-time floating equity including open positions. Real-time trailing is the most aggressive form — an open unrealised loss can breach the floor even if you never close the trade. Always confirm which definition the firm uses. Ask support directly and screenshot the answer.
News trading, weekend holding, and the T&C clauses that end challenges
News trading bans are common across the category. Most firms prohibit opening or holding positions within a defined window — typically 2 to 5 minutes — around high-impact economic releases: NFP, CPI, FOMC rate decisions, ECB decisions, major GDP prints. Some platforms enforce this programmatically (the platform auto-closes positions at the news event); others flag violations and review manually after the fact. If your edge depends on news volatility — which is a legitimate and widely used strategy — any firm with a news ban is incompatible with your approach. This is not a matter of working around the rule. Traders who try to approximate their news strategy within a ban window produce inconsistent behaviour and get disqualified at the worst possible moment.
Weekend holding restrictions catch swing traders and carry traders. Firms that prohibit holding over the weekend require all positions to be closed before Friday's session end, exposing traders to artificial urgency and reducing the strategic window available. Check the T&Cs specifically for the words 'weekend,' 'overnight,' 'rollover,' and 'swap' — triple swap on some instruments falls on Wednesday or Friday depending on the broker behind the platform, and this interacts with both the holding restriction and your net position economics. The practical checklist before any challenge fee: read the news clause in full, read the weekend holding clause, confirm whether open floating positions count toward daily drawdown, confirm the trailing drawdown definition, and find five verified payouts from identifiable accounts. Do this before you pay, not after.
- Confirm the registered company name and incorporation jurisdiction
- Identify drawdown type: static, trailing-on-close, or trailing-on-real-time equity
- Read the news trading clause — does your strategy survive it?
- Check weekend holding policy against your timeframes
- Verify challenge fee refundability on first payout
- Find five independently verified payouts with partial transaction references
- Screenshot and save the T&Cs page on the day you pay the fee
Red flags that disqualify a firm immediately
The MFF collapse gave the industry a checklist of early warning signs that were present in hindsight. Payout delays combined with increased moderation of critical posts in the firm's Discord: MFF deleted and suppressed negative payout reports in the months before shutdown. Rules that change post-challenge: if funded traders report that the T&Cs they signed up under were materially altered — drawdown rules tightened, payout windows extended — that is evidence of a firm gaming its own obligations. Opaque corporate structure: if you cannot identify the registered company name, the jurisdiction of incorporation, and the name of at least one principal officer, do not send money.
Discord hype without verified payout proof is a different class of red flag. Any firm whose primary marketing channel is Discord and whose payout evidence consists of unverified screenshots from anonymous accounts should be avoided. Verified payouts show the firm name, a real account number or partial transaction ID, and are posted by accounts with trading history. Payout screenshots are trivially fabricated. A firm offering 95% splits with no scaling requirement and low fees needs to explain how it sustains those payouts — if the answer is unclear, apply MFF-class risk. Guaranteed profitability claims are the most obvious disqualifier: no prop firm can guarantee you will pass a challenge, and any marketing that implies it can is misrepresenting the product.
Not financial advice — understanding what an evaluation fee is
An evaluation fee paid to a prop firm is not an investment. You are purchasing an assessment service — the right to be evaluated against a set of trading performance criteria. If you pass, you receive access to a simulated funded account; your profits from that account are paid from the firm's revenue pool, not from live market positions at most retail prop firms. If you fail, or if the firm ceases operations, the fee is gone. There is no compensation scheme covering this product in any jurisdiction. Dozens of firms closed or suspended operations between 2024 and 2025.
Nothing in this guide constitutes financial advice, investment advice, or a recommendation to trade. Prop trading carries significant risk of capital loss at the challenge stage, and the funded account model has structural counterparty risk that regulation does not fully address. The pass rate on two-step challenges at reputable firms is approximately 5–15%. Evaluate whether this product is appropriate for your situation, trading experience, and financial position before paying any fee. If you are uncertain, consult a licensed financial adviser.
Frequently asked questions
What happened to MyForexFunds?
On 30 August 2023, the CFTC and Ontario Securities Commission filed emergency actions against MyForexFunds (Traders Global Group Inc.), freezing approximately $310 million in client funds and alleging fraud. The CFTC claimed payouts were funded from incoming challenge fee revenue rather than live trading, and that rules were altered post-challenge to reduce payout likelihood. The firm had over 135,000 clients at shutdown. It remains the defining cautionary tale for counterparty risk in the prop firm category.
What is a trailing drawdown and why is it harder than a static drawdown?
A trailing maximum drawdown moves your floor upward as your equity peaks. On a $100,000 account with a 10% trailing drawdown, if you grow to $108,000, your floor rises to $97,200 — meaning a normal retracement of $11,000 from peak could breach the limit even though you're only $3,200 below where you started. A static drawdown keeps the floor fixed at the initial balance regardless of equity growth. FTMO uses a hybrid: trailing that locks at the initial balance once your equity reaches +10%, which is more forgiving than a pure trailing structure.
Is the challenge fee refunded if I pass?
At most reputable firms — including FTMO — yes, the challenge fee is refunded on your first funded account payout. This is a standard differentiator to look for. If a firm does not refund the fee on first payout, you are paying a subscription for evaluation access with no offsetting return on success. Always confirm this in the T&Cs before paying, not after.
Are TopStep and Apex Trader Funding comparable to FTMO?
Not directly — they operate in different asset classes. TopStep and Apex offer funded accounts trading exchange-listed CME futures contracts (ES, NQ, CL, etc.), not spot forex or CFDs. Because CME is a CFTC-regulated exchange, these firms operate in the most regulated environment available in retail prop. They are the right choice if your strategy works in futures. FTMO, E8, and The5ers are for spot forex and CFD traders. The evaluation criteria, drawdown rules, and payout structures are not directly comparable across these two categories.
Can I trade news events on a funded account?
It depends entirely on the firm. Most major prop firms prohibit trading within a defined window — typically 2 to 5 minutes — around high-impact economic releases such as NFP, CPI, and FOMC decisions. Some platforms enforce this programmatically by auto-closing positions. If your edge depends on news volatility, eliminate any firm with a news ban before paying a challenge fee. Do not attempt to work around a news ban — traders who do so produce inconsistent behaviour and typically face disqualification at the worst possible moment.
What is the pass rate on prop firm challenges?
The pass rate on two-step challenges at reputable firms is approximately 5–15%. The most common failure modes are not missing the profit target — they are breaching the daily drawdown limit via intraday floating losses that traders did not model before entering, and trailing drawdown breaches during normal retracement periods after strong equity growth phases. Understanding the drawdown mechanics before starting a challenge is more important than optimising for profit target speed.
Sources & further reading
An independent, regulation-first guide to proprietary trading firms. Our editorial desk verifies every factual claim against primary sources and regulators' own publications, and never accepts payment for a better listing. Nothing we publish is financial or legal advice.