Are prop firms legit?

How much does a funded account cost?

The Standard Path costs $49 a month plus $149 after you pass, which gets you into Topstep's 50K account. What you use for a trading test is a practice account, called an evaluation, and prop firms charge you for it. Your funded trading account becomes available after you pay the activation fee once you pass. Topstep's pricing rules list a total of $198 for passing in 1 month and $247 for passing in 2 months.

At Topstep, the 50K test also costs $95 each month, with $0 due after you pass. Other firms set one price that you pay up front. Breaking a test rule means paying a reset fee to restore your starting balance.

• Tradeify's 50K Growth plan costs one payment of $145, with a $0 activation fee and a $95 reset fee.
• Apex Trader Funding's 25K evaluation costs one payment of $167, and you must reach the target within 30 calendar days.
• Lucid Trading's 50K LucidPro plan costs one payment of $172, with no monthly bill, a $0 activation fee, and a $120 reset fee.
• One payment of $209 covers an evaluation in MyFundedFutures's 50K Rapid, where the activation fee is $0 and there are no renewals.
• You don't need to take a test for Tradeify's $492 50K Lightning Funded account; it provides immediate funding without resets.

Are prop firms legit?

Topstep alone says it has paid traders $1.5B+, based on the company's own reports. FTMO reports paying $650M+ since 2015, Tradeify reports paying over $350 million, and MyFundedFutures reports $300M+ in payouts. Real payouts happen every week at established firms. According to Topstep's beginner guide, the 2025 completion rate for Trading Combines was only 16.8%.

You can never get a refund on test or activation fees, which is how prop firms make money. This isn't investment advice. Evaluations use simulated accounts, and most traders who use them never collect a payout. In 2023, regulators sued My Forex Funds, alleging that over $310 million in fees came from more than 135,000 customers. The complaint said that about $137 million went out in payouts, and the firm lost money when its customers made profits. A US District Judge dismissed that 2023 case in 2025 and also awarded the company attorney fees.

What happens if you blow a funded account?

The firm closes your login when you lose the account, but trading losses never make you owe it money. Every account includes a maximum loss limit, known as a drawdown. Your balance can fall that far before the account closes. Market losses never reach your bank because trades take place in a simulated account.

You actually lose the evaluation fee and any activation fee you paid before. After you pass, losing a funded account requires buying a new evaluation and passing it before you can trade again. Whatever you already withdrew as prop firm payouts remains in your bank.

How you become a funded trader

Retail traders qualify by passing a rule-based test instead of interviewing for a desk job. Unlike banking, you have no set prop trading salary because only a share of simulated gains becomes your earnings. That share is the profit split, and you keep most of each payout. For the details, see our guide to getting a funded trading account.

• Choose your market, such as futures or currency pairs, and review the drawdown rules.
• Purchase an evaluation that fits your budget, then reach the profit goal without breaking any loss limits.
• Sign the contractor agreement, complete the identity check, and pay the activation fee if required.
• Follow the house rules until your buffer is big enough for you to request a payout.

Prop firm taxes in the US

Self-employment tax becomes due for most self-employed US traders when their net annual earnings reach $400. At retail prop firms, funded traders work as independent contractors rather than employees, so payouts have no tax withheld. You must report nonemployee compensation yourself under the IRS independent contractor rules. Once the year is over, US firms typically issue a Form 1099-NEC.

Set aside part of each withdrawal so you have enough money when tax time arrives. Keep receipts for evaluation, activation, and reset fees to review with a tax professional.

Choosing a prop firm based on its true cost

The sticker price of a test doesn't show the full cost, because activation fees and resets affect what you actually spend. Our ranking of top-rated prop firms compares major companies by the actual cost of reaching a payout. You can also review our cheapest prop firms breakdown before buying.