FNG Exclusive Interview… One of the hot topics of late in the online trading sector is that of retail prop trading, with a number of new prop firms opening (but some failing and closing) as clients continue to flock to prop trading.

With leading trading platform cTrader running a webinar later this month (on September 23) about How to Start a Prop Firm, we though that it would be a good time to catch up with Ricardo Dias, Business Development Manager at cTrader developer Spotware Systems (who will be leading the webinar) to get a preview and find out more about just what it takes to start a prop firm.

FNG: Hi Ricardo, and thanks for joining us today. We don’t want to take away all the mystery from cTrader’s upcoming webinar on how to start a prop firm, but we’re hoping we can get some of the highlights. Who today do you see today starting prop firms? Is it CFD broker managers? Former prop firm staff? What does it take to start a prop firm? Can anyone do it?

Ricardo: Thank you for having me. Prop trading is a fascinating concept that has developed significantly in recent years and gained popularity because it allows smaller investors to generate higher profits, even with limited capital.

Who can start a prop firm? In theory, almost anyone. However, some people have better chances of success, for example, IBs or affiliates who already have an audience or network, or CFD brokers who expand their operations by offering these services to traders.

FNG: Why has prop trading become so popular among retail traders? Where are the key growth regions right now?

Ricardo: Trading is never easy, especially in the beginning. Prop trading gives new traders the chance to enter the market with less capital compared to traditional broker accounts. The evaluation challenges also help them improve their skills and build consistency before moving on to funded accounts. So, it’s both a learning process and an opportunity to earn profits once they’re ready.

For traders in regions with lower average salaries, when converted into dollars, prop trading offers an amazing opportunity to access larger capital. At the same time, experienced traders can also benefit massively from prop trading by scaling their strategies without putting significant personal capital at risk.

FNG: How much time and money does it take to reasonably start a prop firm?

Ricardo: That’s a great question! Opening a brokerage typically takes more time and requires a larger investment. Starting a prop firm, on the other hand, involves a lower initial cost since you don’t need as many staff members, and currently, there is no licensing requirement to offer CFDs to your traders on demo accounts (though I believe having one could be a valuable addition in the future).

Because no license is required to launch, the setup process is much faster. On our side, we usually deliver the prop firm platform within about five working days. Of course, you’ll also need to prepare a website, select a CRM, and plan your marketing and business strategy. But overall, it’s a fairly quick process.

FNG: What are the key elements you’ll be discussing in your webinar on starting a prop firm?

Ricardo: One of the main points will be how cTrader can help you build and scale your business. We’ll cover several important aspects, including a live demo session with the manager application. The session will walk participants through the entire process, from company setup to launch, while sharing examples, practical tips, and ideas to make the business successful.

FNG: cTrader works with lots of prop firms, from new startups to firms like The5ers. What do you see as the biggest mistakes prop firm operators make. And how do you at cTrader help prop firms avoid or overcome these pitfalls?

Ricardo: One of the biggest mistakes is not having a clear strategy combined with strong risk management. Like any business, a prop firm needs a solid plan: which regions to target, which languages to support, what marketing campaigns to run, and so on.

But strategy alone isn’t enough, you must also have proper risk management. cTrader provides the essential tools firms need to monitor trader activity effectively. Unfortunately, there are many abusers in the market, for both prop firms and CFD brokers, who try to exploit loopholes in creative ways to scam companies. Detecting these behaviors early is critical, not only to prevent potentially heavy financial losses but also to protect the reputation of your firm.

Having prop firms such as The5ers with us shows that we have the product that prop firms need to have success.