If you're considering starting your trading journey with a prop firm, you might be wondering which is best for you. Two popular options are FTMO and The 5%ers. Both of these companies offer to fund forex traders, but they have some differences you should consider before making a decision.
FTMO was founded in 2015 and required you to complete KYC (know your customer) procedures after you've passed the second phase of its challenge. The 5%ers, on the other hand, was established in 2016 by a group of forex day traders who wanted to address the lack of funding opportunities in the industry.
In this article, we'll compare these two prop firms so you can better understand which one might be the right choice for you.
What is FTMO?
FTMO is a prop firm founded in 2014 that allows traders to trade using a funded account of up to $200,000. However, before they can do so, they must first pass the FTMO Challenge, a thorough assessment of their trading abilities and strategies. This challenge is mandatory and allows FTMO to evaluate a trader's skills. Once a trader successfully passes the challenge, they can trade their capital across various markets such as forex, futures, options, and equities. In addition to trading opportunities, FTMO also offers educational resources and support for its traders.
What is The 5%ers?
The 5%ers is a proprietary trading firm with offices in Israel and the United Kingdom. They offer various instant funding account options, including low-risk and aggressive-risk models with account sizes ranging from $6,000 to $20,000 that can be scaled up to $4,000,000. They also have a newer option called the $100K or $250K Bootcamp challenge, which has the potential to reach the same size as the other account options. These accounts use MetaTrader 5 and a third-party program as their broker. The company is registered in the UK under FIVE PERCENT ONLINE LTD and was founded by Gil Ben Hur on April 9, 2020. The UK office is located at Enstar House in London.
FTMO Vs. The 5%ers: FTMO Funding Process
FTMO has a comprehensive evaluation process in place to identify talented traders. This process is divided into two stages: the FTMO Challenge and Verification. The FTMO Challenge tests traders' ability to adjust their trading style and risk management based on specific rules. On the other hand, the Verification stage involves evaluating a trader's ability to maintain profitability over an extended period while following strict guidelines set by FTMO.
To participate in the FTMO Challenge, a trader must aim to make a profit of $1,000 within 30 days using a $10,000 balance account. Certain limits exist, such as a daily loss limit of $500 and an overall loss limit of $1,000. The trader must also trade for at least 10 days.
For the Verification stage, the requirements are slightly less stringent. For example, a trader must aim to make a profit of $500 within 60 days using the same $10,000 balance account, with the same drawdown limits of $500 daily and $1,000 overall.
If a trader completes the evaluation program, they will be allowed to trade using FTMO's proprietary trading accounts with balances of up to $400,000. It's worth noting that FTMO offers two types of accounts: Normal and aggressive. In this case, we are discussing the Normal account.
The5ers Vs. FTMO: The5ers Funding Process
As we also mentioned in our The5ers review, The5ers Funding Program is a program that allows traders to trade using real capital. There are two options for funding: the Instant Funding Program and the Bootcamp Program.
Instant Funding Program
The Instant Funding Program gives traders a choice between three account sizes: $24K, $40K, or $80K. They also have the option to choose between a Low-Risk Account or an Aggressive Account. Low-Risk Accounts require a stop-loss on every trade and must achieve a profit target of 6% to be fully funded. Please consider that Aggressive Accounts have higher leverage but need to reach a profit target of 12% to be fully funded.
Upon signing up for the Instant Funding Program, traders receive 25% of their chosen account size as real capital. For instance, if a trader opts for an $80K account and selects the Low-Risk option, they will receive $20K as real capital and must reach a profit target of 6% to receive the full $80K. If a trader chooses the Aggressive option, they will still receive $20K as real capital but must reach a profit target of 12% to receive the full $80K. No minimum number of trading days is required to reach these profit targets, so if a trader can quickly achieve their target, they will be fully funded immediately.
In addition to these requirements, traders must follow specific rules to keep their accounts active. These include maintaining their account level above the equity stop-out level, which is around 4% of the instant funding amount. If a trader fails to meet these requirements, their account may be terminated.
Once a trader is fully funded, they have the opportunity to continue growing their account. When a trader reaches a profit milestone (10% for Low-Risk Accounts and 25% for Aggressive Accounts), the 5%ers will double their trading capital. This process will continue up to a maximum of $4 million. The 5%ers make it easy for traders to start and grow their accounts with straightforward rules and a simple funding process.
Bootcamp Program
The 5%ers Bootcamp program is a challenge that allows traders to demonstrate their skills by paying a small entry fee and completing demo stages. The demo stages have a target profit of 6% and a maximum loss limit of 5%. The maximum trading period for the demo stages is 12 months. There is also a 21-day account expiration period for inactive accounts. To participate, traders must use stop-losses and not risk more than 2% of their initial account balance. In addition, if an account has more than three violations, it will be terminated. Once traders complete the demo stages, they can move on to the live trading stages and earn profits while being eligible for growth every time they reach a profit target of 5%. The live trading stages require a one-time fee and offer a profit split ranging from 50% to 100%.
FTMO Vs. The5ers: Cost
FTMO offers two types of accounts for traders: Normal and Aggressive. The fees for these accounts depending on the size of the funds and the type of account. For the Normal account, one-time refundable registration fees range from €155 for a $10,000 account to €1080 for a $200,000 account. The Aggressive account has fees that range from €250 for a $10,000 account to €1080 for a $100,000 account. These fees are refundable if the trader passes the evaluation program.
Once a trader completes the evaluation program, they can access FTMO's complete range of trading tools and resources at no additional monthly subscription cost. These resources include daily market analysis, educational materials, and support from a dedicated account manager.
On the other hand, The 5%ers offer three funded capital account sizes, each with a different participation fee. For instance, the $24,000 level includes starter capital of $6,000 and a €235 participation fee. The $40,000 account includes $10,000 of instant funding and a €385 participation fee. Finally, the $80,000 level comes with $20,000 in instant financing and a €745 participation fee.
The Bootcamp Program has two demo accounts available, with varying costs. The $100K account comes with a €95 fee, and the $250K account has a €225 fee. For live accounts, users will pay €205 for the $100K option and €350 for the $250K option.
FTMO Vs The 5%ers: Profit Splits
FTMO has a default profit ratio of 80:20, meaning that traders get to keep 80% of their profits. This profit ratio allows traders to retain a substantial portion of their earnings while still benefiting from the capital and resources provided by FTMO.
However, traders who meet the conditions of the Scaling Plan may be eligible for an increased profit ratio of 90:10. This means that they get to keep an even larger share of their profits, providing an additional incentive to succeed in the markets.
On the other hand, The 5%ers profit split is 50/50. This may not be as favorable as some alternatives, such as FTMO, which offers a different profit split. However, it's important to note that FTMO does not offer instant funding, while the 5%ers do. By providing instant funding, the 5%ers are taking on more risk and are therefore justified in taking a larger share of the profits. This is the cost a trader must pay to get immediate funding.
Who should consider FTMO as their Prop trading platform?
FTMO is an excellent choice for all levels of traders, from beginners to experienced market professionals. The company offers a range of account sizes and programs - Basic, Advanced, and Pro - to suit different trading needs and budgets.
The platform also offers transparency and flexibility, with a default profit ratio of 80:20 that can potentially increase to 90:10 if the trader meets the conditions of the Scaling Plan. This provides an extra incentive for success in the markets.
In addition, FTMO gives traders access to cutting-edge trading tools and resources, including daily market analysis, educational materials, and dedicated support from a professional account manager.
Overall, FTMO is perfect for traders looking for reliable and flexible trading solutions with transparent pricing structures and generous profit ratios.
Who should consider The5ers as their Prop trading platform?
The 5%ers offer the perfect solution for traders exploring their options in prop trading and only wanting to invest a small amount of money. Its low fees and instant access to real capital make it the perfect option for those with limited funds. Furthermore, its relaxed trading rules and fast payouts make it an ideal choice for traders who want more flexibility and the opportunity to capitalize on short-term trends. Finally, with its trader support team, educational materials, and profit split program, it is a desirable option for those seeking to maximize their chances of success.
FTMO Vs. The 5%ers: Customer Support
In terms of availability, FTMO's customer support is available 24/7, meaning that customers can reach out for help at any time of the day or night. In contrast, The 5%ers only offers customer support during specific hours on certain days of the week. This means that if a customer has a question or issue outside of these hours, they will have to wait until the support team is available to get help.
In terms of language support, FTMO offers customer support in 15 different languages, ensuring that customers who speak other languages can easily communicate with the support team. However, there is no mention of language support for The 5%ers, so it is unclear whether they offer support in languages other than English.
Regarding contact methods, FTMO offers a range of options, including email, live chat, Whatsapp, and phone, while The 5%ers only provides email and phone support. This means that customers of FTMO have more ways to reach out for help and can choose the most convenient method.
Finally, both companies have friendly and knowledgeable customer support teams, but FTMO's team is specifically noted as helpful. This suggests that FTMO may place a particular emphasis on providing excellent customer service.
Overall, it appears that FTMO has a more comprehensive and widely available customer support service than the 5%ers. Customers of FTMO have access to a range of contact methods and language support and can reach out for help at any time of the day or night. The 5%ers program, on the other hand, has more limited availability and fewer contact methods.
Conclusion
FTMO and The 5%ers are both proprietary trading firms that offer to fund traders looking to trade financial markets, including forex, futures, options, and equities. Both companies have an evaluation process to identify talented traders and offer educational resources and support.
FTMO's evaluation process consists of two stages: the FTMO Challenge and Verification. To participate in the FTMO Challenge, a trader must aim to make a profit of $1,000 within 30 days using a $10,000 balance account, with certain drawdown limits in place. For the Verification stage, the requirements are slightly less stringent. If a trader completes the evaluation program, they will be allowed to trade using FTMO's proprietary trading accounts with balances of up to $400,000.
The 5%ers has a similar evaluation process called the Funding Program, which consists of two options: the Instant Funding Program and the Bootcamp Program. The Instant Funding Program gives traders a choice between three account sizes and the option to choose between a Low-Risk Account or an Aggressive Account. The Bootcamp Program is a more intensive and allows traders to trade a $100K or $250K account. Traders must reach a profit target in both programs to be fully funded.
Ultimately, choosing FTMO and The 5%ers will depend on your individual goals and preferences. Therefore, it's essential to carefully consider the terms and conditions, including the evaluation process, funding options, and trade requirements, before making a decision.