Ifx Expo International in Cyprus

We are happy to share a piece of the latest interview at Ifx Expo International in Cyprus with our PropTradeTech Director & Chief Product!

“PropTradeTech is renowned for providing cutting-edge trading technology for prop trading firms”

Can you give us an overview of what your white-label fully managed solution encompasses?

That’s a great question! At PropTradeTech, we take a unique approach when it comes to serving prop trading firms. Instead of merely focusing on technology, we provide a comprehensive end-to-end white-label solution. We’ve observed that many individuals interested in starting prop trading firms excel in acquiring traders and have strong marketing skills. However, they often lack the expertise in areas such as payment brokerage and tech integration.

We believe in playing to our strengths. Therefore, we establish partnerships with those who excel in marketing and client acquisition. They handle that aspect, while we take care of the entire client journey. From the moment someone lands on our site and purchases an evaluation, we manage everything, including customer service, brokerage integration, technology, risk management, and payout management. Our goal is to provide a complete, turnkey solution for operating a prop trading firm.

Is your offering entirely in-house, or do you collaborate with other technology firms in the industry?

Great question! We have developed our own technology stack to handle all aspects of our offering. Initially, it was a learning experience for us, as I’ve previously built Forex CRM’s. However, building a system for prop trading proved to be more complex, as trading demands real-time data and robust technology infrastructure.

Our technology stack is entirely broker-agnostic, allowing us to seamlessly integrate with various brokers and provide a flexible solution.

Given your experience in retail Forex, could you highlight the main challenges that companies face when venturing into the prop trading space compared to the retail trading space?

The prop trading space presents unique challenges. Most individuals entering this domain typically come from education, influencer, or affiliate backgrounds, where they excel in marketing and client acquisition. However, what often holds them back is their limited knowledge of brokerage, liquidity, price feeds, and the technical intricacies required for effective risk management.

We see these knowledge gaps as the primary barriers to entry for aspiring prop trading firms. As the industry continues to grow, the challenges become more intricate, such as securing payment providers and managing escalating costs. Having PropTradeTech in your corner can help you overcome these challenges, as we handle the operational side of the business, allowing our partners to focus on their core strengths.

The prop trading industry has seen substantial growth in recent years. What do you think has contributed to this expansion?

The growth in the prop trading industry can be attributed to several factors. Firstly, it caters to a different demographic and fulfills a unique need for traders. It has a strong community-driven aspect, inspired by developments in the crypto and stock option spaces. The prop trading demographic tends to be younger, with traders typically aged between 25 to 30, as opposed to the average brokerage client at 37.

Ideologically, prop trading offers individuals with limited capital the opportunity to leverage a larger pool of funds for trading. It appeals to those who aspire to be career traders and are willing to take on the challenge. Rather than starting with a meager $500 in a retail brokerage account, they can put their skills to the test with a more substantial evaluation.

To manage risk, PropTradeTech leverages data-driven exposure risk modeling, trader profiling, automation, and more. 

What are the key considerations and challenges when managing risk for a Forex prop firm?

Managing risk is paramount in prop trading. The best approach is to avoid taking on unnecessary risks in the first place. While data-driven models, profiling, and automation play a crucial role, we focus on setting rigorous parameters for our challenges and evaluations. This helps in preventing excessive drawdowns and encourages responsible risk management.

Additionally, it’s essential to identify and address toxic traders and maintain a database of their IP addresses. We leverage our experience and data to advise our partners on building effective challenges that strike a balance between assessing trader skills and managing risk.

Do you offer multiphase evaluation models for prop traders?

Absolutely, we offer a range of evaluation models to cater to the diverse needs of our partners. While one-step challenges have gained popularity for their simplicity, we also provide two-step challenges for more comprehensive assessments. We believe in flexibility and work closely with our partners to select the most suitable evaluation model.

Regulation is a crucial aspect of the prop trading space. With recent legal actions against prop trading firms, such as the CFTC’s lawsuit against My Forex Funds

How do you foresee the evolution of regulation in this sector?

Regulation in the prop trading space is an evolving landscape. Recent legal actions, such as the CFTC’s lawsuit against My Forex Funds, have garnered significant attention. While some view this as a crisis, we see it as an opportunity. It serves as confirmation of our operational model, which is the polar opposite of entities like My Forex Funds.

We have always maintained a strict adherence to regulation and best practices. We work with regulated counterparties like AAP and emphasize responsible risk management. Prop trading is a dynamic field, and it is essential for regulators to step in and establish clear guidelines. We welcome this and have been proactive in preparing for the regulatory changes that lie ahead.

Furthermore, we leverage our industry experience to educate and guide our clients on the importance of compliance and responsible trading practices. It’s vital to be prepared for regulatory changes and to conduct business in a responsible and sustainable manner.

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