In futures prop trading, the ability to evaluate a firm based on its PT:DD (Profit Target to Drawdown) ratio is important. This crucial metric shines a light on the risk and reward balance that proprietary traders maintain in the futures market. By examining the relationship between a trader's set profit target and the allowable drawdown before a stop-out is triggered, one can understand the firm's approach to risk. In this blog, we present a ranking of the top 5 futures prop trading firms for 100K accounts, based on their PT:DD ratios.
Significance of PT:DD Ratio in Prop Trading Firms
In futures prop trading, the PT:DD (Profit Target to Drawdown) ratio is a vital tool for evaluating the risk and reward dynamics of proprietary traders navigating the futures market. This ratio provides insight into the relationship between a trader's profit target (PT) and the allowable drawdown (DD) before triggering a stop-out. A higher PT:DD ratio indicates a trader's inclination towards a cautious strategy, aiming for substantial returns for each unit of risk assumed. Conversely, a lower ratio may suggest a more daring approach. For futures prop firms, this ratio offers a window into a trader's skill in managing risk, aligning their risk tolerance with the firm's guidelines. It embodies the balance between profit generation and safeguarding the firm's resources.
#1 Elite Trader Funding [Ratio: 1:0.70]
Topping the list is Elite Trader Funding, a prop trading firm based in the United States, showcases a PT:DD ratio of 1:0.70 on their 100K account. One standout feature of this firm is its competitive 90% profit split arrangement. Elite Trader Funding sets a clear profit target for traders at $5,000 and offers a daily payout frequency, allowing traders to access their earnings promptly every day. The maximum daily loss is capped at $1,500, with the assurance that this limit does not compromise the overall account integrity. Additionally, traders need to be mindful of the maximum total drawdown, set at $3,500. With a year of experience in the industry, Elite Trader Funding focuses on markets like CBOT, COMEX, CME Group, and NYMEX. They operate through various platforms, including NinjaTrader, Tradovate, TradingView, and Rithmic.
#2 Earn2Trade [Ratio: 1:0.58]
Earn2Trade, based in the United States, boasts a PT:DD ratio of 1:0.58 on their 100K account. The firm partners with brokers like Phillip Capital, EdgeClear, and Advantage Futures and maintains an 80% profit split. Earn2Trade sets a concrete profit target of $6,000 and adheres to well-defined risk management policies. A maximum daily loss limit of $2,200 is in place, with the assurance that breaching this limit does not jeopardize the overall account integrity. Furthermore, a total drawdown limit of $3,500 promotes disciplined trading practices. With seven years of experience in the industry, they provide platforms such as NinjaTrader, Finamark, and Overcharts. Earn2Trade offers trading in all CME group futures assets, excluding Forex on certain products. Traders at Earn2Trade can anticipate their earnings to be disbursed every seven days, ensuring a weekly pay-out cycle.
#3 Topstep [Ratio: 1:0.50]
Topstep, operating from the United States, presents a PT:DD ratio of 1:0.50 for their 100K account, along with a competitive 90% profit split. With a presence in the industry for 12 years, the firm sets a profit target of $6,000, providing traders with a clear financial milestone. Topstep places a strong emphasis on controlled trading, enforcing a daily loss limit of $2,000, with the assurance that breaching this limit does not compromise the overall account integrity. The maximum total drawdown is restricted to $3,000, ensuring the long-term sustainability of accounts. Topstep partners with brokers like NinjaTrader Brokerage and Quantower and offers platforms such as NinjaTrader and Quantower for trading. The firm supports trading in CBOT, NYMEX, COMEX, and CME Group futures. Once traders are funded, Topstep offers daily pay-outs, granting traders immediate access to their earnings on a day-to-day basis.
#4 Apex Trader Funding [Ratio: 1:0.50]
Apex Trader Funding, also based in the United States, matches Topstep with a PT:DD ratio of 1:0.50 and has solidified its presence over two years in the prop trading arena. A standout feature of the firm is its trader-friendly 90% profit split. Apex Trader Funding sets a profit target of $6,000 and operates via Rithmic and Tradovate platforms. Notably, there isn't a specified daily loss limit, providing traders with flexibility in their day-to-day operations. However, traders must remain mindful of the $3,000 total drawdown limit, which serves as a safety net for the account's long-term stability. Additionally, Apex Trader Funding has established a bi-weekly payout cycle, allowing traders to access their profits every 14 days.
#5 My Funded Futures [Ratio: 1:0.50]
Completing our list, My Funded Futures, with its PT:DD ratio of 1:0.50, partners with a liquidity provider for brokerage services. This US-based prop trading firm, with less than a year in business, operates on NinjaTrader, Rithmic, and Tradovate platforms. My Funded Futures allows trading in a variety of instruments, including futures assets across CME, CBOT, COMEX, and NYMEX. The firm offers a generous 90% profit split with a clear profit target of $6,000. There isn't a daily loss limit, granting traders flexibility in their daily trading activities. However, traders must remain vigilant due to the $3,000 total drawdown limit, which acts as a safety net for the account's health. Additionally, traders can anticipate their profits to be disbursed every 14 days, ensuring a consistent pay-out schedule.
Summary
The PT:DD ratio serves as a barometer for understanding the risk-reward dynamics of futures prop trading firms. As our analysis reveals, the firms on our list showcase a mix of cautious and daring approaches to trading, with each offering unique features, profit splits, and pay-out schedules. From Elite Trader Funding's high 1:0.70 ratio to My Funded Futures matching the industry's standard of 1:0.50, it's evident that the futures prop trading is diverse in opportunities. Whether you're a seasoned trader or just dipping your toes into the futures market, understanding the PT:DD ratio can be instrumental in aligning with a firm that resonates with your risk tolerance.
