General Trading Risks
Trading in financial markets, including through proprietary trading firms, carries a high level of risk and may not be suitable for all individuals. You should carefully consider your financial situation, investment objectives, and risk tolerance before engaging in any trading activity. Our risk profile matcher can help you assess whether prop trading aligns with your circumstances.
Key Risks Include:
- Loss of Capital: You can lose some or all of your investment. Challenge fees are typically non-refundable.
- Leverage Risk: Trading with leverage magnifies both gains and losses — check firm leverage policies carefully.
- Market Volatility: Prices can change rapidly and unpredictably, especially during news events.
- Emotional Decision Making: Stress and emotions can lead to poor trading decisions that breach drawdown limits.
- Technical Failures: Platform outages or connectivity issues can prevent trade execution at critical moments.
Prop Firm Challenge Risks
Proprietary trading firm challenges have specific risks and requirements beyond general market risk. Use our challenge cost comparison tool to understand the financial commitment and account size data to choose appropriately.
Challenge Failure Risks
- Low Pass Rates: Most traders do not pass evaluation challenges on their first attempt — see pass rate statistics showing typical rates of 5-15%.
- Non-Refundable Fees: Challenge fees ranging from $50-$1,000+ are typically lost if you fail (some firms offer refundable fee programs).
- Strict Rule Compliance: Profit targets, drawdown limits, and time restrictions can be difficult to meet simultaneously.
- Immediate Termination: Breaking any rule results in immediate failure and loss of all fees paid — no second chances within that attempt.
Funded Account Risks
- Even after passing, maintaining funded status requires ongoing compliance with trading rules and consistency requirements.
- Accounts can be terminated instantly for rule violations with no warning or appeal.
- Profit splits (typically 70-90%) mean you only receive a portion of earnings.
- Payout timing and conditions vary significantly — some firms have 30+ day waiting periods.
No Guarantee of Success
Past performance does not guarantee future results. Success stories and testimonials showcased by prop firms or traders do not represent typical results. The majority of traders experience losses, especially when starting out. Historical data in our review database shows varied outcomes.
Use our profit calculator to model realistic scenarios based on actual profit split data. Expect multiple failed attempts before potential success. Budget accordingly.
PropFirmScan's Role
PropFirmScan is an affiliate comparison platform and cashback provider. We clearly state what we do and do not do:
What We Do NOT Do
- Provide trading advice or education
- Manage or execute trades
- Guarantee your trading success
- Control prop firm operations
- Verify firm financial stability
What We DO Provide
- Firm comparison data
- Trading rules documentation
- Cashback on purchases
- Calculation tools
- User review aggregation
We provide information and comparison tools to help you make informed decisions, but we are not responsible for your trading outcomes.
Due Diligence
Before purchasing any prop firm challenge, you should complete thorough research:
- Read all rules: Understand every trading rule and requirement before purchasing.
- Check firm reputation: Research on our vetting page and read trader reviews.
- Verify payout history: Check payout timelines and community feedback on actual payouts received.
- Calculate total costs: Use our cost comparison tool and ROI calculator.
- Assess capital adequacy: Ensure you have funds to sustain potential losses and multiple attempts.
- Match your trading style: Use our risk profile matcher to find aligned firms.
Regulatory Notice
Prop trading firms may not be regulated in all jurisdictions. The level of regulation varies significantly between firms and countries. Check our firm vetting data for regulatory status of each firm. Review our location-specific guides for your country's regulations.
Unregulated Entity Risks:
- No government oversight or investor compensation schemes available.
- Limited legal recourse in disputes — especially across international jurisdictions.
- Potential for fraud or company mismanagement with no regulatory accountability.
- No guarantee of capital security if the firm faces financial difficulties.
Psychological Considerations
Trading can be mentally and emotionally demanding, often more than anticipated:
- Financial stress from pressure to meet profit targets and avoid drawdown breaches.
- Anxiety about meeting challenge requirements within time limits.
- Emotional impact of losses, especially consecutive losing streaks.
- Risk of unhealthy habits including overtrading, revenge trading, and ignoring risk management.
If you experience significant stress, please seek appropriate support. Our trading guides cover psychology and risk management best practices.
Cashback Disclaimer
PropFirmScan cashback rewards have specific limitations you must understand:
- Do NOT reduce trading risk: Cashback does not offset potential trading losses or challenge failure.
- Do NOT guarantee profit: A 2% cashback on a $500 fee ($10) is minimal relative to trading outcomes.
- Subject to verification: Cashback claims may be denied for promotional abuse or term violations.
- Not a primary factor: Choose firms based on rules, reputation, and profit splits — not cashback percentage.
Important Reminder
Only Trade with Money You Can Afford to Lose
Never trade with money needed for essential expenses (rent, food, bills, debt payments). Do not borrow money to fund trading activities or use credit cards for challenge fees. Use our ROI calculator to understand potential returns relative to costs, and only proceed if loss of the entire amount would not impact your financial stability.
Seeking Professional Advice
Before engaging in trading, consider these professional consultations:
- Financial advisor: Consult a licensed professional about whether trading fits your financial plan.
- Tax professional: Understand local tax obligations on trading income — see our tax guides for country-specific information.
- Goal alignment: Ensure trading aligns with your overall financial goals and timeline.
- Education: Get proper trading education from qualified sources — browse our glossary and guides to build foundational knowledge.
Acknowledgment
By using PropFirmScan and purchasing prop firm challenges through our affiliate links, you acknowledge that:
- You have read and understood this Risk Disclaimer in its entirety.
- You understand the substantial risks involved in prop trading.
- You are solely responsible for your trading decisions and all outcomes.
- You will not hold PropFirmScan liable for any trading losses or challenge failures.
- You are trading voluntarily with appropriate risk capital that you can afford to lose.
Contact
For questions about this disclaimer, contact us directly or email: contact@propfirmscan.com. We're happy to clarify any aspects of our platform's role and limitations.