Proprietary or 'prop' trading involves a company allocating a set amount of funds to its traders or portfolio managers to invest in a specific way or following a specific strategy. This industry has significantly evolved over the years, and one rule that has come to the forefront is "No Copy Trading Allowed." In this short blog, we will explain what this rule entails, how it relates to prop trading, and the importrances of selecting a prop funding company that offers clear guidance on the subject.
Copy trading is a method in which traders copy the strategies of successful traders in real-time. Yet, in the world of prop funding, this practice is often disallowed. The "No Copy Trading Allowed" rule numerous prop companies implement is primarily for ensuring original and independent trading decisions and strategies.
There's a legitimate reason for companies to discourage copy trading. Here’s why:
Despite the benefits mentioned above, the "No Copy Trading Allowed" rule is not without its drawbacks:
Proper guidance from the right prop funding company can help mitigate the negatives and enhance the benefits of the "No Copy Trading Allowed" rule. A reputable prop funding company provides clear guidance on prop trading rules and regulations, trading strategies, and risk management.
Understanding the limitations, advantages, and the fine print of prop trading rules, including those like "No Copy Trading Allowed," are crucial for your trading success. More importantly, partnering with the right prop funding company that provides guidance on these subjects can indeed make a significant difference in your trading journey.
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