If you have already successfully applied for your first Prop account, congratulations! You have taken the first step to financial freedom.
You now have a decision to make – do you sit back and let your monthly passive profits accumulate, or do you reinvest some or all of it to increase your trading account value and thereby increase your monthly returns?
Here we will compare common scenarios to help you plan ahead to achieve your goals in the quickest way possible.
If you haven’t yet applied, you can do so by visiting Prop Trading Accounts.
The above chart compares a typical long term investment of 5% per annum (light blue) with a traditional trading account returning 5% per month (mid blue), and finally a Prop account which generates a 5% return per month (dark blue).
Our Prop accounts provide you with 20 x more trading power because the account value is 20 x your initial fee.
The light blue line above illustrates the profit potential of a starter account with a trading value of £50,000, assuming a 5% return per month. The starting point is -2,500 with a return equivalent to £1,250 monthly after profit split. From the beginning of month 3 you are at break-even with zero risk going forward.
The mid blue line illustrates a starter account with a trading value of £50,000, with the profit share reinvested in a second account at the beginning of month three. Break-even is achieved at the beginning of month four, and the profit position at the beginning of month five is equivalent to a single account, after which the monthly profit return is double that of a single account.
The dark blue line is a comparison with a Premium account with a trading value of £100,000, and illustrates the benefit of receiving 100% of the profits until the setup fee is returned. In this example, break-even is achieved at the beginning of month two, with zero risk thereafter.
Starter accounts receive a 50/50 profit split, whilst Premium accounts receive 100% until the setup fee is returned. Larger Premium accounts receive up to 55/45 profit split.
The above illustration shows a simple comparison between a single £100,000 value account (light blue); the same account with profits reinvested in a second account (mid blue); and the same account with profits from two accounts reinvested in a third account (dark blue).
At the beginning of month 1, a single account is ahead in terms of profit returned.
At the beginning of month 2, a second account is equal to a single account.
At the beginning of month 3, three accounts are equivalent to two accounts and both scenarios are already ahead of a single account.
By the beginning of month four, the three combined accounts are already ahead of two combined accounts.
This is how to scale Prop accounts for greater profit. Of course, you do not need to reinvest all of the profits immediately. You could consider putting half the profits aside so that you have spendable income earlier – this would take twice as long to reap the benefits, but is a good compromise.
Those that are more risk averse should consider waiting until they have received back their setup fee, and then reinvesting profits once they have achieved a zero risk position.
You can apply for your first, and additional, accounts HERE, and remember to use our offer code!
