If you have considered taking a prop firm challenge, you may have encountered “prop firm passing services,” which claim to fast-track traders through the crucial evaluation or “challenge” phase of getting a funded account with a prop firm.
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To help you on your prop firm journey, let’s find out how prop firm passing services work and if they are right for you.
How a Prop Firm Challenge Service Works
Prop trading firms give individuals money to trade and take a portion of the profits (most take 10-20% of the trader’s earnings). However, they do not simply hand out capital to anyone who wants it. First, the prop firm must know if an individual can trade profitably and control risk. They use an evaluation period called a “Challenge,” where individuals trade a monitored demo.
Individuals must meet several targets on the demo account to pass a prop firm challenge. Each prop firm will have different targets, but the three most important are:
- Account growth: The most essential part of a prop firm’s challenge is that the trader must grow the account by a minimum percentage.
- Number of trading days:
Prop firms sometimes specify a minimum and maximum number of trading days for the trader to hit the profit target. For example, if a trader hits a profit target within 1 or 2 trading days, the firm might worry that it was luck. And if they take too long to reach the profit target, it will not be worth the prop firm’s time.
- Maximum drawdown: This is the most critical part of risk control. The trader will fail the challenge if the account value decreases below the initial balance by a specified percentage, usually 8-10%.
What is a Prop Firm Pass Service?
For a fee, a prop firm pass service will pass a prop firm’s challenge for you.
Yes, you have read that correctly. That means I can sign up for a prop firm challenge but use someone else to pass it. That’s like having another person pass a driving test in my name so I can get my driving license.
How Much Does a Prop Firm Pass Service Charge?
The fees can range from $150 to several thousand dollars. For example, for a challenge to trade a $15,000 prop firm live account after passing, the pass service fee may be $175. However, if the prop firm’s live account after passing the challenge is $400,000, the pass service fee may be $3,500.
How Do They Trade?
Some pass services trade an automated bot on your behalf, while others manually trade the account. There’s no way of verifying how the service provider trades the account for the prop firm challenge.
Are There Any Good and Legit Passing Service Providers?
No regulations cover passing services, making it difficult to confirm if a service will perform as it claims. So, while there may be some legitimate services, they are extremely hard to verify.
It is also hard to know whether testimonials are real because many companies manufacture fake testimonials on their sites and even publish them on external sites, such as trading forums. Pay attention to negative testimonials—see if there is a pattern. For example, I discovered that one company had regular complaints of not issuing refunds that it promised after not passing challenges.
Is it Ever a Good Idea to Use a Passing Service Provider?
Evidence suggests that 80% of people who apply for prop firm challenges fail. Given the high failure rate, I understand the temptation to use a passing service.
However, I recommend avoiding using passing services. I have nothing against services that help people trade. Trading is not easy to master, and any help is welcome — I have written positively about automated strategies and signal providers that help traders.
But using an external service to pass a prop firm challenge is the wrong approach. The best prop firms expect that the person signing up for the challenge is the person trading the account, and if they sense that they are using a third-party service, they will probably ban the trader. Because using a passing service is like having another person take my college exams, it is also probably unethical.
If the passing service passes the challenges, I will either need to trade myself (but then I could have passed the Challenge myself) or continue to rely on the passing service to trade for me. If they lose money in a live environment — it’s not their reputation on the line. My name will be attached to the losses with the prop firm.
And remember, a passing service will not teach me anything about trading.
Prop Firms Passing Services— Pros and Cons
Pros
- If the pass service performs well, it will fast-track me to a prop firm’s funded account.
- Many pass services offer smaller fees, e.g. $150, for smaller account funding with a prop firm. I can risk a small fee to see if it works.
- Many prop firms allow multiple attempts to pass a challenge. if the pass service does not perform, I can try again myself.
Cons
- The best prop firms could ban me if they find out I am using a pass service.
- If the pass service performs, I may still need to rely on them to continue trading.
- Using a pass service does not teach me how to trade or improve my trading skills.
- Pass services are almost impossible to verify until I pay them to trade on my behalf.
- Many pass services claim they will refund their customers if they do not pass a challenge but do not issue refunds when asked.
Bottom Line
A prop firm pass service promises to pass a prop firm challenge on their client’s behalf to get them a funded account. That sounds great in theory, but the performance of these firms is hard to verify. Furthermore, the pass service industry has a bad reputation for not issuing refunds they promise if they do not pass the prop firm challenge. The biggest issue I see with pass services is whether they are ethical—it’s like asking someone else to pass my driving test for me. The best prop firms will want the named individuals trading the challenge, not a third-party service. And let’s say the service passes the prop firm challenge, I will still need to rely on them if I cannot trade profitably. If I knew how to trade, I could have passed the challenge myself.
