WORTH / KNOWINGA simple explanation of evaluations, simulated accounts, rules, and performance-based rewards.
A prop firm, short for proprietary trading firm, offers a trader access to a trading evaluation. You usually pay a fee, trade under a defined set of rules, and try to reach a target without breaching the risk limits.
Many modern crypto prop firms use simulated accounts. The balance shown on the platform may be virtual, while the firm may use your performance signals in its own trading or calculate a performance-based reward. Read the firm’s terms carefully so you understand what is simulated and what is paid.
A challenge is not free capital and it is not guaranteed income. The fee is the cost of the evaluation, and you can lose that fee if the account breaches its rules.