Updated
“I’m winning in domestic FX, but I don’t have enough capital to earn big.”
Are you struggling with this problem?
In fact, there is a place that can maximize your “winning potential”.
That is the prop firm.
This article comprehensively explains all the information that domestic FX traders need to understand prop firms.
✅ What you’ll learn in this article
- The structure of prop firms and how they differ from domestic FX
- The “3 misconceptions” that domestic FX users have about prop firms
- Criteria for determining who is suitable for prop firms and who is not
- How to start a prop firm (5 steps)
- Prop firms recommended for Japanese people
- Tax and incorporation options
- Risks and precautions to be aware of
【Conclusion】Those who can win in domestic FX should consider prop firms
Let me start by sharing the conclusion.
If you have the “winning potential” in domestic FX, prop firms can be an excellent choice.
💡 Conclusion
Prop firms provide a system where you can trade with the company’s capital.
With a challenge fee of $10,000, you can manage a $100,000 (about 150 million yen) account. There is also zero risk of margin calls. If you have the winning potential in domestic FX, the capital efficiency will improve dramatically.
| Your situation | Recommended choice |
|---|---|
| Have winning potential × Capital under 1 million yen | Prop firm is the way to go |
| Have winning potential × Afraid of margin calls | Prop firm recommended |
| Consistently earning over 5 million yen per year | Domestic FX is also an option |
| Not winning yet | First, improve your skills |
Chapter 1: What is a Prop Firm?
A prop firm (Proprietary Trading Firm) is a business model where the company’s capital is used by traders to trade.
The basic mechanism of prop firms
The process is simple.
- Traders take a “challenge” exam (cost: around 10,000 to 100,000 yen)
- If they pass the challenge, they are given a “Funded account”
- They trade with the company’s capital ($25K to $400K)
- 70 to 90% of the profits are paid to the trader
In other words, the ability to trade with a large amount of capital without your own funds is the biggest attraction of prop firms.
Why are prop firms gaining attention now?
- In overseas markets, they have become the mainstream career path for traders
- Recognition is rapidly increasing in Japan as well
- In 2024, the industry leader FTMO was acquired by OANDA, significantly improving credibility
Differences from domestic FX and overseas FX
| Item | Domestic FX | Overseas FX | Prop Firm |
|---|---|---|---|
| Capital | Your own capital | Your own capital | Company’s capital |
| Maximum loss | Full amount + margin calls | Full amount | Challenge fee only |
| Tax rate | Fixed at 20.315% | Up to 55% | Up to 55% (can be reduced through a corporation) |
| Leverage | Up to 25x | 500 to 1000x | 100 to 200x |
📕 Detailed article
Domestic FX vs Overseas FX vs Prop Firms | What should you choose in 2025? →
Chapter 2: The “3 Misconceptions” That Domestic FX Users Have About Prop Firms
“I’m curious about prop firms, but somehow I’m avoiding them” – this is a fact for many people.
The cause is 3 misconceptions.
Misconception 1: “I’ll lose because the tax rate is higher”
It’s true that the profits from prop firms are taxed as “miscellaneous income” at a progressive rate (up to 55%).
Compared to the fixed 20.315% rate in domestic FX, it may appear less favorable at first glance.
However, the difference in capital efficiency often outweighs the difference in tax rates.
Furthermore, by incorporating, you can compress the tax rate to 25-35%.
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