Prop trading firms have exploded in popularity, promising traders access to large accounts and the opportunity to share profits without risking personal capital. Sounds great, right?
But not all of these firms play fair.
Beneath the glossy websites and aggressive marketing campaigns, some prop firms are running manipulative schemes designed to trap and profit off unsuspecting traders. In this article, we’ll break down the dirty tricks used by shady prop firms—and how you can avoid becoming a victim.
🚨 Common Prop Firm Scams You Need to Know
1. Unrealistic Evaluation Challenges
Many firms require traders to pass strict evaluations before accessing a “funded” account. But the odds are often stacked against you with:
- Tight time limits
- High profit targets (e.g., 10%)
- Low drawdown thresholds (e.g., 5%)
The twist? Some firms manipulate the backend to make sure you fail—so you’ll have to buy the challenge again.
2. Price Manipulation
This is one of the most underhanded tactics used by scam prop firms. They operate in a simulated environment, where they can:
- Widen the spreads
- Delay your entries and exits
- Manipulate candle highs and lows
- Create fake wicks that hit your stop-loss—even when the real market never touched that price
This makes it nearly impossible to execute a winning strategy, no matter how good you are.
3. Stop-Loss Hunting
Some traders report that their trades are stopped out perfectly, only to see the market reverse immediately afterward. This is no coincidence—it’s a deliberate act where prop firms trigger your stop-losses using fake pricing data. In a real market, your trade wouldn’t have been closed—but in their system, you lose.
4. Unfair Commission & Swap Fees
Legit brokers offer clear, competitive commissions. But in shady prop firms, you may find:
- Hidden fees
- Higher-than-normal commission per lot
- Massive swap charges for holding overnight
These eat into your profits and make profitability even harder.
5. Fake or Delayed Payouts
Even if you pass their challenge and “make money,” many scam firms:
- Refuse to pay
- Delay payouts with endless KYC issues
- Terminate your account with vague excuses like “unusual trading behavior”
Some traders have waited months for payouts that never came.
6. No Real Funding – Just Simulation
Some prop firms don’t connect your trades to a real market. You’re simply trading in a demo environment, even after being “funded.” Your profit isn’t real—and neither is your impact on the market.
❗ Red Flags to Watch For
- Suspicious price action that doesn’t match real brokers
- No company registration info or support phone number
- Tons of Trustpilot reviews mentioning stop-loss manipulation
- Constant discounts or promotions for challenges
- No transparency about liquidity providers or execution models
✅ How to Protect Yourself
- Compare price action with a real broker like IC Markets or Pepperstone.
- Read the terms & conditions carefully, especially payout and challenge rules.
- Join Reddit or Discord trading groups and ask for real user experiences.
- Check their Trustpilot reviews—look for consistent red flags.
- Stick with well-known, reputable prop firms (FTMO, MyForexFunds*, etc.)
💬 Final Thoughts
There are honest and professional prop firms out there—but scammy ones are multiplying fast, preying on traders who want quick funding.
Don’t be fooled by aggressive marketing or flashy dashboards. If a firm is manipulating prices, unfairly hitting stop-losses, or charging hidden fees, it’s not worth your time or money.
Your best weapon is awareness and due diligence. Trade smart—and stay alert.
