It also
highlights the benefits of broker-backed prop firms in the still new industry.

In a recent
interview with Prop For Match, David Varga, CEO and Co-Founder of Fintokei, shed
light on why traders often fail. He attributed their struggles to emotional
decision-making and inconsistent approaches, which frequently lead to financial
losses.

Emotional Pitfalls and
Risky Strategies Challenge Traders

“We
can see in the data that many traders are trading in a very nice way. It looks
like they really have discipline and some edge over the market. Then we see
one, two, three trades that are kind of out of the concept or strategy,”
Varga said.

“The
most common reason why something like this happens is that they lost their
nerves or saw some opportunity of a lifetime that they didn’t want to
miss.”

Fintokei is
a broker-backed prop firm owned by Purple Trading, which handles over 400,000
transactions daily. The company reports a 175% increase in active traders in
2024 and claims to
have paid out €4 million to clients in the first eight months of the year.

According
to Varga, the most important thing is to maintain discipline and manage
emotions to ensure long-term trading success.

“Take
your emotions under control. That’s, like I said, the most important part of
trading,” he said. “Focus on this part because not every trader,
especially the beginning trader, is aware of this.”

For those
entering the prop trading space, Varga also emphasized the importance of
choosing reliable firms and understanding the specific rules of prop trading.

Broker-Backed Prop Firms
Provide Stability and Trust

Varga also
discussed the advantages of broker-backed proprietary trading firms, which he
believes offer greater reliability and security compared to traditional prop
firms.

“The
safety, reliability, and, in the end, trust into the prop firm is one of the
core features that prop traders should seek,” he explained. “The
level of experience, including risk management , finance management, and the
network that comes along with the brokerage business, is very, very important
in the life of a prop firm.”

This aligns
with a recent survey conducted by PipFarm among 3,500 respondents. The study
revealed that 60%
of traders consider broker-backed prop firms to be more trustworthy.

He noted
that the extensive infrastructure and experience of broker-backed firms, such
as partnerships with payment providers and technology vendors, contribute to a
more stable trading environment for their clients.

Thus, it’s
no surprise that an increasing number of brokers are entering the prop trading
market. This week, Finance
Magnates exclusively reported
that Somesh Kapuria, the former Head of Business Development at AAAFx Global,
has become the latest executive from the FX and CFD industry to launch his own
prop trading platform .

ATFX also
confirmed its entry
into the prop trading industry, joining other established brokers such as
OANDA, Axi, Hantec, and Trade.com. Additionally, Andreas Andreou, the former
Chief Revenue Officer at BDSwiss, launched
his own proprietary trading brand following his departure from the
brokerage.

Education as a Key
Differentiator

Education
is a central focus for Fintokei, particularly
in the company’s core markets like Japan, where financial literacy and
access to trading resources are limited. Varga stressed the importance of
localized educational materials to support traders.

“Especially
here in Japan, financial literacy and education about trading are not so much
present. There is not that much publicly available information,” Varga
explained. “Having the educational materials in the local language is
something we try to differentiate from other competitors.”

According
to Varga, providing accessible educational content helps traders better
understand the market and improve their skills. This is particularly
significant, given that three
out of five traders in this market lose money, with an average investment
of $4,300. According to a separate study
by FPFX Tech, the statistics are even less encouraging: out of 300,000 prop
trading accounts, only 7% have made at least one withdrawal.

Rewarding Consistent
Trading with Scaling Plans

To
encourage sustainable trading, Fintokei offers a scaling plan that rewards
traders who demonstrate consistent profitability and disciplined risk
management. This approach aligns with the firm’s emphasis on long-term success.

“The
scaling plan that we have at the moment can actually bring you up to €4
million,” Varga said. “There’s not any client reaching that amount at
the moment yet, but hopefully, there will be some getting towards that goal
over the next year.”

Varga added
that consistency is a priority for the company, as it seeks to promote trading
behaviors that avoid excessive risk-taking or chasing short-term profits.

Fintokei’s Plans for the
Future

Reliability,
transparency, and innovation are key pillars of Fintokei’s mission, according
to Varga. The firm is also working on new initiatives aimed at improving trader
experience and industry standards.

“We
are working on several very interesting initiatives that I think could reshape
or add a very nice touch to the industry next year,” he said.
“There’s definitely a lot to look forward to.”

Varga
expressed optimism about the future of the prop trading industry, noting that
while challenges remain, firms like his are focused on creating opportunities
for traders.