Kathy Lian, Co-Founder of BKTraders and author of Prop
Trading Secrets, offered a measured assessment of proprietary trading’s development,
challenges, and outlook in an interview with Finance Magnates’ Jeff Patterson.
Her comments came during the iFX EXPO International
2025, where brokers, trading firms, and technology providers gathered to
examine recent developments in the sector.

“Reconnecting with industry peers and providers has been
invaluable,” Lian said, emphasizing the importance of industry dialogue amid shifts
in the proprietary trading landscape.

That energy, she noted, mirrors the momentum within prop
trading itself. “Prop trading is a relatively new space, but the overwhelming
interest reflects its rapid expansion. Traders and firms alike are eager to
understand where this industry is headed next.”

An Industry Finding Its Feet

Although proprietary trading has existed in various forms
for decades, its current incarnation—marked by online-funded accounts, global
retail access, and gamified evaluation models—has exploded over the past three
years. But the path hasn’t been smooth.

“The growth we’ve seen has primarily happened in the last
three years,” Lian said. “But it hasn’t been without challenges—regulatory
crackdowns, technology disruptions, and firm closures have forced the industry
to adapt quickly.”

Still, she sees progress. “We’re still in the infancy stage,
but significant maturity has occurred. Traders now demand better technology,
transparency, and execution —factors that are pushing the industry forward.”

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Trader Habits and Discipline

Lian’s own journey through markets, and the patterns she has
observed in successful traders, formed the foundation of her new book. A core
insight: specialization beats breadth.

“The most successful traders focus on mastering one
instrument,” she explained. “Instead of spreading themselves thin across
multiple assets, they specialize—whether it’s gold, NASDAQ, or another
market—until trading it becomes second nature.”

It’s advice grounded in discipline, a trait Lian sees as
essential as the market grows more competitive and expectations of traders
rise.

Beyond Flash: Funding Models and Regulation

As the sector matures, proprietary firms
are experimenting with new funding approaches—often with mixed results. Lian
warned against novelty for novelty’s sake.

“Some changes cater to instant gratification but may not be
in the trader’s best interest,” she cautioned. Instead, she urges traders to
prioritize firms with longevity and transparent terms.

On the regulatory front, oversight remains uneven. The U.S.
Commodity Futures Trading Commission (CFTC) has signaled interest in the space,
but any near-term enforcement may be slowed by political considerations.

“European regulators are also watching closely,” Lian added.
“So we might see international frameworks emerge first.”

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Navigating Macro Shocks

The conversation also turned to market dynamics shaped by
geopolitics and monetary policy. Lian acknowledged that recent volatility has
tested even experienced traders.

“The past six months have been incredibly volatile, but I
believe markets will stabilize as trade disputes resolve and economic
fundamentals take center stage,” she said.

A Sector on the Verge

As the interview drew to a close, Lian returned to a theme
that resonated throughout the EXPO: the industry is still writing its own
playbook.

“There’s so much change happening—not just in global
politics but within our own space,” she said. “The next few years will be
pivotal.”

For traders navigating this fluid environment, Lian’s
message was clear: adaptability, focus, and an eye for structure are the
pillars of success. Prop trading may still be finding its footing, but the
foundations are forming fast.