What is prop firm?

What it means

The modern retail model works like this: pay a fee, trade a simulated account under strict rules, and if you reach a profit target without breaching a drawdown limit you are given a funded account and keep most of the profits. The firm makes money from evaluation fees and from its share of successful traders.

Why it matters

The rules are the product. Daily loss limits, maximum drawdown, minimum trading days, consistency requirements and news restrictions all constrain how the account may be traded, and breaching any of them typically ends the account immediately regardless of profitability.

What this changes in practice

For US-based traders this route matters disproportionately, because retail spot gold CFDs are largely unavailable domestically while prop firm accounts generally are. That is why prop firm traders are the main US audience for an MT5 gold bot rather than retail brokerage clients.