Prop Firms vs. Retail: The Success Gap w/ John471
Twenty years ago, I started as a clerk at a proprietary (prop) trading firm in Chicago. Unlike bucket shop-style firms (funding companies), this was a true prop firm where I was paid a salary to learn. If I put in the effort, gained the necessary knowledge, and executed well while adhering to risk plans, I could become a trader. Fortunately, I did.
Our cohort began with twelve clerks; four of us were promoted to traders, and two, including myself, became CME members. While a 33% success rate may not seem remarkable, it far outperforms the typical retail trader’s odds. The four of us began with a 25k account, and after 12 months were consistently drawing five figure checks from that account. I have never met a retail trader who had that much success, that quickly, but this is quite typical in legit prop.
So why do prop traders succeed at higher rates? Here are three key differences that create a success gap.
It’s an Actual Job
We commuted daily to the Chicago Loop, spending 12 hours in the office. We were paid to observe markets, execute trades, and perform menial tasks. The initial excitement faded into routine, which was an advantage. Trading became work, not an adrenaline rush. We associated it with patience, not action.
Many retail traders believe they treat trading like a job. But do they? How many truly commit consistent hours each week to systematically tracking their progress, committing to the tedious but necessary work? Most spend time at the screen, tweaking chart colors, watching YouTube order flow videos, and debating indicators. Few diligently frame a system, journal trades, track errors, and commit to a structured learning process. That’s what we did.
The Luxury of Limited Choices
At the prop firm, we didn’t choose our market or system. We were assigned a market and taught a specific approach over four weeks. We had some discretion, but we largely executed the same strategies.
We didn’t select our trading software, computer, or news service. We had a Dell desktop, X Trader with bid/offer data, and a shared Bloomberg terminal. The only choice? Black or white background for our trading platform.
This lack of choice eliminated distractions and decision fatigue. Retail traders face an overwhelming number of choices—markets, brokers, platforms, chart layouts, indicators, and strategies. Many waste years optimizing a system they never actually follow, constantly second-guessing themselves before they have a body of work worth critiquing. Prop traders get straight to it, refining execution and emotional control instead of endlessly tweaking setups. That is what our time is spent doing.
On a desk with 40+ traders using the same system, those who were gritty and motivated figured out how it could work for them. Others who were less motivated pointed out times when the system failed or was inappropriate, in effect, figuring out how it wouldn’t work for them.
Social Pressure to Conform
A retail trader sitting alone in their home office has little external accountability. If they hit their $100 daily loss limit, they can ignore it, override risk controls, and justify breaking their rules.
At a prop firm, bad habits were immediately noticed. If you had a bad morning, you got pulled aside. If you couldn’t regain composure, you went home. If poor behavior became a pattern, you ended up staying home.
Being surrounded by disciplined traders fostered professionalism. We watched how experienced traders handled losses and wins. There was no outburst, no revenge trading—just execution and composure. You learned that losing trades were part of the game, and emotional control was mandatory.
“You learned that losing trades were part of the game, and emotional control was mandatory.“
– John471
Over my career, I traded in two prop offices among dozens of traders. These were loud, confident, sometimes arrogant individuals. But I never once saw any of them tilt, not once, and I sincerely believe this was due more to the potential embarrassment of acting like a fool in front of peers, as well as the utmost respect we had for our backers capital, which ironically, seems to be significantly more respect than retail traders pay to their own.
Wins were treated with equal temperance. A stated rule was “no cheerleading”. It was not uncommon for a young trader to have some verbal outburst (“Yes!”) after getting risk off in a tense trade, or a big win, etc. Regardless of why, any such utterance was immediately met with a sharp, matter of fact, “No Cheerleading” by the nearest senior trader. I do not remember anyone needing to be told twice.
Closing Thoughts
These differences—structure, limited choices, and an environment enforcing discipline—explain why prop traders succeed at higher rates. Retail traders don’t have firms imposing these guardrails, but they can create their own.
Build structure into your routine. Minimize unnecessary decisions. Add accountability, whether through a trading partner, coach, or strict self-monitoring. The goal isn’t to replicate a prop firm exactly but to apply the same principles that drive success. By doing so, you can close the gap.
John471
CT Head Trader
Man, this is so good. I’ve recently realized a lot of this with my own at-home “work”, and I’ve been making the effort to keep reducing the options, gadgets, levels, distractions, etc., while increasing my focus on what I think is most relevant to my actual performance.
Thank you for sharing your experience and the insight that comes with it. It helps me a lot. I already have this pinned at the top of my browser favorites so I can re-read it regularly. 😉
We are happy to hear you enjoyed it. Thank you for reading it.
Great read. Really hits home. And really is true from the retail perspective.
There is no one creating guard rails, but up to me to enforce my own.
And regarding trading consistently during rth, or lack of time during RTH, definitely hurts.
Glad to hear you enjoyed it.
Such a gem of an article with so much value. Articles like these should be regularly highlighted on CT. Like myself, surely others are missing out on content like these buried within CT’s website.
Glad you enjoyed it!