Velotrade's Report Highlights Hidden Risks in Prop Trading Firms

A new report from Velotrade sheds light on the often-overlooked regulations governing proprietary trading firms, revealing that the majority of funded accounts are terminated due to rule violations rather than trading failures. The 2026 Prop Firm Transparency Report compares the rulebooks of six firms: Topstep, FTMO, FundingPips, Blue Guardian, HyroTrader, and Velotrade.

According to the report, only about 7% of traders ever receive a payout from their funded accounts, with many closures linked to stringent rules rather than trading performance. Velotrade's CEO, Gianluca Pizzituti, emphasized the importance of transparency in rulebooks, stating that if traders cannot fully understand the potential risks associated with their accounts, the rulebook is inadequate.

The report highlights that a significant number of account terminations stem from hidden rules, such as maximum loss limits and consistency rules that can penalize traders for having a strong day. For example, a consistency rule may restrict how much profit can come from a single trading session, leading to unexpected account closures even when targets are met.

As the prop trading sector continues to grow, with searches for 'prop firm' skyrocketing, the report warns that many new traders may be unaware of the hidden pitfalls in the industry. High-profile firm failures have also raised concerns, with several companies ceasing operations and leaving traders without their payouts.

Velotrade's findings serve as a cautionary tale for prospective traders, urging them to carefully examine the terms and conditions of any prop firm before making a commitment.