Breakout Prop Firm is a proprietary trading firm focused on providing cryptocurrency traders with access to significant trading capital. Established in late 2023, the prop firm caters to a niche market, emphasizing cryptocurrency trading across a broad spectrum of digital assets. While it offers structured evaluation processes and competitive profit-sharing models, traders must carefully consider the firm’s rules, operational structure, and potential red flags before committing.
Who is Breakout Prop Firm?
Breakout Prop Firm was established in November 2023 to provide cryptocurrency traders with an avenue to access funded trading accounts. Unlike firms that focus on a mix of financial instruments, Breakout Prop Firm specializes in cryptocurrencies, aiming to deliver deep liquidity and tight spreads via its proprietary trading platform. Its services are designed for traders who want to focus exclusively on crypto trading with access to tier-1 exchange liquidity.
Key highlights of the firm include:
- Specialization in Cryptocurrencies: Offers a wide selection of over 100 crypto assets, including major coins, altcoins, and perpetual futures contracts.
- Proprietary Trading Platform: Known as the Breakout Terminal, this platform integrates features like advanced order types, TradingView charting tools, and seamless execution.
- Focus on Trader Development: The firm positions itself as a crypto-native solution, offering tools and resources tailored to the specific needs of cryptocurrency traders.
Evaluation Process and Rules
Breakout Prop Firm uses a structured evaluation process to determine a trader’s suitability for managing funded accounts. The evaluation focuses on profitability and risk management, with strict rules to ensure consistency and discipline.
Evaluation Structure
- Step 1: Initial Evaluation
- Traders must achieve a 10% profit target (e.g., $500 for a $5,000 account).
- Risk parameters include:
- A 4% daily loss limit.
- A 10% overall maximum drawdown.
- No time limits are imposed, allowing traders to progress at their own pace.
- Step 2: Advanced Verification
- For some account types, an additional step is required, typically with a reduced profit target and similar risk parameters.
Funded Accounts
After successfully passing the evaluation, traders receive access to funded accounts with capital ranging from $5,000 to $100,000. These accounts come with specific rules that traders must follow:
- Leverage:
- Bitcoin (BTC) and Ethereum (ETH): Up to 5:1 leverage.
- Altcoins: Up to 2:1 leverage.
- Trade Management:
- Holding positions overnight and over weekends is allowed.
- Strategies such as scalping and swing trading are permitted within the set risk parameters.
- Prohibited Practices:
- Copy trading, latency arbitrage, and excessive use of high-frequency trading methods are strictly forbidden.
- Violating these rules can lead to immediate termination of the account and forfeiture of profits.
Profit Sharing and Payouts
Breakout Prop Firm offers competitive profit-sharing models for traders who successfully pass the evaluation.
- Standard Profit Split: Traders keep up to 80% of the profits generated.
- Enhanced Profit Split: For traders who opt for additional services or perform consistently, the profit split can increase to 90%.
- Scaling Opportunities: High-performing traders can scale their accounts and achieve a profit split of up to 95%.
- Payout Frequency: Profits are distributed bi-weekly, with payouts processed within 3-5 business days.
Red Flags and Concerns
Despite its appealing offerings, several red flags and concerns warrant attention:
1. Strict Risk Management Rules
The firm enforces rigid daily and overall loss limits:
- Daily Loss Limit: Capped at 4% of the account balance. This includes unrealized losses, making it challenging for traders to manage positions during volatile market conditions.
- Overall Drawdown: Fixed at 10% of the initial account balance, leaving little room for recovery after significant losses.
Why It’s Concerning:
These rules can stifle trading strategies, especially during high-volatility periods common in cryptocurrency markets.
2. Proprietary Trading Platform
Breakout Prop Firm requires traders to use its proprietary Breakout Terminal. While the platform includes basic features like advanced order types and TradingView charts, it lacks the depth and familiarity of industry-standard platforms like MetaTrader 4 (MT4) or MetaTrader 5 (MT5).
Why It’s Concerning:
The platform’s performance under high trading volumes or volatile conditions is unproven, and experienced traders may find the lack of customization options limiting.
3. High Evaluation Costs
The firm charges significant fees for its evaluation programs, which vary based on the account size:
- $55 for a $5,000 account.
- $150 for a $25,000 account.
- $350 for a $50,000 account.
- $900+ for a $100,000 account.
Why It’s Concerning:
These fees are non-refundable, adding financial risk for traders who fail the evaluation. Compared to other proprietary trading firms, Breakout Prop Firm’s fees are on the higher end, with fewer guarantees of success.
4. Limited Operational History
As a newly established firm, Breakout Prop Firm has not yet built a solid track record. Its ability to consistently fund traders, process payouts, and maintain operational stability over time remains uncertain.
Why It’s Concerning:
New firms often face challenges with scaling operations, ensuring timely payouts, and building trust within the trading community.
5. Transparency Issues
While the firm provides basic information about its offerings, some critical details remain vague, including:
- How profit splits are adjusted for scaling opportunities.
- Specific terms for scaling accounts.
- Deductions or fees applied during payouts.
Why It’s Concerning:
Lack of transparency can lead to confusion and mistrust, especially when traders encounter unexpected terms or conditions.
6. Lack of Community Feedback
Being a new firm, Breakout Prop Firm has limited user reviews or testimonials. This makes it difficult to assess the experiences of other traders and evaluate the firm’s reliability.
Why It’s Concerning:
Without feedback from existing users, prospective traders are left with little evidence to trust the firm’s claims or promises.
Conclusion
Breakout Prop Firm offers a unique proposition for cryptocurrency traders, with access to a wide range of assets, structured evaluations, and competitive profit-sharing models. However, its strict rules, reliance on a proprietary platform, high evaluation fees, and limited track record raise several red flags.
For traders considering Breakout Prop Firm, it’s crucial to weigh these concerns against their trading goals and explore alternative proprietary trading firms that may offer better transparency, flexibility, and proven reliability. Conduct thorough research and ensure the firm aligns with your trading style before committing.