In the realm of professional trading, passing a prop firm challenge is considered a significant achievement.
As a seasoned trader with over a decade of experience, I have successfully navigated several prop firm challenges and honed a set of cardinal rules that have underpinned my success.
In this article, I will share these golden rules with you, aiming to aid your journey of passing prop firm challenges and maturing into a victorious trader.
The Cornerstone Rule: Unwavering Adherence to Your Strategy
The first and paramount rule to conquer any prop firm challenge is to faithfully adhere to your chosen trading strategy. Whether you are trading manually or using Expert Advisors, it is crucial to stick to your strategy’s guidelines. Even when your gut tells you the market is moving in a certain direction, if your strategy dictates you to buy, then buy. Compliance with your strategy will shield you from impulsive decisions driven by fear or emotion, which are often the precursors to losses.
Start Small, Dream Big
A common mistake many rookie traders make is diving headfirst into high-stake challenges, eyeing immediate funding of colossal sums. The allure of quitting their day job and earning a living from a few hours of trading is too strong to resist. However, prop firm challenges are designed to fund only the cream of the crop. Despite the trading objectives seeming simple on the surface, they are far from easy to achieve.
Recent studies reveal that a staggering80 to 99% of traders fail. With prop firm challenges, it’s not just about winning or losing; it’s about being profitable while meeting specific trading targets, making it an uphill battle. Less than 1% of traders who undertake the challenge emerge victorious and receive funding.
The smarter approach is to participate in multiple small challenges. Instead of a single 200K FTMO Challenge, consider partaking in five smaller 10K challenges. The smaller challenges would cost you less and provide ample time to prove not just to the FTMO but also to yourself that you are prepared for a bigger challenge. You can reinvest the earnings from a funded 10K challenge into a larger challenge.
The masterstroke here is to start with a 10K Challenge once, pass the challenge, pass the verification, and get funded. The initial rewards you draw can be used to finance a 200k Challenge. If your first attempt doesn’t yield success, you can take another shot, as you would be using a minor portion of the money you would have otherwise lost on the 200k challenge.
Patience is a Virtue in Trading
In trading, patience is a virtue. Your goal should not be to rush into the more expensive challenges but to successfully navigate through the smaller challenges while honing your skills. Most people falter because they accelerate through the process.
Don’t be misled by YouTubers who claim to breeze through FTMO challenges. Passing FTMO challenges is no cakewalk and requires time. Take your time and pace yourself. You have an entire month at your disposal, which typically translates to more than 20 trading days. If you miss the 10% target but manage to meet all the training objectives, you can typically request a free retake. Remember, influencers and YouTube content creators are primarily content creators. Their primary goal is to garner as many views as possible. Their trading success may not be as assured as they portray it.
The Challenge is Only the Tip of the Iceberg
Succeeding in the challenge is merely the beginning of your journey. You still have to navigate through the verification process and secure funding before you can start reaping actual profits. Therefore, it’s crucial to have a profitable trading strategy that consistently delivers results over time.
Don’t let a handful of lucky trades inflate your confidence. Instead, perceive the challenge as an opportunity to assess your risk and trading objectives and refine your trading strategy. This will enable you to generate profits consistently, not just through occasional lucky trades.
If your initial attempts are unsuccessful, don’t be disheartened. You can always learn from your trading blunders and make necessary adjustments to evolve into a better trader. Starting with a demo account or a free trial can offer an excellent platform to practice without risking your capital.
Concluding Thoughts
Remember, the journey to becoming a successful trader is a marathon, not a sprint. It demands time, patience, and effort. However, armed with the right mindset and strategy, your goals are within reach. Happy trading, and enjoy the rest of your day!
