Trading Wisdom: 3 Insights Gained After Blowing 30+ Prop Firm Challenges
6 mins read

By: sarvesh

Trading Wisdom: 3 Insights Gained After Blowing 30+ Prop Firm Challenges

The Best Time to Be Trading

As someone who has done over 35 plus challenges to finally get 7 figures worth of Prop Firm Capital, here are my top 3 pieces of advice. But be warned, my third one might be a little harsh, but it is the truth.

Before we get into all of that, I just want to say, guys, that we are at the best time to be trading, especially with Prop Firms, especially nowadays with the rules being much easier. Some Prop Firms are going on unlimited trading days. They're not rushing us; they're not making us make 10% in 4 weeks.

We also have a bunch of free content online nowadays. We have ICT for the ICT traders out there. He's pushing our free content on YouTube every week. We are definitely blessed, and we are in the best position to succeed in this game. There is no other time where you're not in the best position to succeed. So, I just wanted to say shout out to Prop Firms and just shout out to all the opportunities we have now in this industry to succeed.

The Role of Luck in Challenges

Now let's get to the article. So advice number one is actually a quote, and that quote is:

"The harder you work, the luckier you get."

Now passing a challenge does require some sort of luck. It's luck in the sense that there are trade setups present and luck in the sense that the market conditions are good. Because sometimes there are weeks where there are no trade setups present, and there is nothing clean. Or maybe we go through a losing streak, and the fact is every trader goes through a losing streak, no matter how good they are.

So imagine getting a challenge, and then you go through a losing streak, you've blown the challenge. But imagine you start a challenge, and the market conditions are great. There are setups left and right, or you even have a winning streak, and you easily pass a challenge. That requires some sort of luck. That's why if you do fail a challenge, sometimes it might just be that the market conditions were not great, and you weren't able to hit that 8% target or 10% target within a month.

Now guys, this is what I'm talking about. This is Umar Ashra trading journal for 2022 with Tradezella. As we can see here, he made a million dollars trading in 2022. And this is the example I want to show you guys. This millionaire day trader. Was he profitable every month? Was he profitable every week? Were there certain months way better than others? Yeah, so this is what I mean. If he would have started a Prop firm challenge in December, which seems to be his best month, he would have passed that easily. Whereas if he would have started a Prop firm challenge in March, where he didn't find any setups and had a losing streak, he would not have passed the challenge. The same goes for May; it seems that he had a negative month during May. So if you would have started the challenge in May, you would not have passed the challenge. So this is basically what I mean by a little luck is required to pass these challenges.


Exploiting Challenges for Success

Now, my second piece of advice, which I didn't realize until I had done 20 or 30 challenges, is that there are ways to exploit your challenges to ensure you get at least a free retry. I did a whole article on it, and you should go check it out, but basically, if you're in profits in the last week, you're up 3-4%, and you have to hit 8%, and you were originally just risking 1%, it's time to deviate from your trading plan and focus on how you can use that 3% profit to try to reach that 8% goal or, at the very least, secure a free retry.

For example, if it's the last week and you think there's only one trade left, maybe risk 2.99% of your profit to either get a free retry or to pass the challenge.

The Reality of Funded Accounts

Advice number three is this: Just because you got funded does not mean you have made it. There were many times in my trading career where I thought, "Oh, I just got funded, now I'm gonna be rich," and what ended up happening was I lost that funded account. Then the same thing happened again; I got funded again, thought I was gonna get rich, and lost it again.

There's also a statistic out there, as a prop firm owner mentioned, which is that only 30% of funded traders make it to their first withdrawal. Only 30%. So, that's a pretty crazy statistic. I always say there are mountains in this game:

  1. The first mountain is actually getting funded, and that mountain is the highest because it's the hardest.
  2. The second mountain is getting your first payout.
  3. The third mountain is being consistently profitable with that funded account.

The Role of Greed in Account Loss

And also, talking with a prop firm owner, he told me the number one reason why people blow their accounts is because of greed. They get a little bit of profits, and instead of waiting for a payout and being satisfied with it, what they do is they keep on trading their profits until they either make a lot or they end up losing the account. What usually ends up happening is they end up blowing the account.

So, guys, if you have a funded account and you've finally made some good profits, stop trading and wait for the first payout. At least get your original investment back. Once you get a good payout that you will be satisfied with, you might realize, "Oh, I still have to wait a week for my payout. Let me keep trading this account; I have a lot of profits in it," and you guys end up losing it. So please, guys, once you're satisfied, get that withdrawal and get that first refund back. Then, once you get the original investment back, proceed to do whatever you want to do.

When Angelo, the CEO of TFT, said that the statistic is that only 30% make it to their first withdrawal after getting funded, that's pretty crazy - only 30%. I would think it's a little more, but my guess is that psychologically or due to bad trading habits during the challenge and verification, they think 8% to 10% is a realistic target. And, guys, that's not a realistic target. Hedge funds don't even aim for 8 to 10% every month. These hedge funds aim for maybe 10 to 20% a year. So don't be fooled by social media into thinking it's very realistic to keep achieving these kinds of returns month after month after month.


The Psychological Impact on Funded Accounts

The main thing is, as I mentioned, many people do lose their funded accounts. One reason could be the stress they experience once they finally get that funded account. They think, "Okay, this is real money now. If I lose this trade, I'm actually losing real money. If I win this trade, I'm making a lot of money." Another thing is they see a nice clean trade setup in their trading plan, which starts with a risk of 0.5% or maybe 1%.

But they think, "This trade setup is so clean that if I enter with leverage, I can make way more money." And that often leads to them losing. If they lose that trade, then they become emotionally distressed, and it can start a downward spiral of losing the entire account.

So, thank you guys for reading this article.

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