Passing a prop trading challenge is the dream of many professional and retail traders. The rules are simple: make 10% in a single month or 20 trading days with a similar drawdown value. Even so, many fail to produce even 5% due to the tough market conditions and poor disciplinary approach.
To accommodate these traders, proprietary companies now offer a second chance for free to pass the first stage. Yet many will fail their retry. The repeated question that comes to mind is, how many tries do I really need to pass the trading challenge?
Before we go into the nitty gritty, let’s go through the standard requirements to pass the trading challenge. Other than the profit target and the drawdown, most prop companies will require at least 10 days of trading activity. Some firms will add strict rules, such as the trade should reach a certain number of pips in profits before being closed. News trading may also be prohibited in some instances.
With Riva FX, you have access to unlimited after failing a trading challenge. Traders are not liable for any losses incurred while speculating the markets.
Each failure you incur while trading is a stepping stone toward success. A trader who fails their first challenge due to overtrading can eliminate their problem in the retry. Several chances may be necessary for investors with a bunch of issues.
One way to rectify your mistakes is to journal all of your trades. See what you are doing best and eliminate all the errors to pass the challenge. Unlike Riva FX, where traders can take unlimited tries, all prop firms will charge you a good sum for the third chance.
A trader going through their first try may completely ignore the stated rules. Prop trading may come as a new venture to these individuals who previously traded with no restrictions. As a result, they may blow the demo account within the first week or even less.
Before taking on any challenge, trading on a demo account may be helpful. Place similar restrictions on your strategy as there are while trading on a prop firm. Traders who are novice to this idea may purchase another challenge right away.
Without journaling and rectifying, nothing will change on your second try. Investors who have eliminated their mistakes will find themselves in a better position to win the challenge. Even if the market conditions are worse, they may still have a positive balance to qualify for a free retry at most proprietary companies.
Even if the second try doesn’t work out, you can still give it another go. The vital thing is not to give up.
A good tip is to select the right market conditions before taking the challenge. For example, if you take only short trades during a downtrend, then it would be better to wait for the perfect bearish market nature.
A wide variety of trading algorithms are available for free in the financial marketplace. These are specifically coded to help you pass the challenge. For example, a drawdown control system will close all your positions before they hit a certain level of loss predefined within your settings.
With prop firms, traders are not liable for any losses incurred while trading. There is a starting fee that is reimbursed with the first profit split. So, generally, traders do not face any risk while trading with these companies.
In fact, the risk-reward ratio is entirely in favor of the investor. They get access to millions of dollars in trading capital with minimal investment.
A few important points to note are as follow:
If you follow these steps you will be well on your way to success;
You may need more than one try to pass the prop firm trading challenge. This is completely fine as a retail trader. As mentioned above, grabbing the rules at first can be challenging. The important thing is to continue to strive for better results and earn your place amongst the consistently profitable traders. The final target is managing millions of dollars in funds with absolutely no risk.