The SECRETS Prop Firms DON'T WANT you to KNOW
Summary
TLDRThis video script offers insights into the world of prop trading firms, emphasizing the need for traders to adopt a sustainable approach rather than chasing quick payouts. The speaker, an experienced trader, advises on risk management, the importance of profitability, and the psychological aspect of trading. They suggest starting small, not risking more than 1% per trade, and waiting at least two weeks between challenges to reflect and improve. The goal is to outsmart prop firms by understanding their strategies and managing risk effectively.
Takeaways
- đ Prop firms donât want you to win; itâs a numbers game where 95% of traders fail, and firms capitalize on this.
- đŒ Your prop firm results reflect your current trading level. You must be profitable in general before expecting success in a prop firm challenge.
- đ Risk management is critical to success in prop firm challenges. You should not risk more than 1% per trade.
- âł Donât rush through challenges. Limit yourself to one challenge per month, and avoid rushing into another if you fail.
- đ If you lose a challenge, take at least two weeks to reflect, review your mistakes, and adjust your strategy before trying again.
- đĄ Choosing the right account size is crucial. Start smaller if large accounts make you feel uncomfortable and lead to emotional trading.
- âïž Aim for long-term profitability rather than chasing big payouts. A gambling mentality is what prop firms expect and capitalize on.
- đ§ Neutralize emotions around moneyâboth what you spend on challenges and the profits you aim to makeâso you can make rational trading decisions.
- đ The long-term strategy is to keep leveling up by passing challenges, getting payouts, and improving your game over time.
- đ§ Prop firms play a psychological game by offering large accounts with lower drawdown, triggering emotional decisions in traders. Stay ahead by managing emotions and strategy.
Q & A
What is the primary goal of prop firms according to the speaker?
-The primary goal of prop firms is not to make traders rich but to capitalize on the fact that 95% of traders fail. Prop firms operate as a numbers game, where only a small percentage of traders succeed, making the firms profitable in the long run.
What is the key difference between successful and unsuccessful traders in prop firm challenges?
-The key difference is risk management during drawdowns. Successful traders manage their risk well, ensuring they donât blow their accounts during periods of loss, while unsuccessful traders often take excessive risks and fail to recover from drawdowns.
What is the first rule to passing prop firm challenges successfully?
-The first rule is to be profitable. Traders need to have a profitable trading strategy and a strong understanding of risk management before attempting prop firm challenges.
Why does the speaker recommend not risking more than 1% per trade in a prop firm challenge?
-Risking more than 1% per trade increases the chances of failing the challenge due to potential drawdowns. By limiting risk to 1%, traders give themselves more room to recover from temporary losses and avoid blowing their accounts.
What is the speaker's advice on how many prop firm challenges a trader should attempt per month?
-The speaker advises traders to limit themselves to one challenge per month. Attempting more than one can lead to desperation and poor decision-making, especially if a trader is not fully prepared or hasn't reflected on past mistakes.
What should a trader do after failing a prop firm challenge, according to the speaker?
-After failing a challenge, traders should take at least two weeks or more to reflect on their mistakes. During this time, they should analyze what went wrong and how to fix those issues before attempting the next challenge.
Why does the speaker recommend choosing a smaller account size if a trader fails a prop firm challenge?
-The speaker recommends choosing a smaller account size because many traders are uncomfortable with large sums of money, which triggers emotional responses that lead to poor decisions. By reducing the account size, traders can build confidence and reduce the pressure of managing larger sums.
What psychological factor do prop firms exploit by offering large account sizes?
-Prop firms exploit the fact that most traders are not mentally prepared to handle large account sizes. The large numbers trigger emotional responses, making traders more likely to fail and make irrational decisions.
What is the long-term strategy for being profitable with prop firms according to the speaker?
-The long-term strategy involves having a profitable trading system, effective risk management, taking only one challenge every two months, and choosing the right account size. By following these steps, traders can increase their chances of consistent payouts and long-term profitability.
Why does the speaker caution against aiming for large payouts with prop firms?
-Aiming for large payouts encourages a gambling mentality, where traders take high risks to make high rewards. This approach increases the likelihood of failure, which is exactly what prop firms want, as it leads to more challenge failures and lost money for traders.
Outlines
đ The Reality of Prop Firms and Why They Donât Want You to Win
In this paragraph, the speaker explains the harsh reality of prop trading firms. These firms are not designed to make traders rich but rather to capitalize on the fact that 95% of traders fail. The speaker stresses that even though profitable traders serve as good marketing for these firms, the majority of participants will not receive a payout. The key takeaway is to approach trading with prop firms as a numbers game and to set rules that increase the odds of success, such as having a profitable trading strategy and understanding risk management.
đŻ Two Types of Traders and How to Approach Prop Firms
This section highlights two types of traders: those who try to sustain their accounts long-term and those who aim for large payouts quickly. The speaker recommends the sustainable route, advising traders not to risk more than 1% of their capital per trade, to leave room for inevitable drawdowns, and to focus on long-term profitability. By avoiding a high-risk 'gambling mentality,' traders can increase their chances of success. The speaker emphasizes that understanding risk management is critical to passing challenges consistently.
Mindmap
Keywords
đĄProp Firms
đĄChallenges
đĄRisk Management
đĄDrawdown
đĄTrading Strategy
đĄSustainable Trading
đĄMindset
đĄLaw of Large Numbers
đĄAccount Size
đĄEmotional Trading
Highlights
Prop firms are not in the business of making traders rich; they capitalize on the fact that 95% of traders fail.
Your performance with prop firms is a reflection of your current state of trading; profitable traders are profitable everywhere.
The first rule of prop firms is to be profitable and understand risk management.
There are two types of traders: those who try to keep their accounts long-term and those aiming for one big payout, which is riskier.
Do not risk more than 1% on a prop firm challenge to give yourself room for potential drawdown without failing the challenge.
Focus on long-term profitability over 100,000 trades, rather than short-term results over the next five trades.
It's recommended to take no more than one prop firm challenge per month, to ensure a sustainable approach.
If you lose a challenge, wait at least two weeks before trying again to reflect on what went wrong and how to improve.
Traders often fail because they are not comfortable with the account size they are trading, leading to emotional decisions.
Prop firms give traders large accounts to create emotional stress, knowing it will lead to more failure.
If you fail a challenge, lower your account size for the next one to find what you're most comfortable with.
Proper risk management, trading the right account size, and not over-trading challenges increase the likelihood of long-term success.
Eventually, experienced traders can start playing an advanced game of balancing risk-to-reward with prop firm challenges.
Passing prop firm challenges consistently can lead to higher payouts and refunds, but beginners should focus on the long-term strategy first.
The speaker emphasizes that even though they personally take bigger risks, they recommend beginners follow the steps to minimize failure.
Transcripts
you are treating prop firms the wrong
way and I say this as someone that has
done over 30 challenges with prop firms
and has been understanding the ins and
outs about the industry and seeing many
people succeed and many people fail so
let me save you a lot of failed
challenges a broken mindset and a lot of
desperation let's start by stating the
obvious prop firms don't want you to win
for them this is all a numbers game
because they understand that even
profitable Traders are just perfect
marketing for them they are not here
trying to make you rich even though they
make it seem as if that's the case they
are here trying to capitalize on the
fact that 95% of Traders fail in any
Market be it on Brokers especially
unregulated Brokers or even prop firms
95% of Traders are never going to get a
payout a withdrawal whatever it is but
that's just the reality of trading with
a prop firm or trading as a retail
Trader in general so if this is just a
game for them then let's treat it like
such let's define some rules to put the
odds in our favor and this is going to
be the secret to passing prop firms more
often than not first of all I think that
I say this every single time but your
prop firm results are a reflection of
where you are at in your trading right
now and what I mean by this is that you
cannot expect to be unprofitable in the
market in General yet going for prop
firms and being profitable there
obviously the first rule for prop firms
is be profitable have a profitable
trading strategy and understand risk
management I'm personally thinking of
doing a whole webinar just focused on
risk management and if you guys want to
see that happening then make sure to
leave a like and let me know in the
comments that you want to see the risk
management webinar it's going to be the
most in-depth webinar you've ever seen
on risk management with prop firms and
personal Capital but then once we get
that out of the way I want you to
understand that there's two types of
traders that go for prop firms so
someone that tries to keep their account
for longer and someone that tries to
make a lot of money with one payout and
it is what it is I would recommend 99%
of Traders watching to actually take
prop firms in a sustainable route and
the reason for this is because if you
are aiming for a big payout understand
that you're doing exactly what the prop
firm wants you to do you're having a
gambling mentality you're going to risk
High to make high and the probability of
you losing is way higher and as I said
in the beginning that's exactly what the
prop firms want but now if your goal is
to be a profitable Trader and not to
fill up the prop firm's Pockets then you
need to listen carefully you should not
be risking more than 1% on a prop firm
challenge because you want to give
yourself room for the possibility of
going into a little bit of draw down
while still not failing the challenge
every Trader goes through draw down now
the difference between profitable
Traders and unprofitable Traders is
their risk management while they're drw
down are you blowing an account because
you lost three Trad traes or are you
playing the long game in understanding
that as a profitable Trader you will be
profitable over 100,000 traits and not
over the next five it doesn't matter
what happens in the next five it matters
what happens in the next 100 and a th000
trades That's the Law of large numbers
that you can't predict the outcome of
the next few trades but you can predict
the outcome mathematically of the next
th000 trades so for you that are
listening and are actually trying to
become profitable with prop firms
understand and risk management is number
one now the next rule to have the card
stacked in your favor is that you should
not be doing more than one challenge per
month and one challenge per month is
actually a lot let me explain with the
fact that time limit right now is
industry standard even fdmo has no time
limit you should not be going through
10% draw down and still thinking that
you have a profitable Edge on your side
because there is the possibility that
either your mindset is not right or your
stri strategy because it is not normal
for someone to either go through 5% of
available capital in one day or 10% in a
month so if you're following the other
two rules you should not be trading more
than one challenge per month but what do
prop firms try to do what's their secret
well they show you the success of the
people that took a lot of challenges
risked a lot and made this big payout
right but that's exactly what they want
you to think while a profitable Trader
which they don't want to think like one
understands that they should not be
going through so much draw down if they
have a profitable strategy and so the
next rule to our game of being
profitable with prop firms is if you
lose the challenge wait at least 2 weeks
or more until you buy and try your next
challenge and why am I saying this well
because you need to understand that it's
not like this that you simply go from
unprofitable to profitable and so if
you've just lost a challenge that means
that there's something that you need to
fix you you need to go back to the
drawing board you need to go back to the
charts and understand what you did right
and what you did wrong and for that two
weeks or month that's what you are going
to do you are going to reflect on the
mistakes that you did through the
challenge you are going to write
everything out and then at the front you
are going to write how you are going to
solve that the next time you try to go
for such Challenge and this takes me to
the number one issue everyone goes
through and that's the fact that you are
trading an account that is way way too
big you're not comfortable with the
amount of money you spent on the
challenge and you're not comfortable
with the numbers that you are seeing on
your computer on your charts on your
phone whatever it is because you are not
ready yet mentally to take on such big
of a challenge and so if you lose a
challenge I want you to dial it back I
want you to go to half the account size
that you just lost so if you lost a 100K
challenge go for a 50k if you lost a 50k
challenge go for a 25k and then you will
be able to understand which account size
you are most comfortable with for the
longest time I was doing 100K 200k
Challenge and I was always super
uncomfortable with the possibility of
losing 500 400 600 or dollars and I was
failing because of that the pressure
always got to me and when you're doing a
challenge you don't want to feel the
pressure of oh my God if I lose this
challenge then I don't have money for
the rest of the month you don't want to
feel that you want to remove your mind
from the numbers that you are seeing on
the charts you want to become neutral
neutral to the money that you spent and
neutral to the money that you're making
and you need to trust me here when I say
that in due time you will take bigger
challenges but take it one step at a
time again let me tell you something
that is not so obvious about props why
do you think that they give you a 100K
account with 10% draw down instead of a
10K account with 100% draw down well the
reason they do this is because they know
that people are not ready for the amount
of money that they're seeing on the
charts that is going to trigger an
emotion that then will make them more
likely to fail because else they would
just give you the 10K they would give
you the $10,000 in an account and you
would have the whole available drw down
but that does not happen does it they
give you an account that is too big for
regular people to even fathom so they
make emotional decisions and so you need
to be one step ahead of the curve and
understand this so in reality if you
have a profitable strategy proper risk
management meaning you are not risking
more than 1% on the challenge and you
are not losing more than one challenge
every two months adding on to that the
fact that you choose the right account
size the probability of you making money
with prop firm increases and that is how
you are going to get an edge in the prop
firm industry that is how you are going
to make money long term because I do
believe that prop firms are here to stay
and you can check some of them in the
description and then for the people that
stick to the end and have not called me
yet a hypocrite in the comments because
the reality is I do risk more on the
challenges that is how you will make it
long term because that's the type of
Trader that you want to be there comes a
point where you will go through this
journey of doing the challenges
consistently passing getting some
payouts refunds Etc and that's when you
can start playing an advanced game and
that's the game of Risk to reward with
prop Firs this means how much money are
you putting in and how much money are
you putting out becomes a whole game in
of itself which is what some Traders do
but I still don't recommend it that is
the game of passing challenges quick and
trying to get a big payout a refund
whatever it is also this will make you
fail more challenges but again you will
understand that this is a game pop firms
are playing a game with you and that if
you do these steps right eventually you
can level up and reach the goals that
you are trying to reach so I hope you
guys enjoyed if you guys want to see
that webinar then let me know by leaving
a like and a comment and I will see you
next week peace
Weitere Àhnliche Videos ansehen
How to Grow Small Trading Accounts FAST in 2024
How to Grow SMALL Forex Account with little money (No Bullsh*t Guide)
Can being a funded trader make you rich? - Honest opinion
Why 99% Traders FAIL | Prop Firm Trading
7 Prop Firm Red Flags Guide (2024 Update)
How to Trade Like The Big Banks | Smart Money JP Morgan Trader Kathy Lien
5.0 / 5 (0 votes)