7 Secrets Funded Traders NEED to Know

Summary

In this video, a seasoned trader shares seven powerful secrets for maintaining and succeeding with funded accounts from prop firms. Key advice includes avoiding greed, managing risk, and understanding prop firm rules. The trader emphasizes the importance of trading smaller than the account size, staying under the radar to avoid scrutiny, and continuously taking challenges to build a buffer of funded accounts. With over 7 years of experience, the trader reveals strategies for long-term success, offering tips on mindset, risk management, and maximizing payouts while protecting your accounts.

Takeaways

• 😀 **Don't be greedy**: Focus on consistent, small profits (1% per trade) and treat the funded account like it's your own money to encourage careful trading.
• 😀 **Trade smaller than the account size**: For example, if you have a $100,000 funded account, trade as if it's only $10,000 to manage risk and stay within drawdown limits.
• 😀 **Understand the rules of funded accounts**: Prop firms have different rules for funded accounts compared to challenge accounts, such as restrictions on news trading. Always review and understand the rules.
• 😀 **Acknowledge the odds**: Only 7% of traders succeed in getting payouts from prop firms, so be prepared mentally to face challenges and trade smarter.
• 😀 **Take multiple challenges**: Keep taking challenges even after being funded to create a backup of funded accounts, giving you more flexibility and less stress in your trading.
• 😀 **Get to house money**: After paying for a challenge, aim to recover the challenge fee (e.g., $500) with small gains, so you're effectively trading without personal financial risk.
• 😀 **Stay psychologically safe with house money**: Once you've made back the challenge fee, you're effectively trading on the house's money, which reduces stress and improves decision-making.
• 😀 **Hedge for extra security**: Use tools like hedge bots to cover your challenge accounts, ensuring you can recoup your challenge fees even if you fail, and potentially make a profit.
• 😀 **Keep your targets low**: Set a modest profit target (e.g., 1-3%) to avoid attracting attention from the prop firm. Achieve the target, stop trading, and wait for your payout.
• 😀 **Consistency over large profits**: Rather than aiming for high monthly profits, maintain steady, small gains to minimize scrutiny and reduce the risk of account termination by the prop firm.

Q & A

What is the first secret to succeeding with funded accounts?

The first secret is not to be greedy. It's important to keep risk low and trade slowly, treating the account as if it were your own money. This helps prevent overtrading and unnecessary risks.

How should you approach trading a funded account based on its size?

You should not trade the account based on its full size. For example, if you have a $100,000 funded account with a drawdown limit of 10%, you should trade it as if it were a $10,000 account. This ensures you stay within the risk limits and can keep the account long-term.

Why is it crucial to understand the specific rules of each funded account?

Each prop firm may have different rules for funded accounts versus challenge accounts. For example, some firms may allow news trading on challenge accounts but not on funded accounts. Understanding these rules can help you avoid unintentional violations that could cost you the account.

What are the odds of achieving a payout with a prop firm?

The odds are heavily stacked against you. Only about 7% of traders actually achieve payouts from prop firms. Understanding these odds helps you approach trading with the right mindset and realistic expectations.

What is the benefit of taking multiple challenges even after you get a funded account?

Taking multiple challenges and securing more funded accounts creates a backup plan. If you lose a funded account, you can rely on others you've obtained through additional challenges, reducing stress and giving you more flexibility.

What does 'getting to house money' mean in the context of prop trading?

'Getting to house money' means recovering the initial challenge fee once you've received your funded account. By making a small profit (e.g., 0.5-1%), you cover the challenge fee, so you’re no longer risking your own money, which boosts your psychological confidence.

How can using a hedge bot help mitigate losses from failed challenges?

A hedge bot counteracts the trading strategy on your challenge account by placing opposite trades in a live account. This means that even if you fail a challenge, you can still recover the challenge fee, and potentially make a profit.

Why should traders aim to 'stay under the radar' with prop firms?

Staying under the radar means setting low, achievable profit targets (e.g., 1-3%) and avoiding aggressive monthly targets. Prop firms tend to scrutinize accounts with high profit claims, which could result in a denied payout. By keeping expectations low, you reduce the chance of drawing attention and ensure consistent payouts.

How should you manage your trades after hitting your target for the month?

Once you hit your target, stop trading immediately and wait for the payout day. This prevents overtrading and ensures you don't risk losing profits by trying to chase higher returns.

What psychological benefits come from trading with 'house money'?

When you're trading with house money (i.e., the initial challenge fee is covered), you reduce psychological pressure. You feel less stressed about risking your own funds and are more likely to make disciplined, rational decisions without fear of losing personal money.