Why you Suck At Trading Prop Firms

Summary

In this video, the trader shares how they secured over $2 million in prop firm funding, including $750,000 with Topstep, and provides a blueprint for consistent trading success. Key insights include developing a repeatable, logical trading model, understanding fractal patterns across multiple timeframes, and aligning trades with candlestick expansions. The video emphasizes controlling your next trade, disciplined risk management—especially in futures accounts—and using a structured, mechanical framework for entries. The creator also highlights the advantages of aggressive but calculated strategies in futures prop firms and offers selective one-to-one mentorship for traders seeking personalized guidance and advanced techniques.

Takeaways

• 😀 Consistency is key: Trade a repeatable model rather than different strategies each time.
• 😀 Develop a trading model based on logic, narrative, and repeatable patterns that generate profit.
• 😀 Backtest and forward test your model, collecting charts and statistics to validate it.
• 😀 Document your model thoroughly using Notion or folders to track examples and performance.
• 😀 The only controllable aspect of trading is your next trade and its entry point.
• 😀 Futures prop firms require a more aggressive approach compared to CFD prop firms.
• 😀 Use fractal principles: larger candles are composed of smaller time frame candles, and entries should align with these smaller candles.
• 😀 Manage risk intelligently: start small, gradually increase risk, and build a buffer to allow for scaling.
• 😀 Accumulation, manipulation, and distribution sequences are crucial for timing entries correctly.
• 😀 Aggressive but structured trading in futures prop firms can significantly increase account growth.
• 😀 Know your statistics: win rate, average risk-reward, and long-term profitability guide trading decisions.
• 😀 Discipline and following your model strictly are more important than guessing market moves.
• 😀 Mechanical entry strategies are valuable, but high-level frameworks can be understood and applied without them.

Q & A

What is the main issue most traders face according to the speaker?

Most traders struggle with trading inconsistently and taking random trades without a clear, repeatable framework. They often lack a predictable model for their trades.

How does the speaker recommend traders should develop a trading model?

The speaker recommends that traders build a model based on logic and market narratives. This involves identifying repeatable trade setups, collecting data and charts, and rigorously backtesting and forward testing the model.

Why is it important to have a clear framework for your trades?

A clear framework helps traders predict what their next trade will look like, allowing them to control their entries and stay disciplined, rather than reacting impulsively to market movements.

What’s the key difference in approach between futures and CFD prop firms?

Futures prop firms require a more aggressive approach. In futures trading, traders can take larger positions with a higher risk-to-reward ratio compared to CFD prop firms, which tend to have stricter risk limits.

How does the speaker approach risk management in futures trading?

The speaker suggests starting with a smaller risk per trade (e.g., $450 on a $150,000 account) to allow for more shots at success. As momentum builds, the risk can be increased to take advantage of profits. This helps avoid gambling and ensures safer trading over time.

What is the 'fractal' concept in the speaker’s trading model?

The fractal concept in the speaker’s model refers to the idea that price action at higher time frames (e.g., 4-hour candles) is made up of smaller time frame candles (e.g., 1-minute or 15-minute candles). By aligning smaller time frames with larger ones, traders can predict price direction more effectively.

Why is the speaker’s trading model described as ‘mechanical’?

The model is mechanical because it follows a strict, repeatable process based on logical patterns and statistical data. The speaker emphasizes that once the model is established, the entry criteria should be applied consistently without deviation.

What role does statistical data play in the speaker's trading success?

Statistical data is crucial as it helps the trader understand the win rate, average risk-to-reward ratio, and the overall effectiveness of the trading model. With a solid understanding of these stats, traders can confidently follow their model and expect consistent results over time.

What is the significance of risk-to-reward ratios in the speaker’s strategy?

Risk-to-reward ratios are essential for ensuring that trades have a favorable expected outcome. The speaker often uses aggressive ratios (e.g., 1:3 to 1:6) during the challenge phase to maximize potential gains, especially when the model is well-tested and proven.

What advice does the speaker give regarding prop firm risk and trading aggression?

The speaker advises traders to be aggressive in their approach to futures prop firms, especially in the challenge phase. By maintaining a disciplined, systematic model and increasing risk in line with building account momentum, traders can maximize returns and capitalize on the larger trading opportunities futures prop firms offer.