#570: Every Trader Must Know About Prop Firms

Every Trader Must Know About Prop Firms

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#570: Every Trader Must Know About Prop Firms

In this video:
00:21 – Tips and information to help you pass a prop firm challenge.
00:52 – Become profitable on your own account first.
01:55 – Keeping drawdowns low and your risk per trade low.  
02:57 – Take your time and don’t rush the process.
04:00 – Open multiple prop firm accounts.
05:11 – My 17 minutes Masterclass and Book a Call.
05:20 – Blueberry Markets as a Forex Broker.
05:51 – Comments, Like & Subscribe.

So you want to know how to pass a prop firm challenge? Let me give you some tips that can ensure you’ll do that right now.

Hey, traders! Andrew Mitchem here at The Forex Trading Coach with video and podcast number 570.

Tips and information to help you pass a prop firm challenge.

Today I’m going to give you some tips and information to help you pass a prop firm challenge. So first of all, what is a prop firm? Well, there are companies out there that will give you money to trade on their behalf for profit share.

Once you’ve proven to them that you can trade properly within that low drawdown criteria and then understand the worth low drawdown criteria, because after all, it’s their money, it is not yours and you have to meet their rules in order to pass a challenge.

Become profitable on your own account first.

Now, first of all, I suggest that you forget prop firms and you go back to basics and you make sure that you are, first of all, profitable, all on a demo account and then a live account of your own.

It doesn’t really matter how big that live account is of your own. But make sure that you are consistently profitable on that first with low drawdowns. The reason I say that is that when you get on to the prop firm challenge, the numbers increase. You might have been trading a 5 or $10,000 live for kind of your own, and all of a sudden now you’re on $100,000 with a prop.

From now, sure, you start on a demo account, but the numbers can be quite scary to start with, and it can be quite off putting. So what you have to do is make sure that you trade your own personal live account in the same way and same conditions that you would the prop firm when you go on to that.

Otherwise you just wasting your money and throwing it away and don’t even bother start on the prop firm. So treat this real. Treat it like a business. It is, you know, serious stuff here.

Keeping drawdowns low and your risk per trade low.  

So you open up your prop firm challenge and they give you 100,000 demo. Okay. They will probably have a rule such as, like a maximum 5% drawdown.

Why? Well, it’s their money, not yours. Today we’re starting off and we’re on a demo. I get that it’s not real money, but when you go on to real money, you need to trade it the same way. So let’s say we have a 5% drawdown there. That means your account starting at 100 cannot go below 95,000. Otherwise they close the account on the demo.

And of course, the saying would be on the real. So what are you going to do to ensure that you have low drawdowns? Well, the most obvious thing is to have low risk per trade. I personally tra