{"id":130,"date":"2020-07-06T22:24:55","date_gmt":"2020-07-06T14:24:55","guid":{"rendered":"https:\/\/enfoid.io\/doc\/?p=130"},"modified":"2024-07-17T10:27:47","modified_gmt":"2024-07-17T02:27:47","slug":"how-to-never-fail-prop-trading-challenges","status":"publish","type":"post","link":"https:\/\/www.enfoid.io\/doc\/company\/2020\/07\/how-to-never-fail-prop-trading-challenges\/","title":{"rendered":"how to NEVER fail Prop Trading challenges"},"content":{"rendered":"<p>A few simple &amp; easy steps to ensure never to fail a trading challenge or live trading.<br \/>\nthis works for almost all Proprietary Trading Firms, the content below is based on <a title=\"\" href=\"https:\/\/www.enfoid.com\/prop\" target=\"_blank\" rel=\"noopener noreferrer\">EnFoid Proprietary Trading<\/a><!--more--><\/p>\n<p style=\"text-align: center;\"><a class=\"btn btn-sm\" href=\"#getreal\">Get Real<\/a> <a class=\"btn btn-sm\" href=\"#managerisk\">Risk Management<\/a>\u00c2\u00a0<a class=\"btn btn-sm\" href=\"#preventdisqualification\">Prevent Disqualification<\/a>\u00c2\u00a0<a class=\"btn btn-sm\" href=\"#tools\">Tools to help<\/a>\u00c2\u00a0<a class=\"btn btn-sm\" href=\"#understanding\">Understand the business<\/a><\/p>\n<p><a name=\"getreal\"><\/a><\/p>\n<h3>1. Getting Real<\/h3>\n<p>First, you need to keep these things in mind, most of which are listed here if <a href=\"https:\/\/the-bitcoinevolution.com\/\">visit this site<\/a>.<\/p>\n<blockquote><p>If you can not accept and live with any of the points below,<br \/>\nbetter save the time and money for something else.<\/p><\/blockquote>\n<ul>\n<li><strong>NO Propfirm on this Planet has any interest in you making fast money!<\/strong><br \/>\nFast profit&#8217;s come with rapid losses, resulting in high account volatility, making you a liability, not an asset.<\/li>\n<li><strong>Prop firm&#8217;s measure your drawdown, not your profits!<\/strong><\/li>\n<li><strong>Instagram traders and Prop traders are not the same!<br \/>\n<\/strong>Proprietary traders are in for the long run, to make money every month, Instagram traders just want your money.<strong><br \/>\n<\/strong><br \/>\nIf you <strong>down every day<\/strong> by 5% and at the end of the month <strong>you have a 5% Profit, that simply makes you a terrible trader<\/strong>!<br \/>\nBecause you continuously generate significant risks to the company, and the reward is small, compared to the drawdown.Rule of thumb: <strong>the lesser you risk, the more capital you will get!<\/strong><\/li>\n<\/ul>\n<p><a name=\"managerisk\"><\/a><\/p>\n<h3>2. Risk Management<\/h3>\n<p>To effectively perform Risk management, you need to have two things in mind at all times.<\/p>\n<ol>\n<li>At what point\/price your trade is not going to work out.<br \/>\nlike breakouts, failures on price movement, horizontal levels .. whatever float&#8217;s your boat (eg. strategy)<\/li>\n<li>How much will you lose when 1.) happens.<\/li>\n<\/ol>\n<p>These are the most important values to be successful!<br \/>\nAgain: profits come by themselves. The job of the trader is to <strong>protect the Equity at all times<\/strong>!<br \/>\nif you know when\/where you are wrong, you need to take action (e.g. Stoploss, Close positions, Scaling out, Hedge, &#8230; )<br \/>\n<a name=\"notyourmoney\"><\/a><\/p>\n<h3>3. It&#8217;s not your money!<\/h3>\n<p>Prop Firms have a set of Rules to Guide Traders, <a title=\"\" href=\"https:\/\/www.enfoid.com\/prop\/fast-track\" target=\"_blank\" rel=\"noopener noreferrer\">EnFoid Fast-Track<\/a> has a &#8220;<em>5% Intraday &amp; 10% Total<\/em>&#8221; ruleset.<br \/>\nThis is to protect the Funds the Firm will provide to you, not to make your life difficult.<\/p>\n<p>Keep in mind this is NOT YOUR MONEY!, you have to respect it and the rules attached to it.<br \/>\n<strong>If you follow these simple guidelines, it will be IMPOSSIBLE to Fail.<\/strong><br \/>\n<a name=\"preventdisqualification\"><\/a><\/p>\n<h3>4. Prevent Disqualification<\/h3>\n<blockquote><p>These simple rules making sure you<strong>\u00a0NEVER fail<\/strong> a Challenge or a live trading account.<\/p><\/blockquote>\n<ul>\n<li><strong>Always risk a portion of your limit!<\/strong><br \/>\nThis allows you to have multiple losing positions in a row without getting disqualified.<br \/>\n<strong>Static risks like x% per trade are not practical and do not include already sustained losses or profits.<\/strong><br \/>\n<strong>Having a static risk is just what the so-called Guru&#8217;s teach to Retail traders.<\/strong><\/li>\n<\/ul>\n<p><em>example A<\/em>:<br \/>\nYour balance today is $50000, which means your max loss for today will be $2500 or $47500 Equity.<br \/>\n<span style=\"font-family: -apple-system, BlinkMacSystemFont, 'Segoe UI', Roboto, Oxygen-Sans, Ubuntu, Cantarell, 'Helvetica Neue', sans-serif;\">If you risk 10% of the allowed drawdown on each trade, you can have more than ten losing trades in a row without breaking any rule.<\/span><\/p>\n<p>Not enough? <strong>WRONG<\/strong>! <strong>10% of $2500 = $250 == 0.5% risk for this trade!<br \/>\n<\/strong>0.5% is already a substantial risk when Daytrading money that is not yours!<\/p>\n<p>Also, with just a 1:2 Risk\/Reward, 10 profitable trades would already lead to completing the Evaluation.<br \/>\nIf that is not fast enough for you, <em>better go to the Racetrack and bet on some horse with 200:1 or some random crypto coins!<\/em><\/p>\n<p><em>example B<\/em>:<br \/>\nYou trade with $50000 but you in a significant loss (let&#8217;s say 8%)<br \/>\nthat means your Max loss objective is in effect, limiting your Equity to $45000.<br \/>\nat an 8% loss, your Balance is at $46000 with $1000 until the max loss is hit.<\/p>\n<p>Risking 10% of the rest-Equity would mean your next trade will have a max risk of $100.<br \/>\nas you can see, it&#8217;s a bit less than half of what you can risk from example a.<\/p>\n<blockquote><p>even with a significant drawdown, the exposure is still moderate making it easy to recover.<\/p><\/blockquote>\n<p>If your account is <em>not in a loss<\/em> &amp; <em>no rule violation<\/em> recorded, you can <a title=\"\" href=\"https:\/\/www.enfoid.com\/prop\/faq-restart\" target=\"_blank\" rel=\"noopener noreferrer\">restart the test, unlimited times<\/a> free of charge!<br \/>\nthere is no need to overtrade EVER!<a name=\"tools\"><\/a><\/p>\n<h3>4. Tools<\/h3>\n<p>EnFoid provides a &#8220;Prop Indicator&#8221; for cTrader &amp; Metatrader 4 where you can see the rest equity your current account has.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-56764 size-full\" src=\"https:\/\/swingfish.nullx8.com\/swingfish\/blog\/2020\/07\/enfoid-prop-indicator-ctrader-mt4.png\" alt=\"\" width=\"719\" height=\"98\" \/><\/p>\n<p style=\"text-align: center;\">Divide the number you see by 10, and you know what you can risk in the next trade, <strong>yes it is that simple!<\/strong><\/p>\n<p>In combination with the Position size Calculator from <a title=\"\" href=\"https:\/\/www.earnforex.com\/metatrader-indicators\/Position-Size-Calculator\/\" target=\"_blank\" rel=\"noopener noreferrer\">earnforex.com<\/a> and the PSC-Script (MT4\/MT5 only)<br \/>\nyou can make trades easy, without engaging in too much math.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-56761 size-full\" src=\"https:\/\/swingfish.nullx8.com\/swingfish\/blog\/2020\/07\/never-fail-enfoid-prop-challenge.png\" alt=\"\" width=\"736\" height=\"639\" \/><\/p>\n<ul>\n<li>Download the EnFoid Prop Indicator [ <a title=\"\" href=\"https:\/\/www.enfoid.com\/prop\/faq-downloads\" target=\"_blank\" rel=\"noopener noreferrer\">MT4 | cTrader<\/a> ]<\/li>\n<li>Earnforex Position Size Calculator [ <a title=\"\" href=\"https:\/\/www.earnforex.com\/mt4-forex-indicators\/PositionSizeCalculator.zip\" target=\"_blank\" rel=\"noopener noreferrer\">MT4<\/a> | <a title=\"\" href=\"https:\/\/www.earnforex.com\/mt5-forex-indicators\/PositionSizeCalculator.zip\" target=\"_blank\" rel=\"noopener noreferrer\">MT5<\/a> ]<\/li>\n<li>Earnforex PSC-Script [ <a title=\"\" href=\"https:\/\/www.earnforex.com\/mt4-scripts\/PSC-Trader.zip\" target=\"_blank\" rel=\"noopener noreferrer\">MT4<\/a> | <a title=\"\" href=\"https:\/\/www.earnforex.com\/mt5-scripts\/PSC-Trader.zip\" target=\"_blank\" rel=\"noopener noreferrer\">MT5<\/a> ]<\/li>\n<\/ul>\n<p><a name=\"understanding\"><\/a><\/p>\n<h3>5. Understanding the Prop Business<\/h3>\n<ul>\n<li><strong>Prop Trading and Twitter\/Instagram Trading is not the same!<\/strong><\/li>\n<li>its much better to have a 2% monthly profit with a 0.2% drawdown, than having a 20% Profit with a 2% Drawdown!<br \/>\nif you do not understand the difference, you not cut out to trade someone else&#8217;s money!<\/li>\n<li>the smaller your Drawdowns, the larger your potential capital will be.<br \/>\nFor example, <strong>making a 10% return on 10k and making a 1% return on 100k is the same money<\/strong> for you,<br \/>\nbut it&#8217;s a huge difference in terms of risk for the company.<\/li>\n<li>a Prop firm will always prefer the trader with smaller Drawdowns over someone risking it all every day.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>A few simple &amp; easy steps to ensure never to fail a trading challenge or live trading. this works for [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":131,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5,7],"tags":[],"class_list":["post-130","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-company","category-swingfish"],"_links":{"self":[{"href":"https:\/\/www.enfoid.io\/doc\/wp-json\/wp\/v2\/posts\/130","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.enfoid.io\/doc\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.enfoid.io\/doc\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.enfoid.io\/doc\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.enfoid.io\/doc\/wp-json\/wp\/v2\/comments?post=130"}],"version-history":[{"count":2,"href":"https:\/\/www.enfoid.io\/doc\/wp-json\/wp\/v2\/posts\/130\/revisions"}],"predecessor-version":[{"id":133,"href":"https:\/\/www.enfoid.io\/doc\/wp-json\/wp\/v2\/posts\/130\/revisions\/133"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.enfoid.io\/doc\/wp-json\/wp\/v2\/media\/131"}],"wp:attachment":[{"href":"https:\/\/www.enfoid.io\/doc\/wp-json\/wp\/v2\/media?parent=130"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.enfoid.io\/doc\/wp-json\/wp\/v2\/categories?post=130"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.enfoid.io\/doc\/wp-json\/wp\/v2\/tags?post=130"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}