how to win the prop firm game: first off, prop firms are not “funding”, they’re a business model that sells you leverage your job is to extract payouts without giving them reasons to deny you in live trading, you optimize for long-term account growth, when trading prop firms, you optimize for ROI one of the main mistakes traders make on props is changing strategies between phases they try to “gamble” the challenge phase and once they pass an evaluation, they want to go “big” that’s how you fail always use one strategy across all phases same setup selection, same execution rules, same risk logic, same behavior if you cannot repeat the same process, you are not consistent when it comes to FX prop trading, short-term/swing trading is by far the most successful approach based on data but because it forces patience, and patience prevents rushing challenges most of you fail challenges because you try to speedrun them rushing creates overtrading, overtrading creates rule breaks, rule breaks create denied payouts and/or restrictions your goal is not to pass fast, but efficiently a few precise trades with proper risk allocation, like a surgeon it’s that simple smaller consistent payouts > one huge payout don’t trade in a way that makes them want to investigate you props look for people who behave like gamblers they are unregulated, if they don’t want to pay, there’s nothing you can do about it that being said, carefully decide which firms you want to work with if you buy trash, don’t expect great service either what to look for when picking a CFD prop firm: - avoid instant funded accounts, they exist because it’s easy money for the prop - go for a simple two-step with reasonable rules and time flexibility - ability to hold trades without stupid restrictions - news trading and weekend holding allowed - clear drawdown logic and payout policy do not rely on props as your only income early if you need the payout to pay rent, you are cooked rushing leads to forcing trades, forcing trades lead to rule breaks, and rule breaks lead to blown accounts prop firms are nothing but like a business cashflow stream you want repeatable monthly extraction, not one huge payout most people try to pull 10 percent out of a small funded account on a monthly basis that’s not sustainable without blowing up your accounts consistently instead, scale funding so you can target small percentages 1% on 100k = 1k 1% on 1m = 10k getting 1 percent on a big allocation is easier than 10 percent on a small allocation if you blow accounts, it’s either tilt, or you simply don’t have an edge if you are not consistent yet, redefine the goal of challenges your goal is not to pass, but to collect data you are looking for one thing only: the bottleneck that keeps you from repeating clean execution once you find it, you fix it not mainly your system, but your behavior markets rotate through really good, average, and slow months so does your system’s performance forcing a fixed return goal in a slow month is how you destroy accounts this is normal some months make your year some months are break-even some months are slow and choppy the correct response is not “trade more”, it’s “trade less and protect the account” arbitrary monthly goals are stupid in below-average months they force overtrading in above-average months they cap upside because you stop early both outcomes reduce long-term expectancy most traders get a payout, then spend it instead reinvest into scaling more accounts and increasing your allocation invest into appreciating assets such as equities, real estate, or another business remember, the goal is to become independent from prop firms you want to be able to pay your bills from your “passive” income if you want to get rich, it’s going to be boring boring execution, patience, and slow compounding stay boring and become rich, cheers.

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TraderTom

BuyTheFear retweeted

TraderTom

@TomHougaard

Jan 2

NEW YEAR MESSAGE A new year beckons. Ahead of us lie 365 days. Those are our days. They are up to us to design as we see fit. Yes, you have to go to work, but ultimately that is a trade-off decision we make — to have a house, a car, and food on the table. You may say, “I have no choice.” That is not true. We all have a choice. We may not like the consequences of the easy path, but we do have the choice. This is our life. This is our time, and this thing called life — this project — is the greatest project you will ever work on. I have given much thought to what drives me. As a trader, I can stand accused of being “all about money”. That is true, but only to a certain extent. For you to understand my argument, I will demonstrate by way of a hypothetical example. I have a choice of making $100 by taking risk, pushing myself into uncomfortable terrain — mentally speaking — dealing with emotions of fear, discomfort, and uncertainty about what comes next. I will have to be the best version of myself to make that $100. In fact, I have to be better than the best version of myself, because I have to break the mould and expand my limitations. Or I can make $200 doing something that doesn’t challenge me, doesn’t stretch me, doesn’t push my limits, but merely goes over the same old, worn skill set. I have this choice to make every day. I believe you do too. I know which option I will pick every time. One represents growth. The other represents safety and comfort. One provides an opportunity for abundance of unseen and unspoken proportions. The other represents no real, meaningful growth — neither spiritually, nor financially, nor emotionally. Real growth comes from seeking the unknown. Real growth doesn’t make noise. It is the quiet focus, the daily effort that no one sees, that no one comments on (except the naysayers who are afraid you will leave them behind), that no one applauds you for doing. It is your journey. It is my journey. It is done early in the morning, when everyone is asleep. It is done late at night, when the world is watching TV. We sit in silence — planning, building a vision of our future, refining our plans, plotting the next day, the next week, the next month, and the next year. And here comes the most important part of this message. We don’t do it for the gold watch and the pat on the back. We don’t do it to impress the world. We do it to impress ourselves — to command self-appreciation, to feel self-respect, to value self-love, to walk and think with self-confidence. This is our journey. It is not your wife’s journey. It is not your husband’s journey. It is not our children’s journey. This is our journey. You will never truly know the joy and value of critical self-appraisal until it comes from deep within — that voice saying, “I gave it my all, and I am 100% responsible for the outcome.” That is what trading can give us. You are disciplined when no one is watching. You are persistent when everyone falters on their New Year’s resolutions. You are resilient when life throws you a curveball. You keep your own counsel while everyone around you is quick to cast judgement on your decisions. This is your journey. This is my journey. The greatest feeling you will ever experience is looking yourself in the mirror, smiling, knowing that you conquered your fears — all your perceptions of shortcomings and inadequacies, all the self-imposed limitations you created by modelling yourself around the expectations of your family, friends, and society, all the mental constraints you inherited from your upbringing, from your surroundings, from your parents, siblings, friends, and enemies. You look at that reflection, knowing you have given the universe irrefutable evidence of the fact that you are who you say you are. That is when you will have peace within. It is knowing that you have conquered the inner world — and that you continue to do so. You do what you say you will do. That is success. That is peace. That is the ultimate quest in life. Happy New Year. Tom Hougaard

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