- You cannot be rigid
- You don’t have to become the Wolf of Wall Street
- You need to have a high emotional quotient
1. You cannot be rigid
Many traders think that they can get through any kind of verification process if they already have a strategy. But you know what? That isn’t actually right.
Even if you already have a strategy, you cannot just expect to pass all rounds and instantly get funded, there are things that you’ll need to do if you actually want to get funded.
So if you see the rules of the verification process of any prop fund, you’ll see that it isn’t a cakewalk. They have strict rules in place and if you violate any of them, you lose your chance.
That’s why you cannot be rigid and you’ll have to be flexible. What I mean by this is that you need to adapt to these rules, make changes, have a plan, and then you have a good shot.
Say that you have a strategy in which you risk 2% a trade and you have applied to a prop fund that has a max drawdown limit of 10% and max daily loss of 5%.
Now, with the strategy you have, you can only take a maximum of 3 back to back losses in a day before you get shut out, or a losing streak of 5 trades and you’re done too.
You cannot go on with this plan of risking 2% in each trade if you are going through the verification rounds for getting funded.
This is where you stop being rigid, adapt to the rules, and devise a plan to take you smoothly through the entire process.
What you can do is you can half your risk per trade and start risking 1%. This gives you room for 5 back to back losing trades in a single day and 10 back to back losing trades overall.
Even if a black swan event happens and your strategy ends up losing these many trades and you see a drawdown, you will still be in the game and not get disqualified.
So I told you right that I have mentored traders that got funded, one person actually lost his funded account because he was rigid and didn’t adapt properly to the rules, and it didn’t go down well for him.
All in all, you need to realize that if you want to get funded by a prop fund, then you need to follow the rules that they set and mold yourself according to them.
As they say, stay in the good books and only good will happen with you, and it is very applicable here.
2. You don’t have to become the Wolf of Wall Street
I’m sure you would have watched the movie The Wolf of Wall Street and I’m sure that you loved the life that the protagonist lived. You might have already started dreaming of living that life one day and would want to emulate his quick life turnaround.
I’ve seen many traders come into trading with this expectation and they look at these funded accounts as their key to that type of lifestyle.
This unrealistic expectation leads them to take these funded accounts for granted and they start risking big to earn big, and eventually, they violate the risk limits, and they lose their account.
By doing this, these traders are just making the prop funds richer as they get to collect the registration without giving out funded accounts as the traders fail to pass the verification rounds due to their stupidity.
That’s why I want you to stop trying to become the Wolf of Wall Street or the wolf of any other street.
You need to drop these unrealistic expectations that you have for these funded accounts and you need to get your priorities in the right place right away.
In my previous blog post on becoming funded traders, I’ve talked about insider information about these prop funds. So what I said was that these funds care more about risk management and capital protection than anything else.
Of course, making money and generating returns is important but what’s even more important is to generate those returns by having risk in control.
Every now and then I’ll come across articles and videos that say that these prop funds are scams just because traders can’t pass the verification rounds due to the strict rules.
It just frustrates me because it’s not that people don’t pass these rounds, so many people have, all that they did was that they played it smart and focused more on controlling risk rather than solely aiming for returns.
3. You need to have a high emotional quotient
This is the third and the most important tip that I wanted to give to you, irrespective of whether you are trying to become a funded trader or are just trading on your own.
Now, I have said it time and again, if you don’t know how to manage your emotions as a trader, then you are never going to do well in this business, period.
If you are trying to get funded by a prop fund, then you’ll need a high emotional quotient as there are lots of factors that can influence you.
The first and the most factor that can affect your psychology and stuff is that the capital isn’t yours, and you’ll start thinking that it won’t matter if you risked more and lost more as it’s not your money that you’re losing.
But that’s where you’d go wrong and will eventually go bust and get disqualified.
As I said in the previous points, many traders see funded accounts as their means to get rich quick and what they start doing is that they risk more to win more.
This is where your psychology and mindset as a trader will be tested and you’ll need to show grit and discipline. This is what sets successful funded traders apart from the ones that failed.
Apart from this, you’ll need to have the basic emotional quotient as any other trader of not allowing emotions to influence decisions and having the right psychology. This is all basic yet very much ignored by traders and it’s just unfortunate.
These are my 3 tips for you and I am confident that if you follow and implement these, your road to becoming a funded trader will be a smooth one and you will achieve your goal.
These tips aren’t something that I’m randomly telling you about, I have observed these from my students and I actually noticed that these are little yet really impactful things.
Do let me know if you ever sign up for a funded account and also let me know how it turns out for you. Also, let me know if these tips make any difference.