How to Pass a Prop Firm Challenge: 13 Tips [2024 Updated] (2024)

Last Updated on January 1, 2024 by Richard Gibson

Successfully passing a prop firm challenge can change your trading career. Prepare to unlock your full potential with this must-read guide.

I am Richard, a senior trade analyst at MyForexReport. In the past few years, I have passed many prop firm challenges and some have failed. Based on my prop trading journey and strategy, I have written this article on How to Pass the Prop Firm Challenge. It’s time to fulfill your prop trading dreams!

Top Tips To Pass a Prop Firm Challenge

To pass a prop firm challenge and gain access as a trader, there are some significant key tips to remember.

1. Choose Trusted and Legit Prop Trading Firms:

The first thing you should do is do thorough Firm research. Go through their online reviews and ratings, and learn about their history and credentials. A legitimate firm will be transparent about its operations and fees. They will also provide resources to help you succeed, not just take your money. Currently, prop firms like FTMO, 5ers, E8, TFT, and RebelsFunding are doing a good job.

2. Practice With Free Trial Accounts

Many prop firms offer free demo accounts to practice with virtual funds. Before purchasing a package, use these to familiarize yourself with their platforms and rules. You will gain experience with stop losses, profit targets, and position sizing.

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3. Getting Started With a Small Challenge:

I recommend signing up for the cheapest package to get started. The ‘Intro’ or ‘Beginner’ level packages are great for this purpose. Putting less money at risk allows you to learn how things work. Once you gain confidence and skills, you can purchase a large challenge account.

4. Follow the Prop Firm Rules:

Read all the firm’s rules and policies carefully before trading. Trading hours, eligible stocks, position limits, and fees are the most important aspects to know before trading. Payouts may be declined or your account terminated if you do not follow their rules & guidelines.

5. Always Use Proper Risk Management:

No matter the challenge, apply risk management principles. To pass the prop firm challenge, risk management is essential. Prop firms will constantly evaluate the risk you are taking and the profit you are gaining against them. Even with small risks, you can make a consistent profit margin. With risk management, I make 13% on each entry. Sl will always hit any strategy, but risk management will always protect your money from a large downturn.

6. Start With a Solid Trading Plan:

Prop trading requires discipline, so you need a solid trading plan. Set your entry and exit rules, risk parameters, and daily profit targets before the challenge begins. For example, you may choose to risk no more than 1% of your account per trade, take profits at 3:1, and aim for 1-2% daily account growth.

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7. Fundamental Analysis:

Research the instruments you will trade to determine the optimal entry and exit points. Analyze financial statements, analyst reports, and news headlines. Look for instruments poised for price increases due to upcoming contracts or improved financials. Keep updated with major news events and economic releases that may impact the FX market. Use an economic calendar to keep track of such events.

8. Support and Resistance

Identify key support and resistance levels, especially on daily and hourly charts. These are price points where a stock is likely to stall or reverse. You should use trendlines, Fibonacci retracements, and pivot points to develop your analysis further. Place long trade entry orders just above resistance and short trade entry orders just below support.

9. Always Use Stop Losses and Profit Targets:

Limit your losses by placing a stop loss order with every trade you make to manage risk. It is also important to have a profit target to avoid being greedy and taking too much profit. Instead of overleveraging or overtrading, I set daily goals and exit the market. Maintain a balanced approach to avoid significant drawdowns. Avoid risking too much capital on a single trade. Also, I do not overtake by taking too many positions at once, because I know this will reduce my risk management ability. So, take high-probability combinations based on your plan. When you reach your daily profit target, you should exit the market.

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10. Don’t Trade During the News:

Avoid trading during major news releases to succeed in a prop firm challenge. Uncertainty and inconsistency related to economic data and international affairs might negatively impact your trading strategy.

11. Monitor the Economic Calendar

These are a few of the most market-moving indicators:

  • U.S. Non-Farm Payrolls (NFP)
  • The Federal Reserve’s interest rate decisions and policy statements
  • Quarterly GDP reports measuring economic growth
  • Announcements regarding global trade deals or tariffs

It is best to avoid trading 30 minutes before and after these news events. Market reactions are often over the top and price action is unstable at this time. It would help if you waited some time to see how the updated information impacts your trading perspective once the dust has settled and the risk has decreased. With MyForexReport’s economic calendar, you can keep track of the market.

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12. Have a Game Plan For Different Scenarios

For example, if the Fed signals stronger monetary policy by increasing interest rates, you may want to look for short-term positive setups in the US dollar or negative setups in gold and Treasuries. Alternatively, if a trade agreement is announced, sectors such as technology, industrials, and materials may benefit. Prepare for the worst-case scenario as well. Planning ahead of time will allow you to react fast while keeping emotions in check.

13. Focus on the Technicals

The market’s reaction often depends on how the news compares to expectations, so previous forecasts and economic surveys can provide context. Ultimately, the charts will tell you where the market is going. You will be able to make high-probability trading selections during your prop firm challenge if you don’t avoid important news events and prepare for alternatives. Stay alert and wait for volatility to calm before deciding how to capitalize on new knowledge.

Final Thoughts

To pass a Prop firm challenge you will need knowledge as well as strategic planning. By following my 13 master tips, you can increase your chances of passing. Don’t get disheartened if you don’t pass a few challenges. It’s bound to happen. The process is pretty intense.
So, always stay disciplined, maintain a positive mindset, and continuously improve your trading abilities. With perseverance and dedication, you can become a successful prop trader.

How to Pass a Prop Firm Challenge FAQs

These are the top queries that people are concerned about how to pass the prop firm challenge.

Is it difficult to pass any prop firm challenge?

Passing a Prop Firm Challenge can be quite nerve-wracking. Through these trials, firms determine your skills, knowledge, and ability to perform under pressure. Some find it hard, some not so much. Ultimately, it comes down to your experience, preparation, and ability to adapt to different trading strategies and market conditions.

How long does passing the prop firm challenge take?

It varies from firm to firm. Each Prop firm has some specific requirements, trading days, and the individual’s skill level and dedication. I would advise you to contact the firm that you want to enroll in for more info.

What resources should I have to pass the prop challenge?

From my experience, I can say that Educational materials on trading strategies are very important for any beginner. You can also seek the guidance or mentorship of an experienced trader. In addition, prop traders communities on Telegram, Facebook, and Discord publish daily tips. You can go through them as well.

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Richard Gibson

Richard Gibson is a trade analyst and writer for MyForexReport. He has over 10 years of experience in investing and trading equities, options and bonds. He trades options, stocks, and ETFs regularly following a value-driven investment philosophy. He’s a graduate of the University of MacEwan University, and holds a graduate certificate in financial planning from the University of Calgary.

Forum Profiles: Babypips

How to Pass a Prop Firm Challenge: 13 Tips [2024 Updated] (2024)


How to pass prop firm challenge fast? ›

Tips for Passing a Prop Firm Trading Challenge
  1. Understand the Rules of Engagement: ...
  2. Master Your Trading Strategy: ...
  3. Risk Management is Non-Negotiable: ...
  4. Leverage Your Analytical Skills: ...
  5. Stay Disciplined and Patient: ...
  6. Continuous Learning is the Key: ...
  7. Embrace Feedback and Adapt: ...
  8. Simulate Real Trading Conditions:
Feb 5, 2024

How to pass a funded challenge? ›

Staying Focused and Disciplined

Avoid distractions and stay focused on your trading strategies. Don't be afraid to take a break if you need it, but always come back with a clear head and renewed energy. Remember that consistency is key, and you can only achieve your goals by staying focused and disciplined.

What happens when you pass a prop firm challenge? ›

Successfully passing a Prop Firm Challenge grants traders a key advantage: access to substantial trading capital.

Which prop firm is the best? ›

The most popular prop trading firms and funded programmes
  • Axi Select.
  • FTMO.
  • The Forex Funder.
  • E8 Markets.
  • True Forex Funds.
  • The 5%ers.
  • Funded Next.

Is it difficult to pass the prop firm challenge? ›

This is a popular way for traders to prove their skills and potentially secure funding from a prop firm. However, passing this challenge can be quite daunting and requires a lot of hard work and dedication.

How many people fail prop firm challenges? ›

Around 10% pass

According to FTMO statistics, only about 10% of traders are able to pass the funded account challenge at any account level. This means approximately 90% of aspiring funded traders fail the evaluation and are unable to gain access to the firm's capital.

How to win a prop firm challenge? ›

Maintain proper risk management: Prop firms place significant emphasis on risk management. Showcasing your ability to effectively manage risk is crucial for passing the challenge. Implement appropriate risk management techniques such as setting stop-loss orders, managing position sizes, and diversifying your trades.

How fast can you pass a prop firm challenge? ›

In conclusion, it can take around 4-5 months to pass a prop firm trading challenge and become a funded trader. However, it can take much longer than that to become a profitable trader beforehand – which is a necessity.

What is the success rate of prop firm evaluation? ›

It is estimated that only 4% of Forex traders succeed with prop firm challenges, and only 1% of traders can generate profits consistently without violating any rules.

Why do people fail prop firms? ›

Lack of proper risk discipline

Risk discipline is crucial regardless of your style of trading. But it is especially important in prop trading as prop firms' strict rules make it too easy to blow your funded account. While some prop firms demand their traders to use mandatory stop-losses, not all do.

How to pass 5k prop firm challenge? ›

To pass the FTP $5,000 account evaluation you need to make a minimum profit of $250 within 14 days while not exceeding a 20% max loss limit if trading forex pairs or 10% loss limit if trading other markets. If successful, traders keep 85% of all subsequent profits made.

Which prop firm is the easiest to pass? ›

Overview: OneUp Trader is a reputable firm in the prop trading arena, offering traders an opportunity to trade a funded account without risking personal capital. They are known for their straightforward evaluation process and supportive trading community.

What is the best prop firm in 2024? ›

Quick Look: Best Prop Trading Firms
  • Best for Beginner Futures Traders: Apex Trader Funding.
  • Best for Experienced Traders: FXIFY.
  • Best for Stock Traders: Trade the Pool.
  • Best for Experienced and Beginner Forex, Indices and Metal Traders: The 5ers.
  • Best for All Futures Traders: BluSky.

Why is FTMO banned in the US? ›

FTMO have now restricted access to all new US-based traders as of January 2024. This appears to be related to regulatory issues and may have something to do with the recent My Forex Funds case.

How long does it take to pass a prop firm challenge? ›

For most funded trading accounts, it takes around four to five months to pass the screening process or prop firm trading challenge, before funding will be allocated to a trader. However, some prop firm challenges can be passed in a much shorter time, in as little as two days, though this involves using increased risk.

What percentage of traders pass the prop firm challenge? ›

The article from Lux Trading Firm provides slightly different results. According to it, 4% of traders, on average, pass prop firm challenges. But only 1% of traders kept their funded accounts for a reasonable amount of time.


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