MAVEN TRADING OPERATES A SIMULATED TRADING ENVIRONMENT THAT REPLICATES CERTAIN REGULATED FINANCIAL MARKETS BUT DOES NOT INVOLVE TRANSACTIONS IN OR SERVICES CONCERNING REGULATED FINANCIAL INSTRUMENTS.
MAVEN TRADING DOES NOT SUPPLY ANY REGULATED FINANCIAL SERVICES. MAVEN TRADING IS NOT REGULATED OR AUTHORIZED BY ANY FINANCIAL SERVICES REGULATOR IN ANY JURISDICTION.
As a trader, you probably can’t wait to get started on making trades on the market. However, passing a prop firm challenge is the first step to getting access to a funded trading account. Here are some tips on how to pass a prop firm challenge, mistakes to avoid, and strategies you can use.
How to Pass a Prop Firm Challenge
1. Control Your Risk Management
It’s easy to get carried away at the moment when you’re making a trade.
Remember, you don’t want to rush a challenge to make a quick profit. When you start a trade, it’s important to be careful with how much you risk. It’s recommended to only put 1-2% of your account value on the line. This way, you can protect your account value and minimize potential losses.
2. Control Your Emotions
Market shifts and fluctuations can mirror the emotional rollercoaster some experience when making trades. Tensions can run high, and sometimes, you might just have a bad day. This is the point where you take a step back and get your mind off the trade. You can revisit it when you are calm.
There is absolutely no need to try and make back what you may have lost if things don’t go your way. Don’t become a gambler when you’re trading—let things sit for a while and take a break.
3. Stick to What You Know
Learning and growing are just part of being a trader. But, if what you know works for you, then you don’t need to change your strategy.
You know what people say: if it isn’t broken, don’t fix it. Savvy traders will often share quick “hacks” online, and it’s easy to get carried away by new strategies. Sticking to your strengths and what you do know can be best for you.
You don’t need to reinvent the wheel when it comes to trading. Sometimes, the simplest methods do the trick. There’s no need to get frustrated over complicated trading strategies, especially if what you know works for you. Stick to your trading strategy.
Mistakes to Avoid to Pass a Prop Firm Challenge
You’re only human; you can make mistakes, but these are avoidable if you want to pass a prop firm challenge.
1. Trading During Red News Events
Red news events are bombshell events that can really shake up a market. This will lead to significant changes in prices, and that can only mean one thing—volatility. A volatile market is an unpredictable one, which will usually lead to losses. A stable market is a surefire way to get consistent trades, so trading during red news events can be counterproductive.
2. Making Irrational Decisions
Working well under pressure isn’t easy. It takes time to learn how to control your emotions and be objective.
Even the most level-headed person can get frustrated and make bad decisions. Step away and cool down before you make a trade that you might reconsider or regret. The only thing worse than making a single bad decision is making a series of bad decisions.
3. Getting Risky
“Go big or go home” isn’t the approach you want to take to pass a prop firm challenge. Remember, your goal is to get a prop firm challenge pass. While sometimes a big risk can bring big rewards, this is not highly probable. Play it safe, and you’ll have an easier time with passing prop firm challenges.
What Trading Strategies Do Prop Firms Use?
There are tons of strategies that you can use to pass a prop firm challenge, but these two are extremely common:
Trade Based on Resistance and Support Levels
Making trades based on resistance and support levels is a simple strategy, and there’s a good reason for that—it works.
Resistance is the high point for an asset that historically has difficulty exceeding. On the other hand, support is the opposite. This is the point where it has a hard time going below the market.
This strategy is all about simply identifying the resistance and support levels. During resistance, the interest to sell will exceed the buying pressure. For support, buying interest exceeds selling pressure. When you anticipate a support level, that’s when you buy.
You should sell when an asset reaches resistance.
Using this approach is great, especially if you’re a beginner, because it helps with risk management. This strategy can help you pass your challenge.
Trade Based on a RSI-led Indicator
The RSI, aka Relative Strength Index, is one simple way that helps measure how fast and how much prices are changing. It’s like a speedometer for price movements! It will help you to figure out if a security is being bought or sold too much. This indicator ranges from 0-100 over a period of time.
So, if an RSI is above 70, a security may be overbought. Simply put, it’s a good time for you to sell. Meanwhile, if you see an RSI below 30, then your security might be oversold. It would be a good time to buy.
An RSI indicator can also be used with other indicators to help you keep track of a security on the market.
Choosing the Right Prop Firm Challenges to Pass
There’s one more thing you need to consider when you want to pass a prop challenge: picking the right firm. That’s why we have no time limits.
Making a successful trade is stressful enough—that’s why we don’t put a time limit on challenges. You could take all the time you need to get things right. Who needs the added pressure of time limits when you want to pass a prop firm challenge?
That’s one less thing to focus on so you can keep your head in the game. It only takes about one month to pass the 1-Step or 2-Step challenge on average.
Why Choose Us
Maven Trading is built by traders who know the hardships of breaking into the market. You want to use a prop firm that makes trading more convenient for you.
- Buy Back Feature: With just a small fee, you can easily get back into your account if you lose it. The best part? You don’t have to repeat any phases or step challenges. It’s a hassle-free way to regain access and continue progressing towards your goals.
- Account Reset Feature: Account resets are a standout feature with us. You can recoup your losses on a funded account by paying just 50% of the amount you’ve lost.
Take the plunge with one of our challenges to start your trading journey.
PLEASE SEE THE MAVEN TRADING WEBSITE AND OUR CUSTOMER TERMS AND CONDITIONS FOR MORE DETAIL.
Can You Make a Living Day Trading?
You thrive on the excitement of the financial markets. You’re keen to build your trading skills. And you want to trade full-time. Do these statements sound like you? Then you’re probably wondering if day trading can be a lucrative career path. So, can day trading be profitable? Absolutely. Below, we explain how day trading works, […]Read Article
How to Be a Profitable Day Trader
If you’re wondering, “How do I become a profitable day trader?” you’re not alone. Although day trading can be highly profitable, it’s tricky to know where to start. Below, we explain how day trading works and how profitable day trading is. What Is Day Trading? First, let’s make sure you’re clear on what day trading […]Read Article
How Do Prop Firms Make Money?
Prop firms can help talented traders access new markets and develop their trading skills. That said, we know the prop firm business model itself can be confusing. How do prop firms work, and where do they get income from? If you have questions like these, here’s a look at how proprietary trading firms work and […]Read Article