How to Pass a Prop Firm Challenge
Follow a practical, conservative process to meet the target without violating rules. Includes daily risk templates, trade limits and review routines.
Step-by-step plan
- Validate your setup (backtest + forward test) before buying a challenge.
- Create a written plan: daily risk, risk per trade, max trades/day, stop time.
- Trade only A+ setups; log every trade with context and screenshots.
- As you get close to the target, reduce risk and protect equity.
- After passing, maintain the same risk discipline on the funded account.
Daily risk templates
- Template A: 0.75%/day max, 3 trades × 0.25% risk.
- Template B: 0.5%/day max, 2 trades × 0.25% risk (slow-and-steady).
- After a red day, cut next‑day max risk by 30–50%.
- After a strong green day, cap next day at 0.5% to protect gains.
Common pitfalls
- Trading during restricted news or outside allowed hours.
- Oversizing positions and ignoring the daily loss cap.
- Revenge trading after a loss; no stop time.
- No journal → repeating the same mistakes.
Checklist
- News checked, levels marked, risk set.
- Max trades/day and stop time defined.
- Only your A+ setups; no impulsive entries.
- End-of-day review and journal update.
Deep dive: 3-phase execution plan
- Phase 1 (Days 1–5): Discovery & data collection — trade smallest risk (0.25%/trade, 0.5%/day). Skip uncertain sessions, prioritize clean A+ setups, and build confidence and context notes.
- Phase 2 (Days 6–12): Consistency & incremental push — maintain 0.25–0.3% risk, cap at 2–3 trades/day. If equity dips −1.5% from peak, auto-scale risk down for 2 sessions.
- Phase 3 (Finish line): Protection mode — halve risk once within 1–2% of the target; prefer partial profits and avoid new positions near restricted news windows.
Expectancy and position sizing
Expectancy (per trade) ≈ WinRate × AvgWin − LossRate × AvgLoss. A plan with 45% win rate and 1:2 R:R still yields positive expectancy when risk is capped and losses are cut quickly.
- Risk per trade: 0.25–0.5% of account; risk per day: 0.5–1.0%.
- Sizing (generic): Position = Risk$ / SL$ per unit (pip/tick/point).
- As volatility rises, reduce size or widen SL while keeping % risk constant.
Daily & weekly routines
Daily
- Pre-market: news check, mark levels, define bias, set alerts.
- During: trade 2–3 setups max; bracket orders; stop-time enforced.
- Post: screenshots, journal, tag mistakes and good decisions.
Weekly
- Review metrics: win rate, average R, MAE/MFE, rule breaches.
- Update playbook: keep, tweak, or park setups.
- Plan next week’s risk and focus sessions.
FAQ
Should I trade during high-impact news?
If the firm restricts it, no. Even when allowed, spreads/slippage can cause breaches. Reduce or avoid exposure around releases.
How many trades per day?
2–3 quality attempts are enough. More trades often increase variance and rule-breach risk.
When to step down risk?
After a red day, after 2 back-to-back losses, or within 1–2% of the target. The goal is account survival, not speed.
Next steps
Choose a firm that fits your schedule and style, then execute this plan consistently.