Why do 95% of all Traders fail their Prop Firm Challenge?
Global statistic shows that more than 95% Traders who engage in to Prop Firms do not pass their challenge. This is because they break at least one or more of the Prop Firm rules resulting to hard breach and consequently losing both the account and their subscription fee.
- Not having an edge in the market (Poor trading strategy).
- Poor risk management.
- Wrong trading psychology (Most trader wants to get rich quick)
- Over Trading.
- The fear of loosing.
- Improper risk-reward ratio
- Exercising prohibited trading Prop Firm practices.
Not having an edge in the markets (Poor trading strategy).
What is a Market Edge?
A market edge is a trading technique which is acquired through experience and observation which help the Trader of increasing his chances of achieving profitability over time. It can also be seen as a technique, observation, or approach that creates a cash advantage over other market players. Many systems appear successful because they win often yet fail when losses are larger than gains. Trading with an edge does not imply consistent monthly profits or uninterrupted performance. Trading with an edge accepts uncertainty and works within probability rather than attempting to eliminate risk. An edge is also not defined by a high win rate alone, nor is it created by relying on a single indicator.
In professional trading, expectancy measures the average outcome of repeated decisions and defines the real edge in trading. Without positive expectancy, no trading edge can survive costs, volatility, or long-term execution. Expectancy is driven by three connected factors: win rate, payoff size, and risk per trade.
That being said, more than 95% of all Traders fail their Prop Firm Challenge because they don’t have the edge in trading the markets. Most Traders of today are just cajoled by the large capital being provided by the Prop firms. They jump in to start buying challenges without having the trading experience. The edge to win and outsmart market makers can only be achieved by market experience which can only be acquired by so many years of trading screen time. 95% of all Traders fail their Prop Firm Challenge because they do not have a good trading strategy, or skill to keep loses smaller while trading with Prop Firms who have a well-defined risk structure. Trading the edge works when the value of winning trades exceeds the impact of losing trades after all costs.
How to find an edge in the market
It usually takes so many years of active trading in order to have an edge in the market. Traders who have been failing their Prop Firm Challenges can follow some of these guidelines bellow in finding and defining their edge.
- Educate yourself in the ways of the market
- Develop your strategy
- Test your strategy
- Refine your strategy
- Manage your risk
- Understand trading psychology
- Keep a trading journal
- Calculate your trading edge
- Be patient, and always repeat your winning strategy
Generally, it usually takes so many years of losing in the market before traders will finally understand what the market entails to find their edge. If 95% of all traders who fail Prop Firm Challenges apply in their trading high degree of discipline, Patience and consistency, they will take a shorter time in finding their edge in the markets and pass their prop firm challenges without stress. Visit our homepage to learn more about our Services. You can also learn more about the nature of Prop Firm challenges.
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