How to be successful as a prop trader?

Today, we are going to go through some general tips and ideas on how to become more successful as a prop trader. Let’s jump into the general tips and ideas.

1. Develop a trading strategy and stick to it

A must-have is a trading strategy that you are required to stick to consistently. For the trading strategy, you should consider the pairs you will trade, the amount of risk you will use, and the amount of time you are going to spend in front of the charts. You should be disciplined and stick to the trading strategy, no matter the overall win or loss. Be sure to backtest and analyze your results to be able to improve your performance based on your previous results.

2. Set stop losses for all trades up to a certain percentage

Your trading strategy should also have a percentage of capital you can lose on any given day. For example, if you decide you can lose 1% on a daily basis, you set your stop losses on those limits and if you reach them, you stop trading for the day. While managing your account, you should also consider being consistent with your lot sizes, only increasing them based on your account growth. By taking all of that into consideration, you will be prepared for losing streaks as they will happen from time to time.

3. Do not revenge trade

It can be painful when losing out on a certain trade, however, stay disciplined and close the charts for the day. Do not engage in revenge trading, as this most likely resolves in even higher losses which can considerably damage your account capital. The best option after losing out on a trade is to stay away from the charts for the day, collect your thoughts and feeling, analyze what went wrong, and return the following day.

4. Prioritize quality over quantity

When trading you should always prioritize quality over quantity. This is a general rule since a consistent trading strategy with monthly returns is better than getting lucky a few times, and after that blowing your account. The more trades you place and the better your expected value is over a larger number of trades will increase your confidence and ability to successfully execute trades in difficult market conditions.

5. Test your trading strategies before going live with them

You should always test your trading strategy before going live with it and using them in the live market conditions. This is due to the fact that experience is one of the main components of forex trading, and taking the time to test something as important as your trading strategy is a significant factor to achieve success.

6. Do not force trades

Follow your trading strategy and analysis. Always wait for your entry points or simply do not enter the market. Forcing trades is a bad thing if the market goes in your direction as well as if it goes against you. This is because if it goes in your direction, your profits will be smaller, and if it goes against you it will significantly increase your losses. Knowing why you entered a specific trade is an important factor, you shouldn’t trade solely because you think you should or just to have a position open.

7. Find a proprietary trading firm that suits your trading strategy

With so many proprietary trading firms in the industry, there are many differences between their rules and guidelines. That being said, it can be a challenging task to find one that suits you the most based on your trading style. Each firm has its positive and negative features which you have to consider before joining. That being said I would suggest you check our article about the best proprietary trading firms in the industry.