Smart Prop Trader Shifts to New Brokers, cTrader (2024)

FAQs

What is the inactivity rule for smart prop traders? ›

Duration To Become A Smart Prop Trader | Smart Prop Trader Help Center. You have unlimited days during Phase 1 and during Phase 2. Additionally, there is a 30 day inactivity rule whereby traders must complete at least 1 trade within a 30 day period to avoid their account being breached due to inactivity.

We do not place any limit on the number of virtual trading accounts you can have in the Smart Prop Trader Challenge and Verification.

They're given harsh targets, limited time, no support, and huge leverage – a perfect storm! It's not surprising that 95% of traders fail their challenges!

That result should look catastrophic for anyone who hopes to join a prop firm. 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.

The Volcker Rule is intended to restrict high-risk, speculative trading activity by banks, such as proprietary trading or investing in or sponsoring hedge funds or private equity funds.

Virtual Maximum loss is static and calculated on initial Balance. The account can only be breached due to Virtual Maximum Loss if the account's balance or equity goes below (8%). Static Drawdown: When you open the account, your max drawdown is set at 8% of your starting balance.

In conclusion, the income of prop firm traders can vary greatly depending on several factors such as experience, performance, and the size of the firm. On average, a junior prop trader can expect to earn anywhere between $50,000 to $100,000 per year, while a senior trader can make upwards of $500,000 annually.

Prop trading Partners can take a much higher percentage of the profits for themselves. The much smaller capital base (tens of millions up to hundreds of millions), means that it's possible to earn extremely high annual returns (100%, 200%+, etc.).

Profits from trades are generally divided between the firm and the prop trader; however, the risk distribution is asymmetric. This means that in the event of a loss, the trader bears 100% of the losses, while they don't receive 100% of the profits.

Without a trading plan, retail traders are more likely to trade randomly, inconsistently, and irrationally. Another reason why retail traders lose money is that they do not have an asymmetrical risk-reward ratio.

Is it hard to pass a funded account? ›

Becoming a funded trader with a prop firm involves showcasing your trading skills and adherence to risk management during an evaluation process. While the difficulty can vary, it's achievable with consistency, dedication, and a solid trading approach.

Prop trading can be lucrative, with earnings tied to a profit-sharing ratio. Unlike traditional brokers relying on commissions, prop traders' income directly links to generated profits. Ratios vary, often ranging from 75/100 to 90/100, offering flexibility based on experience and strategy.

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.

There is estimated to be a 90% fail rate of traders that take the FTMO challenge. The reason behind this is due to traders chasing the profit target with a time restriction in place. A trader doesnt know when a winning streak might occur, or when they may take a string of drawdowns.

Becoming a funded trader in prop firms is not an easy task. Prop trading firms only want the best traders who can bring about the best returns under a very short loss leash. In other words, not only do you have to achieve profit, you have to make a profit consistently.

30-Day Inactivity Rule: To maintain the activity of your account, you must log-in and execute at least a single trade of a minimum of 0.01 lot within every 30-day period. This applies to all accounts. Please be aware that if an account does not place a trade for over 30 days, it will be deemed inactive.

Free Retries. As the Standard Challenge will now have no time limits, there will be no free retries for Phase 1 or Phase 2 Standard Challenge demo accounts as there is no longer a limit to your trading period.

An inactivity fee is a monthly charge that is levied on your account if there has been no trading activity for a period of 12 months.

Definition of Inactive Trading Accounts:

If a client does not trade at least once in any one of the segments/exchanges the client has signed up, for since a period of 12 months, such client accounts shall be categorized as inactive accounts.