Prop firm challenges

What a challenge is

A prop firm gives you a simulated account with a profit target and a set of loss limits. Reach the target without breaking a limit and they fund you, taking a share of what you make afterwards.

The trading is the easy part to understand. The rules are where people lose, and they are usually the part nobody practises.

Why the rules are harder than the target

A 10 percent target with a 10 percent loss limit sounds even. It is not. You have to reach the target without ever touching the limit, and an ordinary losing run at an ordinary size gets there first.

Loss limits also come in several shapes. Static ones never move. Trailing ones follow your balance up and can sit right underneath you after a good day. Reading which one you have is the single most useful thing you can do before starting.