Congrats! You just made an affirmative decision and purchased a prop firm challenge which means you’re already one step closer to making wifi-money trading the open markets.
But wait – make sure you do it correctly otherwise you will lose the money you spent on the challenge + miss out on the potential profits.
This blog covers everything you need to know about the most common mistakes new prop traders make and if you haven’t purchased a prop firm challenge yet, then visit our homepage to find Propvator’s exclusive deals on prop firm challenges.
Mistake 1: Choosing the Wrong Prop Firm Challenge
If you choose a firm without considering how their rules align with your trading style, you risk setting yourself up for failure before you even start.
How to avoid it:
The best way to avoid this mistake is to first decide on the trading strategy you’ll be using for your prop account.
Once you know whether you’ll be scalping, day trading, or swing trading, look for a firm whose conditions fit your approach.
Scalpers, for example, need low spreads and fast execution, while swing traders should pay close attention to overnight fees.
To make the process easier, we’ve put together specific guides based on different trading styles:
Click here if you are a Scalper
Click here if you are a Day Trader
Click here if you are a Swing Trader
Mistake 2: Login Your Account and Smash the Buy Button!
Let’s not do that.
One of the fastest ways new prop traders set themselves up for failure is by entering the market without a clear, detailed trading plan.
Without a structured approach, you’re left reacting impulsively to every market move, leading to inconsistent and often bad results. A strong trading strategy acts as your compass, keeping you focused and disciplined amid volatility.
To avoid this mistake, start by building a comprehensive trading plan that outlines your entry and exit rules, risk management parameters, position sizing, and profit targets.
How to avoid it:
Before risking funded capital, test your strategy thoroughly on a demo account or through backtesting. This practice not only helps you rule out any flaws in your approach but also builds the confidence you’ll need to stick to your plan when the pressure is on.
Mistake 3: Changing Your Strategy Mid-Challenge
A common mistake among prop traders is changing their strategy once they get closer to getting funded. Many traders pass phase one with discipline, only to fail phase two because they start second-guessing themselves. As the pressure of getting funded builds, nerves take over and they abandon the approach that got them there in the first place.
How to avoid it:
This psychological barrier can be avoided by trusting your original plan and sticking to it consistently, no matter how close you are to the goal.
If your strategy was strong enough to pass the first phase, it’s strong enough to carry you through the second or even third step, provided you stay disciplined and avoid making emotional decisions.
We hear you & We are here for you.
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