The world of fx trading poses many challenges for traders. And to make matters worse, prop firm challenges are not easy to pass.
The evaluation is exhausting and often continues for weeks. The period compels many traders to lose their patience and break risk management rules. And the result? They end up losing their funded account.
At Next Step Funded, we help skilled traders succeed in their trading career by making fair and reasonable evaluation periods and Max Daily Loss. From sharing valuable trading information at our Discord to sharing winning strategies, we guide on retaining funded accounts against all odds.
Funded Account Trading Psychology
A successful trading career not only builds on top of the understanding of market analysis and strategies that a trader has. The trader’s psychology is equally important because it influences the decision-making process of the trader in different situations.
The good news is that funded traders can overcome the psychological challenges. Next Step Funded shares practical tips for funded traders to build a strong trading psychology:
Fear and greed
Fear often results in missed trading opportunities, while greed pushes impulsive and irrational trading decisions. Both can cause more damage than any good. Put in place a trading plan and establish objectivity and discipline in making entry/exit from trades.
Emotional Attachment to Trades
Traders are humans too. Traders often hold the losing positions longer than expected. All in the hope that things will turn in their favor. Traders should set predefined stop-loss levels that eliminate the unhealthy emotional aspects out of trading decisions.
Impatience
Many traders enter or exit trades without any rational explanation. It is common but nothing short of a suicidal move in the fx trading market. These impulse trading decisions can cost funded traders their account. Traders need to focus on long-term success and educate themselves on leveraging the most out of fx firm trading strategies.
Overtrading
Overtrading is common among funded traders because they have sufficient funds to invest. Traders should set boundaries such as daily or weekly trading limits. It reduces the risk of reckless fx trading and losing the funded account.
Confirmation Bias
Confirmation bias makes traders overlook information that contradicts their beliefs. Traders need to acknowledge their confirmation bias and pursue different viewpoints on fx trading. Using technical and fundamental analysis techniques can also help change the preconceived notions.
Discipline and Consistency
There’s no replacement to trading discipline and consistency. Stick to a trading plan and stay on the track to attaining funded trading success.
Risk Management Strategies For Retaining Funded Account
As Warren Buffet said: “The first rule of any game is to protect your money, and the second one is to never forget the first rule.”
Whether you are a beginner or a professional trader, effective risk management is a crucial aspect of fx and futures trading. Having a good risk management plan becomes crucial if you are trading with a funded account, because the funds are provided by the proprietary firm.
At Next Step Funded, we believe a disciplined risk management approach is the cornerstone of a successful fx trading career. Herein, we recommend calculated strategies to prevent funded account losses while pursuing our prop firm challenges.
Set Stop Loss Orders
The fx market is highly volatile. It is thus crucial to set stop loss orders on trades. This automated feature helps control your losses if the market moves against your prediction.
Position Sizing
Proper position sizing is critical for fx traders with funded accounts. Traders should avoid risking a large portion of their capital on a single trade, as it can lead to significant losses.
Stay Educated
The fx market is constantly evolving and every trader needs to keep up with the latest market trends, economic indicators, and geopolitical news that can significantly impact the trading prices.
Risk-Reward Ratio
Maintaining a favorable risk-reward ratio is crucial to planning trades and avoiding funded account losses. Generally, the risk reward ratio tends to be anything greater than 1:3. Determine expected return and risk of a given trade.
Diversify Your Portfolio
Diversifying your trading portfolio across different markets or assets can minimize the risk of substantial losses and reduce concentration risk. It is important to conduct a thorough analysis to select a well-balanced mix of investment assets.
Build a Trading Plan
A comprehensive trading plan can make your trading easier. It outlines your risk management rules, entry and exit criteria, and overall strategy that helps you maintain discipline in the volatile market.
How To Protect Funded Accounts Using Trading Tips
Joining a top funded trader program like Next Step Funded can be exciting, especially for beginners. But this excitement can blur the vision of traders in the long run.
Follow these common practical trading tips for retaining funded accounts and continue your journey towarding passing prop firm challenges.
Set Realistic Goals: Don’t get carried away by the success of other funded traders. Think, strategize and set realistic goals that align with your knowledge, skills and experience.
Take Time Before Starting the Challenge: The most common mistake traders make is they start a funded trading account without understanding the rules.
Narrow Down Your Choices: FX trading is risky; try trading in more safe investment commodity markets such as stock market and options market.
Review and Learn from Your Trades: Monitor your trades, both winners, and losers. Identify patterns, mistakes, and areas for improvement.
Utilize Demo Accounts: Practice new strategies or techniques on demo accounts before implementing them in live trading.
At Next Step Funded, we empower traders to clear prop firm challenges and retain their funded accounts for the journey ahead.
How to Secure a Funded Trading Account
Securing a funded trading account involves a combination of trading psychology techniques, risk management practices and — cybersecurity measures.
Many traders end up falling victim to cybersecurity leaks. At Next Step Funded, we educate funded traders on securing their funded trading accounts. Go through the common tips:
- Strong Passwords: Use strong, unique passwords for your trading platform account. Avoid using birth dates or common words. We suggest a mix of uppercase and lowercase letters, numbers, and symbols.
- Two-Factor Authentication (2FA): Enable 2FA for your trading account whenever possible such as a code sent to your mobile device.
- Secure Internet Connection: Trade on a secure and private internet connection only. Avoid accessing funded accounts using public Wi-Fi networks; they are vulnerable to hacking and data breaches.
- Secure Devices: Ensure your computer, laptop, or mobile devices have up-to-date antivirus software and firewalls.
- Regular Software Updates: Keep your operating system, trading platform, and any relevant software updated to the latest versions.
- Beware of Phishing: Be cautious of unsolicited emails, messages, or links asking for your trading account credentials.
- Regularly Monitor Account Activity: Regularly review your funded trading account activity to identify any unauthorized or suspicious transactions.
The security of your funded trading account is crucial for clearing the prop firm challenge without compromising confidential data or information.
What if after all the precautions, your funded account is compromised? Contact the Next Step Funded team for technical support. We will freeze your account, or take other strong actions to mitigate potential losses.
For any more questions or concerns regarding the working of your funded trading account, please contact us. We will be happy to help.