6 Simple Steps to Get a Funded Trading Account
As a newbie trader, getting a funded forex trading account may seem complicated or even miles away. The reality is, getting a funded trading account is actually a very simple process and can be broken down into 6 steps. It’s worth mentioning that not everyone’s prop firm funding journey is the same, this is purely the most straightforward way to become a funded trader!
In this article, we’re going to look at 6 steps to follow in order to obtain a funded trading account with a forex prop firm. Let’s get into it…
How To Get a Funded Trading Account in 6 Simple Steps
These days, you can’t scroll online for more than 5 minutes without crossing paths with either a prop firm or a trader using one! Luckily for us traders, this has opened the door to a huge amount of opportunity and capital that was previously reserved for professional traders and private funds. Now, even we retail traders with full-time jobs are able to get our hands on hundreds of thousands of dollars to trade with! With that being said, it can be a confusing world to break into. We’ve funded traders all around the world, so we feel confident in stating the best practice and/or best path to follow if your goal is to get funded.
- Build A Forex Trading Strategy
Before even looking at prop firms or figuring out which prop firm you should be working with, you need an established forex trading strategy. This strategy needs clear and defined rules. The most successful trading strategies are those with the lowest degree of human interaction, as human error or subjectiveness can lead to many issues and dwindling returns. We’ve published a full guide on how to create a trading strategy to pass prop firm challenges, that may be worth checking out.
In short, you need to create a rule-based trading strategy that looks at risk management, entry criteria, stop loss parameters, take profit parameters, and trade management. All of these rules should be clearly defined so that even a newbie trader could follow the strategy and become profitable.
If there is any nuance or subjectivity, your trading strategy is likely to fail. This step is by far the most important step, and it won’t happen in days – this will take weeks or months of work to achieve. We’d strongly recommend reading this article, breaking down how to manage drawdown during a forex trading challenge.
- Back Test & Forward Test Your Forex Trading Strategy
Once you have a trading strategy, you need to be confident enough in the strategy to be able to pull the trigger every single time, even if you’re in a drawdown. Where does this confidence come from? This comes from back testing.
Back testing is using past data to test an objective trading strategy hundreds of times, to test the effectiveness of the strategy. This is a great way to see if a strategy is profitable or not profitable, without wasting capital or years of time trying to make it work. There are many tools in the market to back test a strategy within hours, rather than years. Once you have over 200 trades, this gives you a good idea of the success and profitability. Ideally, you’ll want maybe 500+ trades if you’re taking this seriously and looking to create a strong trading strategy. If you’re appearing to be profitable in a back test, you need to deploy a forward test.
This requires trading these setups in a live market, with real money. You don’t need to use a large amount of capital, just enough to be taking this seriously. The point of this forward test is to train you to be taking these trades, without human error coming into effect.
- Choose Your Prop Firm
Once you have an established trading strategy, it’s time to choose a prop firm to work with. There are many options to choose from, but it’s important to understand which firm is right for you.
Some of the key aspects to consider:
- Do they provide real trading capital?
- Do they have a great reputation?
- Are there any withdrawal proofs?
- Is capital scaling offered?
- What are the rules for the prop firm?
- Who provides their trading accounts?
- Can you find real details about the business?
Once you have been through all of these criteria, you should have a good idea of which firm suits you. We are biased, of course, but we’d always recommend using a trading firm that provides traders with live trading capital. At Lux Trading Firm, we give all of our traders real capital, rather than having you trade on demo accounts. We believe in doing things properly. When our traders win, we win! For this reason, we’re incentivized to provide the highest quality trading environment for our Elite Traders.
- Modify Your Trading Strategy To Fit The Prop Firm Rules
Now you’ve selected a prop firm to be working with, you need to ensure you can meet the criteria set out in the ruleset. What does this mean? Well, you will now know the drawdown limit, loss limit, profit targets, and trade frequency requirements. You’ll also know how your trading strategy performs, from the back test that you have done prior to finding a prop firm. If both of these align, great! If not, you’ll have to make small amendments to your risk management strategy to ensure that you don’t violate the firm’s rules. We’d strongly recommend trying to stay ‘alive’, rather than focusing solely on profits. The best forex traders are just those that have managed to stay in the markets for the longest!
- Buy A Prop Firm Challenge
Now we’re all ready to get started and try your strategy within a prop firm challenge. This is where you’ll purchase the challenge. We see so many traders trying to purchase a challenge prior to figuring out any kind of strategy, and it shows. The price of prop firm challenges ranges, depending on what size capital you’re applying for. I can’t recommend enough the importance of using a forex prop firm that is reputable and has your best interest at heart. If you’re interested in working with Lux Trading Firm, click here to purchase a prop firm challenge and get the ball rolling!
- Pass Your Prop Firm Challenge
It’s time to pass the challenge! All the hard work is already done by this point – deploy your strategy in the live markets and let it do the talking! Stick to the rules, and you’ll pass the challenge! Once the challenge is passed, you’ll have your funded trading account. The next step would be to continue using this account and withdraw your profits each month. Focus on staying safe within the markets and keeping a hold of the account, instead of focusing purely on profits.
In Summary – Obtaining A Funded Forex Trading Account in Easy 6 Steps
In conclusion, these are the 6 steps you need to follow if you’re looking to become a funded forex trader in the right way! We’ve seen this done successfully hundreds of times with traders all around the world. If you have any questions about getting funded or are looking to work with Lux Trading Firm, please contact our team now!