In this blog, we delve into the fascinating world of proprietary trading firms, examining the success rate of traders who pass the evaluation stages to become funded. We’ve gathered compelling statistics published by these firms to provide insights into the journey and success of individual traders.
The 90-90-90 Rule and Proprietary Trading
The well-known 90-90-90 rule in trading indicates that 90% of forex traders lose 90% of their capital within the first 90 days. Consequently, traders are increasingly turning to proprietary trading firms for funding, choosing profit splits over the risks associated with trading their own capital. Proprietary trading firms offer a compelling alternative with limited risk and substantial support.
My Forex Funds Evaluation Process and Success Rate
Let’s examine My Forex Funds’ evaluation process, which consists of two phases. The first phase requires traders to achieve an 8% profit target without exceeding 5% daily or 12% maximum drawdown limits over a minimum of 5 trading days within 30 calendar days, with a possible 14-day extension under certain conditions. The second phase demands a 5% profit target within the same drawdown limits, over 5 trading days in a 60-day period. Upon passing both phases, traders are granted a funded account.
However, statistics reveal that only 14% of traders pass phase one, and of those, just 27.5% succeed in phase two. Even more striking, only 3.5% of funded traders receive their first payout. Additional insights for October and November 2021 include:
- October 2021 saw 18% pass phase one, 31% of whom passed phase two, resulting in a mere 4% reaching their first profit split.
- In November 2021, 10% passed phase one, 24% of those cleared phase two, but only 3% received their first payout.
- Key findings: Most traders don’t use a stop-loss, the most successful traders employ stringent risk management, and holding trades overnight or over weekends increases the risk of failure.
FTMO and Fidelcrest: A Comparative Analysis
FTMO’s 2021 statistics highlight over 960,000 created accounts, with over 90,000,000 trades executed, and an impressive $29,000,000 distributed in payouts. Most traders preferred gold (XAU/USD) and EUR/USD for currency trading.
Fidelcrest, in contrast, focuses on trading habits and risk management, revealing that over 35% of their traders don’t use stop-losses during challenges, and the most successful traders are those with excellent risk management skills.
The Funded Trader: A Success Story
The Funded Trader, since its inception in May 2021, has paid out an astonishing 30 million dollars to its traders, using various payout methods like Deel, cryptocurrencies, and Wise.
Conclusion
While payout statistics are often the most highlighted, the journey to becoming a successful funded trader is equally important. Effective trading strategies, thorough understanding of terms and conditions, and robust risk management are key to maximizing chances of success in proprietary trading firms. Remember, success in this field is not just about earning profit splits but also about consistent and strategic trading.
