A prop firm should not even consider drawdown when a trader does a profit split. Give a brand new account like FTMO does. That's just ridiculous that any prop firm would consider a profit split to be part of drawdown.
I know these videos are old. But i keep waiting to hear someone say that the money is all digital and not physical. No real money is exchanged if its from a prop firm.
Trailing drawdown is terrible especially in a month where you are just breaking even ,,,,,because every time you go into drawdown it accumulates so that eventually even if you are say 50$ above breakeven at the end of the month, the drawdown is so close that it just goes bust.
I’ve had it happen too. Worse, I had one where I was both in a winning trade and nowhere near the limit. They claimed the account was breached and despite having screenshots, I couldn’t prove otherwise. The only thing they would accept would have been a screen recording of the trade playing out. Yeah right,like we all record each and every trade. 🙄
The point is a trailing drawdown will ALWAYS stop you out if you dont reach profit first and if the prop firm doesnt reset the drawdown after......every prop firm with trailing drawdown in my opinion is a scam, I wont trade with them ever!....trading is hard enough as it is without having to always watch your drawdown. I practiced with trailing drawdown vs static and your odds are always better with static,,,,period
Any drawdown that is based on unrealized equity is SH!T. Most Prop Firms are designed to make you a day traders/scalper with this type of drawdown. Any drawdown based on the starting balance of the day is ok. But still, everything can be solved if you have good Trade Management System in place: Basically, 1. You must ONLY have one active trade at any given time. 2. You MUST NOT carry trade to the next day. (basically, you must be a day trader) 3. Your SL + TP MUST be less than Daily Drawdown. (example: if Daily Drawdown is 4%, SL (1%)+TP(3%) ) 4. DON'T try to pass the Challenges in one day. Spread it to at least 3 days. 5. You MUST have a good RiskToReward Ratio. Such as 1:3 or more. 6. You MUST set SL to breakeven to lower the potential drawdown. (refer to point no.3)
I think its stupid to breach people for going into draw down during a winning trade. That doesn't make any sense to me. A prop firm did me like that recently.
many of them are using fuzzy terms unclear... along with the phrases balance based drawdown and equity based drawdown which again does not clearly define them... Neither one of these fuzzy descriptions appear to be based on a fall below the original starting balance $ amount... so both will get you out of the game faster...
I think its stupid to breach people for going into draw down during a winning trade. That doesn't make any sense to me. A prop firm did me like that recently.
@@BMWE-hm7uz You are not understanding what I said. I said it was a stupid rule. I can understand if I lost the trade and the account went negative. That's a breach. But it shouldn't count as a breach in the middle of a trade. But I get it though. That rule is in place to stop more people from passing the challenges.
@the7figuremaker I understand what you said. But that's essentially the props stop loss right? And if your stop is hit by a tick, you don't call the exchange up and say well it won and hit by a tick.
@@BMWE-hm7uz Umm I think what the poster is saying is like: If you're floating 15% in Profit in a given trade, for instance, and price dips below 10% the next day (perhaps due to a News spike or something), it will count as a breach & you'll loose the account smh. And yes, I agree with OP. That Trailing drawdown thing is a dumb rule designed only to get rid of even more people unnecessarily. In my opinion, anything above the initial balance should be within the traders prerogative to use as they see fit. The drawdown should be static at the -10% mark ...but of course we all know that's not going to happen, since these prop firms are primarily businesses for profit, and one can't really say they care in the least about traders.
actually that wasn't bad drawdown, the big con is daily loss limits. you could be up 10k but lose 1k and they close your account. the only good prop firms are ones without daily loss limits. If you have 6% static drawdown like in your example and no daily loss limit then that's alright by me, on a 100k account (which it never actually is) then you have a real balance of 6k, with a daily loss limit - your real balance is that daily loss limit. but your 4% is a good daily limit.
God bless you Andrew. I need to get money together for City Traders. I did a challenge with a prop firm advertising on this channel that had relative drawdown and double phase challenge twas stressful and all I did was get pissed and revenge trade. Pathetic experience
Thanks Andrew. Consider making a video about slippage as well. I have prop accounts by two prop firms. The slippage on one of the accounts is ridiculous compared to the other. Every single trade there is slippage. Positive thing is it can work in your favour if it is a winning trade. Shaky though. Traders should also enquire about commissions before hand. Each prop firm is different.
Avoid prop firms with trailing daily drawdowns. Those are just designed to make traders lose and nothing else. MyForexFunds used it and they were eventually exposed as a scam. No serious trader uses a trailing daily drawdown.
That is completely false. With discipline you can achieve the target as long you have a calculated parametrised edge. The thing that’s killing traders is spread and comission
A prop firm should not even consider drawdown when a trader does a profit split. Give a brand new account like FTMO does. That's just ridiculous that any prop firm would consider a profit split to be part of drawdown.
Trailing drawn down means the "Firm" is really no longer funding you , it is your initial profit that is at risk
Good point, thanks for sharing!
👍🏿 It's the Daily Drawdown rule is why most fail at challenges, which I did as well in the beginning before understood all of the rules calculations.
Thanks for sharing your thoughts.
I know these videos are old. But i keep waiting to hear someone say that the money is all digital and not physical. No real money is exchanged if its from a prop firm.
Relative drawdon is a scam
thanks for sharing your opinion.
What of equity drawdown that is static
Trailing drawdown is terrible especially in a month where you are just breaking even ,,,,,because every time you go into drawdown it accumulates so that eventually even if you are say 50$ above breakeven at the end of the month, the drawdown is so close that it just goes bust.
I’ve had it happen too. Worse, I had one where I was both in a winning trade and nowhere near the limit. They claimed the account was breached and despite having screenshots, I couldn’t prove otherwise. The only thing they would accept would have been a screen recording of the trade playing out. Yeah right,like we all record each and every trade. 🙄
It only has to drop in by a tick, it could go on to make a million after that, but it would still be breached
The point is a trailing drawdown will ALWAYS stop you out if you dont reach profit first and if the prop firm doesnt reset the drawdown after......every prop firm with trailing drawdown in my opinion is a scam, I wont trade with them ever!....trading is hard enough as it is without having to always watch your drawdown. I practiced with trailing drawdown vs static and your odds are always better with static,,,,period
Are you going to start Futures trading prop ( Not OTC CFD) but real exchange traded product so the issue of market Maker OTC conflict goes away)
Hi, at the moment we don't have the plan for Futures trading yet.
Can i trade futures with your prop firm?
Not at the moment.
Another really helpful and informative video Andrew - thanks! More please!
Thank you!
Andrew do you have a own a propfirm ? and if you do , what is the name of that propfirm?
Hi @edwinmusonda3221, yes, our prop name is The City Traders, you can find more details here thecitytraders.com
Excellent video, Andrew. Any aspiring trader needs to watch this. The City Traders 1 phase assessment with static drawdown is the best out there.
Thank you Simon for your kind words and support as always! :pray:
What if i widraw all my 10% profit on relative drawdown? U mean ill be at zero 0% drawdown? That doesnt make sense
that's how it works in many prop firms!
This was very informative. thank you Andrew! I was wondeirng why I don't see you on Forex Signals anymore
Andrew is here at The City Traders, check the link to discord to join our community.
Any drawdown that is based on unrealized equity is SH!T. Most Prop Firms are designed to make you a day traders/scalper with this type of drawdown.
Any drawdown based on the starting balance of the day is ok.
But still, everything can be solved if you have good Trade Management System in place:
Basically,
1. You must ONLY have one active trade at any given time.
2. You MUST NOT carry trade to the next day. (basically, you must be a day trader)
3. Your SL + TP MUST be less than Daily Drawdown. (example: if Daily Drawdown is 4%, SL (1%)+TP(3%) )
4. DON'T try to pass the Challenges in one day. Spread it to at least 3 days.
5. You MUST have a good RiskToReward Ratio. Such as 1:3 or more.
6. You MUST set SL to breakeven to lower the potential drawdown. (refer to point no.3)
thanks for sharing this, even better trade with prop with a static drawdown! :)
@@user-ok8tm8cu3i True 👍🏿
I think its stupid to breach people for going into draw down during a winning trade. That doesn't make any sense to me. A prop firm did me like that recently.
Did they explain what is the reason behind that breach?
All questions have been answered. Thank you Sir.
Great!
many of them are using fuzzy terms unclear... along with the phrases balance based drawdown and equity based drawdown which again does not clearly define them... Neither one of these fuzzy descriptions appear to be based on a fall below the original starting balance $ amount... so both will get you out of the game faster...
I think its stupid to breach people for going into draw down during a winning trade. That doesn't make any sense to me. A prop firm did me like that recently.
Wasn't forced to win though was it? It's only after the fact it won.
Whilst in drawdown it wasn't winning, breached the rules and that's it
@@BMWE-hm7uz You are not understanding what I said. I said it was a stupid rule. I can understand if I lost the trade and the account went negative. That's a breach. But it shouldn't count as a breach in the middle of a trade. But I get it though. That rule is in place to stop more people from passing the challenges.
@the7figuremaker I understand what you said.
But that's essentially the props stop loss right? And if your stop is hit by a tick, you don't call the exchange up and say well it won and hit by a tick.
@the7figuremaker in fact I'd probably say that if it's hit your daily drawdown before your stop loss, then your position size was far too big
@@BMWE-hm7uz Umm I think what the poster is saying is like:
If you're floating 15% in Profit in a given trade, for instance, and price dips below 10% the next day (perhaps due to a News spike or something), it will count as a breach & you'll loose the account smh.
And yes, I agree with OP. That Trailing drawdown thing is a dumb rule designed only to get rid of even more people unnecessarily.
In my opinion, anything above the initial balance should be within the traders prerogative to use as they see fit. The drawdown should be static at the -10% mark
...but of course we all know that's not going to happen, since these prop firms are primarily businesses for profit, and one can't really say they care in the least about traders.
actually that wasn't bad drawdown, the big con is daily loss limits. you could be up 10k but lose 1k and they close your account. the only good prop firms are ones without daily loss limits. If you have 6% static drawdown like in your example and no daily loss limit then that's alright by me, on a 100k account (which it never actually is) then you have a real balance of 6k, with a daily loss limit - your real balance is that daily loss limit. but your 4% is a good daily limit.
As a trader it is your circuit breaker, you shouldn't be losing that in your account in any given day. It's part of risk management.
God bless you Andrew. I need to get money together for City Traders. I did a challenge with a prop firm advertising on this channel that had relative drawdown and double phase challenge twas stressful and all I did was get pissed and revenge trade. Pathetic experience
It's good to be aware of the things we need to improve, good luck with your next assessment
Why don't you make a video on which are which relative vs static and which have free challenges vs paid for .
thanks for the idea!
Static is better, allows you add to your winners, and scale into trades, as you go into profit
We agree!
Thank you Andrew. I am missing Oliver. Feel free to include him in your videos.
Sure thing!
Thank you very much I didn't know about that. How do I start funded account trade
Start here thecitytraders.com/ :)
Is this only apply to daily drawdown or for both max n daily?
static drawdown is on max drawdown
Thanks Andrew. Consider making a video about slippage as well. I have prop accounts by two prop firms. The slippage on one of the accounts is ridiculous compared to the other. Every single trade there is slippage. Positive thing is it can work in your favour if it is a winning trade. Shaky though. Traders should also enquire about commissions before hand. Each prop firm is different.
Please state the high slippage one vs the normal one. It will help the community and me lol.
Sometimes trading on volatile times can cause slippage, a lot to consider when we talk about slippage but yes good idea to talk about on next videos.
Found it very useful Andrew...
Great to hear!
Great information! Thanks
Glad it was helpful!
What about the daily draw down?
As a trader it is your circuit breaker, you shouldn't be losing that in your account in any given day.
if it weren’t for trailing drawdown, id be up in every single trade it auto liquidated me in. Its not even realistic in my opinion.
Avoid prop firms with trailing daily drawdowns. Those are just designed to make traders lose and nothing else. MyForexFunds used it and they were eventually exposed as a scam. No serious trader uses a trailing daily drawdown.
@@focus45554 agreed
thanks for sharing your thoughts
useful, thanks
You're welcome
Thanks for the info
No problem 👍
Thank you
You're welcome
Thank you :-)
Your welcome!
That is completely false. With discipline you can achieve the target as long you have a calculated parametrised edge. The thing that’s killing traders is spread and comission
Only amateurs fail because of trailing dd
even you get the target in the long run in live account after test you lose with relative drawdon that I considere scamming people.