Most traders enter prop firm challenges with big expectations, but only a small percentage manage to pass them.
In my opinion, the biggest reasons are overtrading, poor risk management, revenge trading and lack of patience.
What do you think is the number one reason traders fail challenges? Is it strategy, psychology or risk management?
The number one reason traders fail challenges is a breakdown in risk management driven by poor psychology. While having a solid strategy is important, letting emotions dictate trade sizing or leading into revenge trading will quickly breach daily loss limits and maximum drawdown rules. In prop firm trading, consistency and capital preservation are everything.
Sticking to a strict risk-per-trade model and respecting news rules are what separate funded traders from the rest. What risk management rules do you personally use to protect your account during a challenge?
