Passing funded trading challenges is sometimes thought of as the holy grail of quitting a job and living a free life, but how are people going about passing funded trading challenges if they haven’t got experience trading?
Fortunately, there’s pattern trading software that uses pattern recognition to find trading patterns. Reading this article could be the paradigm shift you’ve been waiting for, as we look at ways to get funded through trading firms that actually pay, and how people are using these tools to pass without having to think too hard.
What is Pattern Trading?
Pattern trading is a form of trading that seeks patterns in the market based on the formation of price history. When time and price line up in a pattern, it is often expected the price will rally or fall in a somewhat predictable way.
Patterns tell us that the market is building up to a position where traders and other market participants have a decision to make in terms of pricing. This means the market is at a pivotal moment and could be about to move.
Price movement that can be predicted is the key to a trader’s success. Price movement combined with risk management is a key determinant to passing a funded trading challenge.
What is a Funded Trading Challenge?
A funded trading challenge is what prop firms use to assess a trader’s viability. A challenge generally consists of two main features, a profit target and a drawdown limit. There are additional rules but this is the main concept traders must follow.
Profit targets are generally set for between 6% and 10% depending on the firm and amount of funding requested.
The drawdown limits are what limits the losses the trader can run in a challenge. You won’t actually incur the loss as you are simply running a trading challenge on a demo account.
There isn’t a time limit so you can take your time to pass the profit target while avoiding losing too much while you trade.
Once you pass by reaching the profit target on the challenge, you then proceed to the funding stage and effectively pass the Funded Trading Challenge.
Passing the funded trading challenge means proceeding to the next phase which is being funded, and being paid the profits from a new account the prop firm gives you access to.
Why do People want to Pass a Funded Trading Challenge?
People want to pass a funded challenge because it gives access to a funded account once you pass. During the funded account stage, you get paid the amounts you earn by trading the account.
A prop firm often takes a cut of your profits (they have to have a reason to give you access to funds) which is often between 10 and 20% of what you earn on the funded account.
Note that you don’t get paid on the earnings from the challenge phase. The challenge phase is simply a test to see if you can trade properly.
Earning 90% of your trading profits can stack up quickly if you can identify the right trades and take care not to breach the drawdown rules.
Example of Passing Funded Trading
As an example, earning 1% of a small account of $25,000 would mean a payout of $225 ($25 goes to the prop firm if they take a 10% profit split). But with the preferred prop firm you can run up to 20 accounts at a time. Multiply the 1% earning (less the split) means $4,500 hitting the bank account to spend up on whatever you like.
Often traders aim for big numbers, like 40% or 50% in a month, but being cautious and risk using professional risk management means a trader might aim for something like 1% a week or 3 to 4 % a month.
So, as you can see, a steady and cautious trader with a solid and consistent approach could be doing very well by taking their time, being patient and still bringing in more than the average employee.
How do you pass a Funded Trading Challenge?
Passing a funded trading challenge is all about being patient, using effective risk management and hitting the profit target without breaching any other rules the prop firm set.
Hit the target, get the funding.
There are a few key points to note and look out for when trying to pass a funded trading challenge. Trading news events, holding trades overnight, minimum trading days and other rules can affect whether you pass or not, so be sure to read all of the rules carefully for the firm you trade with.
Take your time to reach the target without hitting the drawdown limits as you can take as long as you need to pass.
A couple of tips:
Be slow and steady with risk
No one trade should make or break the challenge
If there aren’t valid trades, simply wait.
There’s no rush to hit the target.
Go in with an idea of your trading results (build up data on a regular broker before buying a funded challenge).
How do People use Pattern Trading to Pass Funded Trading Challenges?
Pattern trading is a way to trade the market at times it is expected the market will move in a somewhat predictable direction.
Patterns develop from the market playing into certain conditions and eventually reaching a completion of the pattern, to which point the market is expected to move.
Patterns occur frequently in markets, and having trade flow is helpful for a trader to wait for pattern setups and trade them, rather than guessing or trading at less opportune times. Pattern trading can help to reduce overtrading, so that the trader waits for patterns to form rather than entering at just any time of the day.
People use patterns to help them pass funded trading challenges, managing risk appropriately and remaining patient because they know a pattern is likely to set up soon. This certainly beats trading at random times to try pass, because the trader is stacking up their probabilities while not over risking any one trade.
They wait for the pattern to show, trade it if it suits them and repeat this process over and over until they pass the funded challenge.
How to find Trading Patterns
Finding patterns on your own is a challenge but fortunately there is an easy way to find them.
The easy way is to get the software that shows you the pattern in real time in the live market, then the trader can trade it.
The hard way is to learn all the patterns, learn what is meant to happen when they show up and work out the risk management procedure for each pattern type and market.
In the next section, you will be shown the hard way (if that is of interest) and the easy way.
Trading Pattern Books
Trading pattern books can help you understand the patterns that exist, how to identify them and also how to trade them once you have found it.
Here are a few books you could buy if you are interested in going deeper into the teaching of pattern trading.
This book has a 4.2 star rating over 282 ratings and is about $15 to buy. It looks into concepts like entries, exits, supply and demand zones which are critical elements to trading.
This book has a 4.4 star rating over only 7 ratings. At just $4 to buy, this book doesn’t have a cult following but sometimes books like this are gold for traders looking to learn real insights into the market.
For those looking for a more professional viewpoint, Wiley Trading offers a textbook for around $145. Wiley Trading produce university level educational materials, so for traders looking to become truly professional this could be the book for you.
This one has a rating of 4.5 stars over 545 ratings making it the ideal pick if the price tag and level of effort suits the reader.
Manara Trading Tool
The easy way is to buy trading pattern recognition software and use the insights to trade from.
The Manara Trading Tool shows an alert when a pattern is setting up or has completed. Both situations could be used to trade on. The complete patterns in the Manara Trading Tool show preferred entry, target and stops. It lays out the image of the pattern over a real time chart so you can visualize where the pattern is and where it might be going.
This software runs on a browser, so there’s no download. Simply fire it up and wait for the patterns to show up.
There’s often a pattern setting up in the tool every 10 to 15 minutes.
Manara Pattern Trading Screenshots
Using the Manara Pattern Trading Tool
The Manara tool gives you trades across a variety of markets and makes it easy to see what the pattern looks like on the chart, since it draws the image on the chart for you.
Whether you choose to trade patterns from the incomplete section or wait for a complete pattern to form, or a mix of both, the Manara pattern tool can save a ton of time and stress. It makes finding trades easy, simply click the alert and see the chart with a pattern overlay.
Being patient can be hard when you feel like trades are setting up, but using pattern recognition software makes it far easier to wait for the right trades to set up without feeling like you need to rush in.
The video below shows how to use the Manara pattern tool and explains a strategy used to pass the funded challenge.
How to Access a Funded Trading Program
Accessing funded trading programs is fairly simple. It doesn’t require the usual credit checks and banking rigmarole that comes with many loans because you pay for the challenge and are assessed purely on your trading ability in line with their rules.
To access a funded trading program, simply buy the preferred challenge based on the capital offered and rules associated to the program. Then pass the challenge, then start trading the funded account where you can be paid based on what you earn. There’s two prop firms below that offer access to funding.
Apex Trader Funding
Apex trader funding offers up to 20 funded accounts at a time, big discounts and reasonable rules. They also have automation when it comes to payouts and they pay (confirmed by Global Finance Trading and many others).
Check out their programs and rules.
TradeDay
TradeDay is similar to Apex Trader Funding however it has a more reasonable drawdown rule, since it is not trailing (see rules for more info).
The video below covers some of the rules of TradeDay challenge.
How do you get paid from a Funded Trading Program?
Funded Trading Programs require you to pass the challenge first, then once you access the funded account (starting a new account after passing), you can then trade and earn from the profits.
Often there is an initial amount that is 100% yours without any profit split going to the prop firm. After that point, it’s often an 80 or 90% split, sharing 10 – 20% with the prop firm funding you.
Once you earn and request a payout, the prop firm sends the funds to your bank account for you to spend as you wish. It’s real money and people can live off their prop trading if they earn enough.
What Platforms can be used for Trading with Funded Trading Programs?
Apex Trader Funding offer Tradovate or Rithmic which can both run through Ninjatrader 8.
TradeDay use Tradovate, Ninjatrader or Jigsaw.
Check out the video below for the Apex Trader Funding Tradovate Setup Guide.
How to start Trading with Funded Trading Programs using the Manara Trading Tool
To trade funded accounts using the Manara Trading Tool, simply purchase a challenge with Apex Trader Funding or TradeDay and then buy the Manara Trading tool to start getting the trade flow of fresh patterns in real time.
This page is full of guides for both the Manara Trading Tool usage and also the Apex setup.
TradeDay rules seem a little easier than Apex due to the trailing drawdown (TradeDay uses a fixed End of Day drawdown compared to a live trailing drawdown). In saying this, Apex Trader Funding is far more popular. This is probably due to the discounts they offer.
Apex Trader Funding Coupon Code: TWXFSWMC
Offers at least 50% off, or the highest offer available at the time.
Manara Pattern Trading Tool Access Code: globalfinancetrading
(Required to access any Eaconomy products)
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