Every new traders dream is to have big capital to trade. The average Joe like myself this is a long long way in the future even if and when we get to the point of consistent trading. Most of us aren't in a position to start trading with a large balance and even if we had the capital available we probably would be wary of using a big chunk of our life's savings to add to trading account when you just don't know if you can make it work for sure.
So the answer right now could be use prop firms money. They offer a 1 time fee to purchase evaluation challenges. Lets take FTMO for example the offer a wide range of starting capital for varying costs their biggest challenge is currently $200k at a cost to purchase at around $1000.
There are tight rules to follow please check each firm you use as they are often slightly different the rules include a maximum drawdown with FTMO right now its 10% of starting balance so in this case $20k. Max daily drawdown rule of 5% of starting capital resetting at midnight eest so $10k.
You have 30 calendar days to pass stage 1 so 22 trading days Mon to Fri I think it works out to make 10% gain in capital.
You have 60 calendar days to pass stage 2 and make a 5% gain in capital.
Remember to reach the capital profit you need to stick to drawdown rules and don't break them or its game over you fail and lose the challenge fee you paid.
So great if you can do that you then get a real account from them that you can actually make profit on. Well the account is still a demo but prop firms once they know you are consistently profitable they will copy your trades to the live market to make gains.
Regardless if they use your trades or not if you make gains on your account they will pay you a profit spit of that gain. So there are minimum time limits of trading once live before you can request a pay out. Say you have the live account and make $10k gain by the time you request your profit they will pay you out a % of that in FTMO's case the starting profit level split is 80% to you and they keep 20% so you would get paid out $8k not bad right for your $1k risk not only that they then pay you back your initially fee around $1k so total pay out of $9k.
Great right party time? Well not for me my plan if I can get tot this stage I would buy another $200k challenge with FTMO this would then be $400k funding with FTMO and this is the max funding allowed (barr if you scale) I will talk about scaling in another blog in the future.
I have $8k left right what now party time? Nope then I move onto other prop firms and use that money to do so MFF and TFF to be exact details below.
So next challenge is going to be with My Forex Funds MFF $300k for approx $1300
Max funding with MFF is $600k I would only buy a second challenge if I pass the first 1 and use that profit to do so.
Next challenge True Forex Funds TFF $200k approx cost $1000
Max funding with MFF is $400k I would only buy a second challenge if I pass the first 1 and use that profit to do so.
Quick tally up got paid $9k from FTMO then bought another challenge with them for $1k and a challenge with MFF for $1.3k and a challenge with TFF for $1k total remain for inital pay out = $5700 guys this is all theory but that money then is sent to my live account. The big goal for me is to use any prop firm funds to fund my live account as with live account there are no drawdown rule so you can take a bit more risk and there is so much less pressure if you have a bad spell of trading.
So it all goes great and I then have FTMO total $400k, MFF total $600k and TFF $400k = total $1.4m in funded capital. Now wow that's some power take it easy and make 5% a month that's $70k total at average 80% pay out = $56kpm that's not a bad wage right.
How fast could it be done. Well depends on risk and how good your trading is. I would expect to pass stage 1 and 2 would take a couple of months then an extra 2 to 4 weeks to receive your first pay out so in 3 months the ball could be rolling buying your second challenge and the first accounts with MFF and TFF.
6 months down the road have both FTMO's live and making pay outs and first accounts with MFF and TFF paying out. Add another 3 months to be receiving the pay outs from the second MFF and TFF accounts.
So 9 months total to have over $1m in funding. Of course you could buy 2 account straight away with MFF and TFF with the first FTMO pay out and have all accounts paying out within 6 months.
If you have read this far yes it's a dreamy theory post but this is actually my real plan right now.
What then? Keep using pay outs to fund my live until that is a tidy sum say $1m and also go for more lesser known prop firms they are riskier but if its using risk free funds why not take a risk.
Obviously after some big pay outs are coming in every month I would be taking some out for myself as why not that's why we are doing all of this trading stuff right!
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