Forex trading experts are giving their insights on common errors Forex traders make when trading on a prop account.

We have seen first-hand some of the mistakes and traps that lead to Forex traders blowing a Forex trading account of a prop firm. Hopefully we can share some insights of these to help you improve someway. After all, it is in our best interest for all our Forex traders to succeed and make money.

So, lets break down and take a look at how a Forex trader can learn from mistakes and build upon trading success. It all requires knowledge and time, but by tweaking your formula you can better your chances with a Forex trading account.

Advanced statistics

The advanced statistics is a useful and powerful tool for our prop traders, having knowledge on what to look for is crucial. Here if we look at this unfortunately terminated trading account, we can see some things are apparent.

The profit factor is far below 1 and sits at just 0.2. This is one of the lowest profit factors we have seen over a sample size of this amount of trades. The average profits sit at £17.76 whilst the average loss is £69.43 over just 16 trades.

The largest loss has also had devastating effects at £294.15. This account started out at £10,000, so this loss on one trade is very significant considering the 5% drawdown rule in place. When Forex traders plan and allocate risk, they should think of these possibilities and always use appropriate risk so that their Forex trading account won’t be in jeopardy.

Due to the combined negative risk to reward ratio and losing trade total, this Forex trader does have a negative expectancy which is not a good thing long term. This trader should look at the current win rate of 43.75% and manage both the risk to reward and risk per position if they want to increase profitability. It is possible to be a profitable Forex trader and have a win rate less than 50%, but the other factors need to be appropriately addressed.

Setting all trading levels

Through all our account reviews, we are still finding many novice Forex traders fail to set both stop losses and take profits. All of the long-term winning Forex traders we have, all set both stop losses and take profit levels. Without them, then a Forex trader has high chances of failure at some point.

They should be used a gospel along any trading strategy. And they complement each other. Without stop losses you have no risk, and without take profits you have no destination for reward. No end points. Just allowing the market to control you Forex trading account. By making sure and staying strict with these levels, you can control your prop trading account yourself.

Too many instruments

As we have said before, being the master of a couple of instruments doesn’t mean you are missing out on opportunities, but rather improving your potential for more consistent growth. Rather than focus on the 10-15 range of symbols, attempting to catch every breakout under the sun, pick 1-3 that has given you best success thus far and run with them.

This will allow you to home in on less fundamental news coverage as you will be looking at announcements for only select currencies. It will also lead to more discipline in other areas. Such as more refined and clear cut technical analysis.


All our funded accounts come with a fixed equity stop out level. Once the account equity level gets below this fixed stop out bar, we will close all running trades and disable trading and access. The stop out level is a fixed value for each funding level, this means that any profit which has been made by the trader increases the loss allowance.

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