Making The Most Of A Free Trading Trial With A Prop Firm
Prop firms offer a golden opportunity for anyone who is interested in financial trading but doesn’t want to risk losing their own money. They provide fully funded accounts with high leverage and access to leading trading platforms. However, to be eligible for an account, you’ll need to prove a certain level of competence.
This presents a common dilemma for more inexperienced traders: how can you learn your craft if you can’t gain access to an account? The answer is by signing up for a free trial for prop trading training. We offer anyone a 14-day free trial, where you’ll be able to trade in simulated forex market conditions.
How does the free trial work?
You’ll be using the same platform as live traders, so you’ll get to find your way around the interface and familiarize yourself with the tools. You’ll also be able to trade with virtual money, learning how to manage risk, use leverage and draw down options and test out trading strategies.
Any profits or losses you make during the trial will be virtual, so there’s no financial pressure and you can gain experience of making quick decisions without real-world consequences. The only thing you’ll need to invest is your time. However, no one likes wasting time, so we’ve put together some tips for making the most of your free trial.
Remember that even if your free trial doesn’t go the way you hoped, the experience won’t be wasted: you’ll either decide that forex trading isn’t for you, or feel galvanised to work out what went wrong, renew your efforts and try again. If you are successful, you can progress onto the evaluation program, which is the final step towards securing a full live account.
Making the most of your trial
If you are serious about making money as a prop firm trader, you’ll see the free trial as a training opportunity rather than just a casual dabble in the forex market. You might have heard that forex trading is an easy way to make a quick buck, but this is not true: you’ll need to put in some work and have a good understanding of how the markets work first.
Forex trading can be complex and the markets are volatile, so they need to be treated with respect. To give yourself the best chance of success, take a strategic approach rather than try to wing it. Here are the steps you need to take.
Understand the prop firm’s rules
The business model of a prop firm relies on having successful traders on board, who will generate enough profits for the firm to provide funded accounts and cover any losses. They want you to do well, because this is how they sustain their business. Therefore they can’t afford to support unskilled traders who take risks and make heavy losses.
This is why you’ll need to prove that you can operate within the rules of the prop firm and hit your profit targets. The best approach is to understand exactly what’s required of you from day one, rather than get caught out unawares.
All prop firms will require traders to manage risk responsibly, and operate within the maximum drawdown limits, leverage, and lot size restrictions. They will assess your trading performance based on consistency of approach, evidence of risk management such as appropriate use of stop losses, and the ability to meet a certain level of profitability.
This information should be transparently displayed on their website, along with the trading styles they permit.
Have a plan
If you want your free trial to go well, avoid diving straight in without a plan. Successful trading requires a strategic approach, so you should prepare a structured trading plan in advance. This will require a basic understanding of how the forex market works and the currency pairs that you want to trade.
If you are a complete beginner, spend some time brushing up your knowledge—there are plenty of free resources available on the web, and also books, courses, podcasts, and social media forums. Inexperienced traders are advised to stick to trading the major currency pairs, because they have liquidity (meaning that there are always buyers and sellers to be found).
Think about how much time each day you will have to devote to trading, because this will influence which trading style will work best for you.
For example, if you can spend several hours a day trading, then you may wish to try scalping or intraday trading, which are short term trades made within a day or even an hour or minutes, and require intense concentration.
If you can only spend an hour or two each day trading because you are fitting it around a full time job or other commitments, you may prefer swing trading. This is a short to medium term approach, where the trades are made within a few days or even weeks, so will require less intensive day to day monitoring.
Your personality and temperament also play a part in the type of trading strategy that will suit you best: if you are naturally quick witted and impatient, you may be more suited to scalping or intraday trading. If you are more cautious and prefer to take a methodical approach to decision making, then swing trading is likely to be your preferred option.
Prioritise risk management
Most prop firms are looking for traders who can manage risk well and stay within the prescribed drawdown limits. It can be tempting to over-leverage in an attempt to impress and exceed your profit targets, but this an unwise approach for inexperienced traders. At first, keep your risk per trade low, no more than one or two per cent per trade.
Whichever trading strategy you choose, always define your stop-loss and take-profit levels to protect your trading account and ensure that you don’t make disastrous losses. Start small and set realistic profit targets rather than aiming too high at first.
If you do make a loss, step away from the screen and give yourself some mental space to work out what went wrong, rather than jumping into another trade in an attempt to compensate. Rushing into ‘revenge’ trading is likely to exacerbate the problem and send you on a downward spiral, rather than correct a mistake.
Establish a trading routine
If you are serious about progressing to the next level, treat your free trial as if you were trading with a live funded account. Trade during the times that you would in a live trading scenario so that you will have continuity when and if you do decide to move to the next stage.
If you are trading majors such as the US dollar (USD) Euro (EUR) and British Pound (GBP), then the markets are most active when the New York and London exchanges are opening and closing. Conveniently, this is between 8am and 9am in the morning, and 5pm and 6pm in the evening, so even if you have a full time job, you will still be able to trade at peak times.
Set yourself a routine, such as checking your open positions first, then reviewing any economic news or data releases that are relevant to your trading strategy. If you are using technical analysis, such as interpreting graphs and charts to identify historic price patterns for your currency pairs, carry out this step next.
When you are ready, identify suitable trading opportunities in the market and place your trades. However, avoid trading just for the sake of it; always stick to your trading plan and risk management rules. Even though you are not taking real financial risks, you still need to prove that you don’t make reckless decisions if you want to progress.
Track your performance
A free trial is an excellent learning opportunity even if it doesn’t quite go as you hoped. Track and review your trading performance so that you can reflect in more depth on the trades that were most successful, and the areas that require improvement. Think about your reasoning for placing each trade, and identify patterns in losing or winning streaks.
If necessary, make adjustments to address any weaknesses you have pinpointed in your strategy.
Moving on to the evaluation program
If you perform well during the free trial, you may wish to move on to the evaluation phase. You’ll pay an upfront fee that is refundable if you pass the program. The two-step option involves taking two tests, while the one-step option is a single test.
When deciding which option to take, consider how confident you feel about your trading skills and your ability to operate within the prop firm’s rules. The two-step option is best if you still feel that you are finding your feet: if you do pass both tests, you will feel much more confidence in your abilities than if you have just passed one test.
If you are confident you can meet the requirements, then the one-step program is suitable for you.