FTMO Broker Launch Ahead

Hey Prop Traders, here’s what is buzzing in the prop trading today

🗞️ LATEST PROP TRADING INDUSTRY NEWS

1. FTMO Plans Retail Broker Launch to “Stay on Top of the Foodchain”

2. Trading Pit Leadership Leaves to Pursue New Ventures

3. Apex Trader Funding Clarifies PA Rule Confusion

4. The Funded Trader Provides Update on Payout Delays

5. MyFundedFX Drops DXTrade and MatchTrade Apps

6. Funded Engineer CEO Defends Recent Setbacks

✂️ LATEST PROP FIRM DISCOUNT PROMOTIONS

• Axi Select First FREE Funded Trader Program

• Apex Trader Funding Flash Sale 90% OFF to May 20th  

• My Funded Futures 30% off for New Traders

• Blue Guardian 25% OFF ALL Accounts

• Alpha Capital Group 20% off in May

• City Traders Imperium Get Funded for Only $10

• Goat Funded Trader up to 15% Off Challenges

📌 PASS THE PROP TRADING TIP

Did you know that ONLY 5-10% of your funded account (the maximum loss) is real capital? The remaining 90-95% is your leverage. 💰

While prop firms may say that you are controlling $250,000 of capital, in reality, only a small fraction of the total amount at risk is your actual capital. 📉

The rest, the majority of the account balance is available for leveraging your trades. 💼

For example:

Let's say you have a funded trading account with $50,000. According to the statement, only 5% of this amount, which is $2,500 ($50,000 0.05), is your real capital. The remaining 95%, which is $47,500 ($50,000 0.95), is allocated for leverage. 💳

Now, suppose you decide to use leverage to enter a trade. Your broker offers a leverage ratio of 20:1. This means for every $1 of your real capital, you can control $20 in the market. 📊

With your $2,500 real capital and 20:1 leverage, you can effectively control $50,000 in the market ($2,500 * 20). This allows you to take larger positions than you could with just your real capital alone. 💪

So, if you were to trade stocks with this leveraged amount, you could potentially buy shares worth $50,000 in the market. 📈

The statement emphasizes that while you have access to a larger pool of funds through leverage, your maximum potential loss is limited to the 5% of your funded account that represents your real capital, helping to manage risk while trading with leverage. ⚖️

🔥 TRADING TIPS

📈 MIND OVER MARKETS

MAKING A LIVING OFF VOLATILITY

Simply put, volatility is a measure of how much movement there will be in an underlying financial instrument irrespective of direction. Some professional traders believe it is a lot easier to forecast volatility 📉📈 - that is whether the market will be wild 🌪️ or calm 🌤️ - rather than the market direction itself and make their living doing just that 💼.

There is good reason to believe that volatility is more predictable than direction because human beings do not usually go from psychotic 😵 to placid 😌 over and over again. Since markets are nothing more than an expression of human behavior, markets tend to follow the normal path of our experience - infrequent moments of massive chaos and stress followed by generally much longer periods of calm and passivity 🧘. That’s why volatility charts tend to have a few huge spikes 📊 followed by long-lasting valleys 🏞️.

Volatility is generally quoted in annual percentage terms 📅. In order to make it useful, you need to turn it into a daily number by performing a square root formula that is much too complex and unnecessary 🔢. Fortunately, there is an easy shortcut called “the trader’s rule” which allows you to just divide the vol number by 16 to get the expected daily movement range. So for example, at 30 vol divided by 16, the instrument is expected to have a daily movement range of 1.87% ➗.

There are two types of volatility - implied and realized. Implied volatility is just a guesstimate of the future and, unless you are trading options, is of no value to directional day traders. As day traders, we want to know what the actual - the realized - volatility is. For example, if you have a day trading strategy that is doing well in a vol regime of 16 (1% movement per day) and now the market is showing realized volatility of 32 (2% movement per day), you can be sure as night follows day 🌙 that your trades will not survive the stops unless you widen them by as much as double (of course that means you need to stretch your take profits to 2X as well to keep the risks in balance ⚖️).

When it comes to volatility, there are three things that every day trader should know:

1. What is the realized market volatility now? 📊

2. What does that mean for the average daily move? 📉

3. How does that impact my stops and targets? 🎯

Answer those three questions every day and you will have far fewer trading surprises in your life 🎉.

🎓 PROP TRADING LINGO

What is Trailing Drawdown?

Every prop trading firm establishes its risk management rules from the outset, typically setting a maximum drawdown limit of around 5% to 6%. 📉 This initial drawdown figure is critical as it sets the threshold below which a trader’s active capital can not fall. In addition to this fixed drawdown, some prop firms implement a trailing drawdown mechanism, which is dynamically adjusted based on the trader’s performance. 🔄

Let's break it down with an example: Suppose you begin with an account balance of $50,000. With a 5% maximum drawdown, your risk threshold starts at $47,500, meaning you cannot afford the account to drop below this value without breaching the drawdown limit.

Imagine you successfully make $1,000 from a trade, boosting your account balance to $51,000. The trailing drawdown feature then recalibrates, setting a new drawdown limit of $48,500💹 It’s important to note that trailing drawdowns generally calculate based on live equity values rather than closed trades, reflecting the real-time risk as the market fluctuates.

A key feature of trailing drawdowns is their one-way movement: they always adjust upwards, never downwards. If at any point the trailing drawdown threshold is breached, all open trades will be automatically closed, and the trader will fail the prop firm's evaluation. ❌ 

📋 TOP PROP FIRMS FOR US TRADERS

1. Apex Trader Funding ATF (4.8 ❇️ Trustpilot)

2. Funded Trading Plus (4.8 ❇️ Trustpilot)

3. MyFundedFutures (4.8 ❇️ Trustpilot)

4. E8 Markets (4.7 ❇️ Trustpilot)

5. Maven Trading (4.6 ❇️ Trustpilot)
   

🔥 OUR PICK: HOW DID YOU PASS THE PROP?