BILLIONS
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BILLIONS
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How toBILLIONS
Pass
BILLIONS
a Trading
BILLIONS
Challenge
BILLIONS
in 2023BILLIONS
BILLIONS
BILLIONS
BILLIONS
BILLIONS
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BILLIONS
BILLIONS
BILLIONS
Everything you need to know about
proprietary trading challenges, how to
pass them and get funded.

2
1—Contents
Understanding Proprietary Trading Firms
3
Our Firm’s Operations
5
Unlocking Your Trading Potential with Billions Club
7
Mastering Our Challenge: Understanding the Rules
9
Key Ingredients to Conquer the Challenge
11
Why Do Many Traders Stumble?
14
The Anatomy of Grave Mistakes During a Challenge
18
Mastering the Art of Trading Journaling
22
Streamlining Your Trading Journal
31
Crafting Your Trading Plan
35
Formulating Your Trading Strategy
38
Backtesting
41
Risk Management and Essential Guidelines
44
Psychology
46
Five Pillars of Triumphing in the Funding Challenge
54
Closing Remarks
56
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Understanding Proprietary Trading Firms
1—Understanding
Proprietary Trading
Firms
Welcome to an exciting exploration of proprietary trading and
the many opportunities it offers. In this chapter, we will guide
you through the details of proprietary trading firms, explaining
their operations and highlighting the benefits our firm provides
for traders like yourself. Get ready to discover the untapped
potential of proprietary trading and how our firm can support
your trading journey.
Proprietary trading firms are unique entities that provide
capital to skilled traders who can consistently make profits
in the financial markets. Once you demonstrate your trading
abilities through our funding challenge, we will give you the
capital amount you chose and paid for. The fee you paid will be
refunded along with your first payout.
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Understanding Proprietary Trading Firms
If you succeed in the challenge, we will make it easy for you to
start earning real money with your funded account.
As a member of the Trading for Billions Club, you will keep 90%
of the profits you make during your live trading period. Among
the top 10 proprietary firms, only one other establishment offers such an attractive 90% profit split right from the beginning.
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Our Firm’s Operations
2—Our Firm’s
Operations
Successful proprietary firms excel in risk management and
effective capital allocation. Our firm prioritizes strict risk controls and employs advanced risk evaluation techniques. This
strategy not only protects the capital but also enables traders
to explore new opportunities and improve their returns. We
provide a secure and stable environment that allows traders to
focus on their trading goals.
Joining our proprietary firm comes with a range of benefits
that complement your trading journey. You will have access to
significant capital resources,
advanced trading platforms,
and robust support systems
designed to facilitate your
success. Our experienced
team provides mentorship
and guidance, assisting you
in honing your skills and
achieving your trading goals.
We foster a collaborative and
inclusive environment that
considers your success as a
collective triumph.
Our firm places a strong emphasis on mastering risk management and effective capital
allocation. We adhere to strict
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Our Firm’s Operations
risk controls and utilize advanced risk evaluation techniques.
This approach ensures the preservation of capital while allowing traders to explore new opportunities and maximize returns.
We provide a secure and stable environment that enables traders to focus on their trading goals.
We take pride in our high-quality education and the exceptional
value offered in our trading programs. When you purchase a
funding challenge, you will also gain access to our educational
section, which includes exclusive and confidential learning
resources. Additionally, you will have the opportunity to use
our automated journal, which diligently records all trades you
execute during the funding challenge or while actively trading
your funded account.
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Unlocking Your Trading Potential with Billions Club
3—Unlocking Your
Trading Potential with
Billions Club
Undoubtedly, we all embark on our trading journeys fueled by
similar dreams and ambitions. The enticing promise of autonomy, wealth, luxurious vacations, and the possibility of earning
millions from a sunny beach. This vision serves as a powerful
motivation as we take our first steps, but the reality of trading
is often more complex.
While trading can eventually deliver the desired lifestyle, it
requires a significant investment of time, effort, finances, and
sometimes even social interactions until consistent profitability
is achieved. Yet, once profitability is within our reach, the rewards are profoundly gratifying.
Trading stands out as one of the most lucrative endeavors for
several reasons. Firstly, it offers unparalleled independence.
Your outcomes are directly tied to your
actions, leaving no room for external
blame or credit. You can execute trades
from anywhere in the world, and hypothetically, if Mars had Wi-Fi, you could
even analyze charts from there. Another
perk is the absence of a superior regulating your every move. But there’s an
even greater advantage. In trading, once
you achieve profitability, you can swiftly
and effortlessly amplify your capital.
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Unlocking Your Trading Potential with Billions Club
8
Remember, with our guidance, a capital of $100,000 is just
$499 away. It is truly achievable. And at the Billions Club, we
have made this goal even more accessible. We have created an
academy specifically tailored for you, providing complimentary
pre-market analysis every Sunday and responding to all your
inquiries promptly.
Which other proprietary trading firm caters to your needs even
during weekends? Which other firm has staff members who
are so committed that they spend nights in the office to ensure
your questions are promptly addressed?
The doors of the Billions Club are always open, inviting you to
step in at any moment. But before you take the leap, immerse
yourself in this e-book, where we will provide you with the
precise blueprint to triumph over our challenge. Is there any
other proprietary trading firm that offers the same? You tell us.
Enjoy the reading journey;
these pages condense
years of expertise into just
70 concise pages. Read
through to the end, and you
will undoubtedly navigate
your upcoming challenge
with ease.
4.3%
Based on our data, an average full-time trader has a
monthly profit rate of 4.3%. With our 90% profit split,
that means taking home at least $2,150. And with our
Scaling Plan, the sky is the only limit.
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Mastering Our Challenge: Understanding the Rules
4—Mastering
Our Challenge:
Understanding the
Rules
In this chapter, our goal is to outline the regulations we have
established for our trading challenge and explain their underlying objectives. You may be curious about the feasibility of
successfully completing the challenge, and we firmly believe
that the 10% profit target is attainable.
Let’s imagine a situation where you risk 0.5% of your capital
on each trade. With such a risk parameter, you would need to
achieve a 1:20 risk-reward ratio (RRR) within 20 days to fulfill
the challenge. Essentially, this means achieving 1 RRR for every
trading day. If you’re trading cryptocurrencies, you are given
30 days to ace the challenge, requiring an average of approximately 0.66 RRR per day. Therefore, we genuinely believe in
the attainability of our challenge.
We understand if you’re apprehensive about running against the clock
until the final day of the challenge,
potentially needing to achieve
higher RRRs in a single day to wrap
up the challenge within, let’s say,
15 days. The scenario outlined
above was simply to provide insight
into how the challenge can be
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Mastering Our Challenge: Understanding the Rules
completed and to demonstrate our reasoning behind crafting
these rules.
However, reality rarely follows such a linear progression. As
you’re likely aware, financial markets are unpredictable, making
it unlikely that you would consistently achieve a 1 RRR daily for
20 days. On the contrary, you might sail through the challenge
in as few as 5 days during a particularly favorable week. The
timeline to conquer the challenge is subject to fluctuation due
to a multitude of factors impacting your trading performance.
The timeframe needed to complete the challenge hinges on:
• Market conditions during the period of your challenge.
• The success rate of your trading strategy.
• Your average RRR.
• Your risk exposure per trade.
As evident, it’s impractical to predict the precise duration
needed to master the challenge, but it is unequivocally achievable.
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Key Ingredients to Conquer the Challenge
5—Key Ingredients
to Conquer the
Challenge
What elements are crucial for succeeding in the challenge? The
critical, most important factor is definitely discipline. Without
discipline, even experienced traders would struggle in the
challenge. You need to have discipline right from the start,
from the moment you make your first trade.
Another important factor is patience. When you start rushing
during the challenge, you put your account at risk.
Surprisingly, having a slightly detached
approach can help you see the market more
objectively. It’s highly advantageous to only
risk the challenge fee, an amount that you
can afford without causing any major disruptions in your life. This change in mindset
allows you to view the markets from a fresh
perspective and make more rational decisions.
Your emotional state before starting the challenge is very
important. It is necessary for you to feel balanced and content
in your personal life in order to succeed in overcoming the
challenge. Otherwise, if you are not in a good emotional state,
difficult trading days may make your emotions worse, making
the challenge almost impossible to overcome.
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Key Ingredients to Conquer the Challenge
Before you begin the challenge, there are certain things that
are necessary. These include having trading experience and
specific elements such as:
• Having a clear trading plan
• Having a defined trading strategy
• Having a comprehensive approach to managing risks
The good news is that this ebook will help you develop all
these important aspects of your trading performance. So, let’s
get started!
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Keep in mind
“The moment you
begin to rush during the
challenge, your account
stands at risk.”
Why Do Many Traders Stumble?
6—Why Do Many
Traders Stumble?
Lack of Preparedness
The main reason, and the most important one, is a lack of preparedness. Many traders jump into a challenge without proper
preparation. They don’t have the necessary mental, technical,
and financial readiness.
If they struggle with self-control in their personal lives, how
can they expect to exercise restraint while taking on a funding
challenge? If they fail to generate profits during backtesting,
what makes them believe they will be successful in the challenge?
If they are dealing with financial difficulties and struggling to
meet their basic needs, attempting a 100k challenge solely
based on hope shows a lack of maturity. This clearly indicates
that they are unlikely to overcome the challenge.
Nervousness
Another important factor that affects traders during a challenge is nervousness. There is no magical solution to staying
calm while trading because it is inherently a stressful environment. The only way to combat nervousness is through your
trading experience, nothing more.
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Why Do Many Traders Stumble?
Having a well-defined and thoroughly tested trading plan also
helps address this issue. Knowing that you have a trading plan
that has proven successful during backtesting or demo trading brings a sense of
calm to the challenge.
It is crucial to recognize that the fear of
losses in trading is similar to the fear of
death. Both are inevitable, and fearing
something that is inevitable is pointless.
Just as death cannot be avoided, losses
in trading are also unavoidable. Therefore,
embracing losses as an integral part of
the trading process is crucial and prevents fear from dictating
your decisions.
Excessive Risk Exposure
Your level of risk exposure has a significant impact on your
trading. If you take on excessive risk, it can deter you from pursuing high-quality trades due to fear. On the other hand, if your
risk exposure is too minimal, such as 0.1%, even exceptional
performance may not be enough to successfully complete the
challenge.
The key is to identify the optimal level of risk exposure that
allows for stress-free entry into all quality trades while also
helping you reach your profit target.
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Why Do Many Traders Stumble?
Negative Emotions
This aspect is extremely important and deserves your attention. Emotions and psychology play a significant role, accounting for 90% of your trading performance. Greed, fear, and
impatience have the power to undermine your challenge in a
matter of minutes.
Hasty Approach
This is a common issue. Many traders enter the challenge with
the mindset of wanting to conquer it as quickly as possible,
ideally within 5 days, so they don’t stress themselves in the
following weeks.
However, this line of thinking leads to one thing: haste. Acting
hastily leads to poor trading decisions, and poor decisions can
result in blowing your trading account.
Instead, your approach to the trading challenge should prioritize consistency. This means avoiding excessive risks per
trade and utilizing the entire time period of your challenge. This
strategy is the key to sound trading.
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Key learning
“Your approach to
the trading challenge
should prioritize
consistency”
The Anatomy of Grave Mistakes During a Challenge
7—The Anatomy of
Grave Mistakes During
a Challenge
Let’s explore some of the most significant mistakes through a
real-world example of one of our traders at the Billions Club
and his first trading challenge. Let’s begin!
The trader embarked on his challenge during a turbulent period
in his life. He had a heavy debt burden and only enough savings to sustain himself for about three months. Despite being
in a precarious financial state and not being profitable even on
his demo account, he decided to quit his job and dive into the
trading challenge.
To make matters worse, he was also going through a painful
breakup, leaving him emotionally vulnerable. It was the worst
possible environment for a beginner trader. Nevertheless, he
started the challenge with a 1% risk exposure per trade, an
amount that generated significant fear every time a trading
opportunity arose.
Miraculously, he managed to clear Phase 1 through three successful trades, and euphoria swept over him—an alarmingly
dangerous state of mind for any trader. Without hesitation, he
dove headfirst into Phase 2, thinking, “What could possibly go
wrong? I’m invincible.” However, the reality of Phase 2 swiftly
delivered a blow to his confidence.
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The Anatomy of Grave Mistakes During a Challenge
He started the challenge in a state
of euphoria but quickly suffered
two losses that went against his
trading plan. It was a rocky start. He
then engaged in revenge trading,
resulting in three additional losses
that made no sense, leaving him with
a 5% deficit. During this downward
spiral, he abandoned his trading plan
and traded haphazardly, believing
that his plan wasn’t working. However, how could it work if he wasn’t
adhering to its conditions?
As expected, he ended up blowing the challenge. He was left
devastated, having risked everything on the success of the
challenge. It was an invaluable lesson learned. This setback
served as the catalyst for him to improve, rectify his mistakes,
and mature into a seasoned trader.
By examining this real-world example of the pitfalls and errors
a trader can make during the Funding Challenge, it becomes
clear how crucial mental, emotional, and financial readiness
are, as well as adhering to a sound trading plan. But fear not,
this isn’t the end of the road. From here on, we will guide you
on the correct path.
In the forthcoming sections of this ebook, our primary focus
will be on the constructive lessons derived from this example.
Instead of dwelling on the errors, our aim is to illuminate the
path of effective trading strategies and practices. We will guide
you on a journey of understanding and mastery, demonstrating
the right approach and mindset required to triumph in the
Funding Challenge.
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The Anatomy of Grave Mistakes During a Challenge
We will now explore the intricacies of strategic planning, risk
management, emotional control, and most importantly, adhering to your trading plan. Our goal by the end of this journey is
to provide you with the necessary knowledge and confidence
to navigate the challenging aspects of the trading challenge.
We aim to help you turn potential pitfalls into stepping stones
for success.
So let’s embark on this enlightening journey towards successful
trading together. Remember, every setback can be an opportunity for a great comeback if you learn from it. Let’s embrace
those lessons and move forward with confidence.
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Always stick to your plan
“It’s clear to see the
importance of mental,
emotional, and financial
readiness, as well as
adherence to a sound
trading plan.”
Mastering the Art of Trading Journaling
8—Mastering the Art
of Trading Journaling
What Exactly is Trading Journaling and How
Do You Go About it?
Trading journaling may be a new concept for some of you. Simply put, it involves keeping a record of your trading activities,
either on paper or using a digital application. This record can
include details about your daily trading experiences, emotions,
accomplishments, or even interviews with fellow traders.
For many traders on the Billions Club team, including the one
whose journey we are following, journaling has been a crucial
step towards success. We firmly believe that without journaling, no trader worldwide could successfully navigate the complexities of the funding challenge. Let’s explore the reasons
behind this belief.
Have you ever wondered how people coped with their first
heartbreak? They did it through journaling. By expressing
their feelings and emotions during that
time, they not only managed to release
their emotions but also gained valuable
insights to improve their mental well-being. Reviewing these journal entries
allowed them to identify which events
or situations were having a positive or
negative impact on their lives.
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Mastering the Art of Trading Journaling
Ultimately, releasing negative emotions through journaling
is the first step towards maintaining composure during live
trading sessions and remaining objective during a funding
challenge.
Applying Journaling to Trading
Journaling can be implemented in your trading routine in two
distinct ways: noting your emotions during live trading and
documenting the technical aspects of your trades. Let’s begin
with emotions.
Just as you would record your feelings in your everyday life,
you will be doing the same while live trading. You will need to
answer questions such as:
Did I adhere to my trading plan when executing this trade?
What emotions did I experience when initiating the trade? Was
fear a factor? If so, why? Did I fear due to the risk exposure per
trade I had taken on? Or was my fear due to a lack of faith in
my trading plan?
Why did I close the trade before it hit my target profit? Did
fear that the trade might not reach my target profit and reverse
direction, hitting my stop loss or break-even point instead,
drive me to do so? Was greed compelling me to secure at least
some profit? What were the underlying emotions at play?
Why did I hesitate to enter a profitable trade after suffering
three consecutive losses, despite it meeting all the criteria of
a good trade? Was I scared of another loss? If so, what was
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Mastering the Art of Trading Journaling
the root cause of this fear? Do I trust in my trading strategy
and plan?
Here’s how these entries could
potentially look:
“I had three losses according to my trading plan and I became
furious. It was a dreadful day.”
“I secured a profit and was overjoyed. Consequently, I executed two irrational trades that resulted in losses...”
By expressing your emotions through writing, you achieve two
key things: You release your emotions, and you amass data
about how your emotions affect your decision-making during
live trading sessions.
After a month of journaling, you
will have a rich compilation of data
to review. Suppose, upon inspection of your journal, you discover
that your most significant losses
occur immediately after your
biggest wins. You have completed
the process of journaling, now
it’s time to evaluate your mental
patterns.
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Mastering the Art of Trading Journaling
Decoding Reflection in Trading
As we delve deeper into the art of trading, we arrive at a common conundrum most traders face - heavy losses following
substantial victories. This scenario might sound familiar to
many. Now, while there isn’t a universal remedy we can prescribe, the solution resides within your thought process, which
we aim to help you navigate.
The first step is introspection, asking yourself some
pivotal questions. Why do
these significant losses
shadow my major wins? Do
I become overly exuberant
after a win? Does greed
cloud my judgment? How do
I feel post a notable victory?
Can I remain impartial while
analyzing charts after significant wins? Am I disciplined
enough to stick to my trading
plan even after a streak of successful trades? Should I continue trading post a major win, or should I step away? Should I
maintain the same risk exposure for the next trade or adjust it
considering a higher probability of a loss?
Once you begin this self-interrogation, revisit your journal
entries to look for answers from your past emotional states.
Gradually, this process should aid in identifying the root cause
of the issue, subsequently informing the resolution.
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Mastering the Art of Trading Journaling
Sharing Our Experience
As fellow traders of the Billions Club, we have grappled with
similar challenges. Allow us to share the solutions we discovered through our journey.
Our solutions sprouted from a comprehensive review of our
trading journals. We noticed a pattern wherein days of profiting were frequently marred by substantial losses, often from
trades not meeting our trading plan’s criteria. This recurring
anomaly signaled a flaw in our trading process that we were
determined to address.
The first question that came to mind was, ‘Why can’t we trade
in accordance with our plan? Is it greed?’ The candid answer
was yes. So, the next inquiry was, ‘How do we tackle this? Can
we simply switch off our greed?’ The hard truth is no, as greed
is an intrinsic part of human behavior. However, we can control
it to limit its impact on our trading. But how? One possible solution could be reducing the risk on subsequent trades for the
day to curtail potential losses. Or, we could decide to cease
trading for the day.
With this, we managed to overcome our predicament. A series
of introspective questions led us to introduce a critical clause
into our trading plans. We acknowledged our susceptibility to
greed, a universal human trait. Instead of battling it, we decided to manage it either by taking a break from trading for the
day or reducing our risk exposure.
This experience emphasizes the importance of a structured
trading plan. A simple annotation of our emotional state
enabled us to devise a key condition that could potentially
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Mastering the Art of Trading Journaling
facilitate success in our trading journey, and it has done so
numerous times.
Beyond Emotional Entries: Technical Notes
But trading journals extend beyond emotional annotations.
They also serve as a platform to record your backtesting performance and live trading performance. Here you can detail
technical aspects such as:
The specific conditions from your trading plan that were satisfied, prompting a particular trade.
The specific entry pattern from your trading plan that appeared, leading to the entry in a particular scenario.
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Mastering the Art of Trading Journaling
Your personal interpretation of the market situation, overall
outlook, and reasons for profit or loss from a technical standpoint.
These technical annotations are essential, especially when you
compile data for statistical analysis to determine the profitability of your trading strategy.
It’s important to record not only your backtesting but also live
trading performance. Some trading plans might yield excellent
results in backtesting but falter during live trading. For instance, you may have a strategy based on entering when a 1M
bullish or bearish engulfing appears in a target area.
While backtesting, you might find this strategy quite successful
due to ample time for market analysis. But during live trading,
stress, and pressure might hamper your ability to analyze entry
conditions, leading to missed opportunities and unplanned
trades. Consequently, a strategy that yields a 50% win rate
during backtesting might only produce a 25% win rate during
live trading.
This discrepancy is crucial because backtesting and live trading are distinct disciplines. A trading plan might excel during
backtesting, boasting a 50% win rate, but live trading might
only yield a 30% win rate when emotions come into play.
Herein lies the importance of recording your trades: to highlight and address such disparities.
After documenting all your live trades in your journal, you now
have a practical tool for comparison with your backtesting
trades. This practice enables you to evaluate the efficacy of
your trading plan under real-world pressures. Consequently, it
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Mastering the Art of Trading Journaling
also presents the opportunity to tweak certain elements within
your trading strategy to optimize its performance, boosting
your prospects of success in forthcoming challenges
Remember, the volume of trades recorded in your journal correlates with the reliability of your data, enhancing the precision
of your analysis. This enriched data provides you a solid foundation to fine-tune and genuinely elevate your future trading
strategy.”
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Learn from your past trades
“Journaling enables
you to evaluate the
efficacy of your trading
plan under real-world
pressures.”
Streamlining Your Trading Journal
9—Streamlining Your
Trading Journal
As time progresses, you might discover that maintaining a daily
journal is not exactly the most exciting task. As traders at Billions Club, we’ve experienced this first-hand and have endeavored to provide a solution: An automated trading journal.
This tool is part of our Professional Dashboard, offered as a
bonus when you invest in our funding challenge. Throughout
your challenge journey, the journal will diligently document all
your trades, capturing vital data associated with them. This
section will guide you through its myriad capabilities.
Primarily, it keeps a meticulous record of all your trades, allowing you to monitor the number of trades executed during the
challenge. Additionally, you can effortlessly review the total
profit or loss sustained over the course of the challenge period.
A pivotal element of the journal is the Risk-Reward Ratio
(RRR) segment. Here, you can
evaluate the profit potential of
each trade and gather insights
into the average cost of a losing trade.
Determining the RRR is a crucial aspect. By dividing your
average profit from winning
trades by the average loss from
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Streamlining Your Trading Journal
losing trades, you can ascertain your RRR. Why is this detail so
crucial?
Without awareness of your average RRR, it’s challenging to
gauge if your strategy is indeed profitable. To discern the
effectiveness of your trading plan and strategy, two vital
elements must be determined: your average RRR and your
average win rate.
The win rate is the second critical factor for assessing your
trading profitability. It’s a simple calculation where you quantify
all your trades and express the proportion of successful trades.
Our automated trading journal conveniently undertakes this
task for you.
A key principle to keep in mind is that a higher win rate often
corresponds to a smaller RRR, while a higher RRR typically
indicates a lower win rate.
Then, we reach the most crucial question: Is my trading strategy genuinely profitable? Fortunately, there’s a straightforward
table that provides the answer. To determine your profitability,
you only require two pieces of data: your win rate and your
average RRR.
In a nutshell, here’s what you should diligently
record in your journal
• The result of each individual trade.
• The conditions from your trading plan that influenced your
decision to enter the trade.
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Streamlining Your Trading Journal
• Supplementary data from the trade: These may be factors
not currently incorporated into your trading plan but are
deemed significant and warrant assessment of their performance and success rate.
• Your personal observations about the trade.
Making Statistics Work For You
While journaling can significantly enhance your trading journey,
it isn’t wholly sufficient on its own. To maximize its positive
impact, you need to create a statistic based on it.
You can generate statistics from virtually every element recorded in your journal. Here are some examples. To summarize,
here are the primary statistical facets you should concentrate
on:
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Streamlining Your Trading Journal
• Identify the days of the week when your trading plan yields
the best results.
• Examine the confluences that lead to a higher win rate when
entering trades, as well as those that correspond to a lower
win rate.
• Evaluate the efficacy of different entry patterns and identify
which ones produce the best outcomes. Also, recognize
entry patterns that should be avoided.
• Ascertain the currency pair(s) that provide the highest potential win rate or Risk-Reward Ratio (RRR).
• Assess the influence of various timeframes on your trading
plan’s effectiveness.
• Compare the win rate between trades initiated based on
5-minute (5M) entry patterns and 1-minute (1M) patterns to
identify any variances.
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Crafting Your Trading Plan
10—Crafting Your
Trading Plan
A trading plan can be described in various ways, but for the
purpose of our guide, we’ll define a trading plan as a technical
blueprint that directs your actions during live trading or backtesting. It usually consists of elements such as:
• Confluences that must be met before initiating a trade
• Entry patterns that inform your trade entries
• Positioning of stop loss
• Placement of take profit
• Determination of risk exposure
These components form the heart of your trading plan. Prior to
undertaking the challenge, you need to thoroughly outline the
specifics of your trading
plan. Without a comprehensive understanding of
this plan, it’s impossible to
instill a sense of structure
into your trading actions.
Without carefully delineated conditions steering
your trading decisions,
you can’t accurately
determine if your trading
is objectively guided or if
it’s swayed by emotional
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Crafting Your Trading Plan
influences. Absent a trading plan, your actions become arbitrary, reducing trading to mere gambling.
Consequently, before we delve into the particulars of the
challenge, we’ll guide you in formulating a robust trading plan.
Based on our experience, simplicity is paramount when crafting
a trading plan. Let’s develop some fundamental conditions
together.
Enumerating the Conditions
Objective Stop Loss (SL) Position: Integrate a condition into
your trading plan that establishes an objective rule for placing
the SL. For instance, regardless of the market’s volatility, formulate an objective placement for your SL, such as a daily low,
high, or MA50, which has demonstrated effectiveness during
backtesting, and stick to it without making subsequent adjustments.
Objective Take Profit (TP) Position: Analogous to the SL,
apply the same principle to your TP. Incorporate a condition in
your trading plan that unambiguously specifies the placement
of your TP, ensuring you refrain from subsequent modifications.
3-5 Conditions for Trade Entry: These are the prerequisites
that must be met before you can enter a trade. Some examples
of such conditions might include:
Upward crossover of the 50-day Moving Average (MA50):
Signals a tendency towards long trades.
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Crafting Your Trading Plan
Price trading below the daily low: Indicates a bias for short
trades.
Bullish or Bearish Outside Bar (BOS) pattern on a 5-minute
timeframe: Used as a signal to spot an entry pattern.
Presence of a Bearish Engulfing or Bullish Engulfing pattern:
Entry patterns for short and long trades respectively, given the
presence of a preceding 5-minute BOS pattern.
Risk Management: Before initiating the challenge, set clear
risk management guidelines. It’s advisable to keep the risk
exposure uniform for each trade. If you expect a higher probability of losses following a winning trade, introduce a rule to
diminish your risk exposure for one or two subsequent trades
post a winning one.
Break-Even (BE) Rule: It could be useful to analyze your backtested trades. You may notice that some trades initially move in
your favor but eventually reverse, causing a stop loss. In such
instances, it’s beneficial to pinpoint an advantageous Risk-Reward Ratio (RRR) where your trades commonly revert before
reversing. When your trade hits this RRR, adjust your position
to break-even (BE) to avoid unnecessary stop loss.
After you have compiled a list of conditions like these, you can proceed to
backtest them to assess their performance during backtesting. We’ll guide
you through the proper backtesting
process in the subsequent sections of
this book.
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Formulating Your Trading Strategy
11—Formulating Your
Trading Strategy
With a trading plan in place and an understanding of the importance of journaling, it’s now time to compile a guide that will
help you craft a comprehensive trading strategy. This strategy
will be key in achieving profitable trans and paging the fading
challenge. Let’s dive in!
You’ve already learned how to design a trading plan focused on
the technical aspects of trading in financial markets. Now, we’ll
shift our attention to other important components of trading,
including psychology and practical matters such as risk management. Let’s begin with risk management.
Risk Management
In this section, your journal entries should serve as a mirror,
reflecting your personal rules for trading. These could include:
‘If I achieve two consecutive profits, I refrain from trading for
the remainder of the day,’ or ‘After three successive losses, I
stop trading for the day.’ You might also decide to lower your
risk exposure after two wins or increase it following two losses.
And so forth.
Risk management also entails defining the size of your maximum or fixed risk exposure per trade. However, determining
this can be a challenging task. The only viable way to set these
parameters is by testing them during your funding challenge
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Risk management is key
“Trading isn’t an easy game.
It requires knowledge,
discipline and resources.
Only the most dedicated
traders will succeed.”
Formulating Your Trading Strategy
and documenting your feelings in your journal. As a starting
point, we suggest a 0.5% risk exposure per trade.
Psychology
In addition, it’s essential to include some psychological guidelines in your trading strategy. Adhering to these rules will help
you successfully navigate your funding challenge and manage
live trading on your funded account. For instance:
• If you find yourself overtrading, you could set a strict fourhour trading session, after which you refrain from making
any additional trades.
• If you find yourself on an emotional rollercoaster after scoring profits on your live funded account, you might decide to
withdraw a portion of your profits and continue trading with
the remainder, while ensuring that your risk exposure stays
the same or reduces. This method can help you manage
your emotions effectively, allowing you to maintain a balanced trading approach.
• If you notice that you tend
to make unnecessary
errors after three consecutive losses in a single trading day, you may decide to
halt your trading activities
for the rest of the day.
This preventive measure
can help you avoid further
losses and preserve the
integrity of your trading
strategy.
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Backtesting
12—Backtesting
The components we’ve discussed thus far form the foundational elements of your trading strategy before you embark on
any trading challenge. This strategy, along with your trading
plan, serve as a reliable guide, instilling confidence when you
trade live under stressful conditions. They represent a triedand-tested approach, a strategy you have validated through
extensive backtesting and the proven profitability of which you
have witnessed.
Nonetheless, it is vital that you do not start the challenge
without a trading plan that has demonstrated its effectiveness
through backtesting. In this chapter, we’ll guide you through
the process of backtesting effectively.
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Backtesting
To begin with, it’s imperative to clearly establish the conditions
of your trading plan before you start backtesting. Next, it’s
essential to document every trade you make during the backtesting phase in order to gain the most accurate insight into
the performance of your trading strategy.
Do not ignore or gloss over your losing setups—this is a pitfall
some traders fall into and it’s one of the worst mistakes you
can make.
The actual process of backtesting follows. While platforms like
Tradingview or FX Replay can be used for backtesting, we recommend FX Replay as it allows you to virtually execute trades
similar to how you would on a demo or live account. Although it
may seem like a mere novelty, it’s a powerful feature that adds
an extra layer of realism and pressure.
The backtesting process itself is straightforward: you enter
trades in accordance with the conditions stipulated in your
trading plan, set take profits as per your trading plan, adjust
trades to break-even, and close them either in profit or at a
loss.
After each trade, each day of backtesting, or each week of
backtesting, you journal your findings. You should record the
outcome of the trade, the confluences that led to your entry,
and the entry pattern you used for that particular trade.
However, there’s an additional element that we have not yet
discussed: your personal opinion. During backtesting, you
should always examine the market from a perspective broader
than simply whether it met your trading plan conditions or not.
You should always note your thoughts on why you believe you
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Backtesting
lost or won. This practice helps you create what we call ‘market
logic,’ a skill that will prove beneficial in the future.
This process helps you cultivate a unique perspective that will
improve your win rate over time. Because trading is not just
about a mechanical approach based on taking trades that meet
your conditions. It also hinges on how each trader perceives
the market from their personal standpoint—this is the quality
that separates good traders from the best.
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Risk Management and Essential Guidelines
13—Risk Management
and Essential
Guidelines
In this chapter, we’re going to share some invaluable rules that
have served us well in successfully navigating various challenges. The first rule we’d like to underscore is the significance
of proper risk management. Grounded in our personal experience (although it might not universally apply), we’ve found
a risk management method that keeps us entirely composed
during funding challenges.
Once you’ve meticulously backtested your trading plan and
accumulated data from a multitude of trades, you’re in a position to identify the maximum losing streak you might face
while trading live. If you haven’t done so already, it’s crucial to
gather statistics related to this specific aspect. Once you’re
aware of the exact length of your longest losing streak, double
it. Subsequently, carefully choose your risk exposure, ensuring
it’s within a limit that allows you to weather such a scenario
without draining your account.
Another vital rule is resisting the urge to incessantly modify
your trading plan each time you encounter a losing streak. This
is a frequent problem many traders grapple with. They experience a losing streak and promptly begin doubting the efficacy
of their trading plan, feeling compelled to make amendments.
However, the issue generally lies elsewhere, often within the
sphere of psychology. You should only consider changing your
trading plan if, after a considerable number of trades (around
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Risk Management and Essential Guidelines
50, for instance), you persistently find that it’s not generating
profitable outcomes.”
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Psychology
14—Psychology
Tackling Emotions
At the heart of our discussion is the formidable challenge that
turns profitable trading in a live environment into a strenuous
task: emotions.
Emotions suddenly rear their head at every step of the trading
process—from scouting
for trades and analyzing
the market to opening
and closing positions.
They heavily influence
every decision you make,
typically to your detriment.
You might be pondering
how to dodge them, but
regretfully, it’s impossible.
Instead, you must learn to
deftly manage and navigate them.
The initial step in effectively tackling emotions while trading
is to gain an in-depth understanding of each emotion. Let’s
begin with greed, which is perceived as the most detrimental
emotion to experience while trading. It’s natural to harbor a
desire to earn money, but greed can provoke damaging actions. Greed might drive you to shift your stop loss further into
negative territory, hoping for a market turnaround in your favor.
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Psychology
Similarly, it can also allure you to shift your take profit further
into positive territory.
These actions are prevalent among emotional traders and
are fundamentally erroneous. To counteract greed, I propose
a straightforward technique. Incorporate a condition in your
trading plan that definitively states where you will position your
stop loss and take profit, and then backtest it. For instance,
you could impose a rule to invariably place your stop loss at
the 20-period moving average (MA20) or at the previous day’s
high/low. Designate an objective condition for both the stop
loss and take profit levels.
Once you’ve set these conditions, the task becomes uncomplicated: persistently adhere to the conditions outlined in your
trading plan, regardless of the circumstances. This strategy
will assist you in surmounting greed. While it may be alluring to
attempt to complete your funding challenge in a single trade or
evade the stress of trading for 20 days, it’s vital to remember
that consistency is the linchpin to successfully conquering the
challenge and trading your live account profitably.
Navigating Fear
Another prevalent emotion in trading is fear. Fear can considerably dent your profitability as it might deter you from capitalizing on high-quality setups following a few losses or dissuade
you from entering another profitable trade after a winning
streak. Overcoming fear is not a simple task, and total avoidance may not even be feasible. However, there are strategies
you can leverage to curtail fear.
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Psychology
One effective method to mitigate fear is through positive
experiences. This can be accomplished by securing profitable
trades during live trading and consistently backtesting your
trading plan. Cultivating a record of successful trades and
having faith that a winning streak will succeed a losing streak
when you adhere to your trading plan can help alleviate fear.
Moreover, your trading plan itself can help confront the fear of
losses. When you possess a well-defined trading plan that you
trust, it offers a sense of security and minimizes fear. Knowing
that your plan has undergone thorough testing and boasts a
positive expectancy can instill you with the confidence to execute trades without being excessively swayed by fear.
While it may not be feasible to completely eradicate emotions
such as greed and fear from your trading journey, by comprehending them and implementing strategies to manage them,
you can significantly enhance your trading performance.
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Psychology
Managing Overtrading
Another common issue encountered during the funding challenge involves two interconnected problems: hastiness and
overtrading.
We’re all acquainted with this sensation. You aspire to complete the challenge as rapidly as possible, ideally with just one
trade, so you can bypass fretting about the outcome for the
next 20 days.
Frankly, this strategy seldom works, and it’s more likely that
this approach, coupled with risking too much on a single trade,
will swiftly deplete your funding challenge. Even if you were to
conquer the challenge with just one trade, it would bear a closer resemblance to gambling than actual trading, and you would
probably squander your live trading capital in short order.
Instead, it’s recommended to approach your trading challenge
with consistency and aim to trade throughout the entire 20day period. This is the only method to trade responsibly and
evade overtrading, which is another significant problem during
the challenge.
Overtrading involves spending an inordinate amount of time
each day in front of the screen, leading to poor decision-making and severe burnout. You may find yourself devoting
significant hours to analyzing charts daily, yet not achieving
the desired results. These two factors contribute to a sense of
deprivation that can greatly impact your performance during
the challenge.
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Psychology
Guidelines for Maintaining Emotional
Stability
The worst thing you can do is resign from your job to undertake the challenge. This approach never works for a simple
reason: it places double the pressure on you. Not only do you
face the possibility of failing the challenge, but you’ve also
already quit your job, meaning if you don’t secure the trading
capital, you’ll have no other source of income.
To ensure you don’t place excessive pressure on yourself, it’s
important to avoid the following when embarking on a funding
challenge with a trading prop firm:
Refrain from publicly announcing
your challenge—keep it private
and avoid broadcasting it everywhere.
Avoid resigning from your job before commencing the challenge.
Social Life As a Trader
Another crucial aspect to consider is the impact on your social
life and emotional well-being.
When you start taking your trading career seriously, you’ll
notice significant changes in your surroundings. Many friends
may drift away as your character evolves, and you might even
experience a disconnection that could culminate in the end of
a romantic relationship.
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Psychology
This is a common experience for approximately 90% of traders
after they commence trading, and it’s not an easy hurdle to
overcome. However, there are a few strategies that can simplify it:
• Seek out a community of fellow traders and forge connections with them. Having a support network of like-minded
individuals can offer invaluable understanding and encouragement.
• Consider incorporating regular exercise by joining a gym.
We think it is a great opportunity to meet driven individuals
there who share similar ambitions and it can lead to positive
connections.
• Once you’ve successfully addressed these fundamental
aspects, you’ll likely encounter the typical challenges that
every trader faces. In the following sections, we will delve
into specific situations and explore effective strategies for
managing them.
Handling a Losing
Streak
In handling a losing streak
during a trading challenge with
a funding prop firm, it’s vital to
adhere to these guidelines:
Acknowledge That a Losing
Streak Is Inevitable: Regardless
of your trading prowess or the
high win rate of your strategy,
you will inevitably experience
periods of consecutive losses.
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Psychology
It’s crucial to accept this reality, and I apologize for being the
bearer of bad news, but it’s natural to feel dejected during such
times. However, there’s an effective approach: diminishing the
impact of your emotions.
Decrease Risk Per Trade: When you adjust your risk per trade
from 0.5% to 0.1%, your trading experience will undergo a significant transformation. Always remember that trading should
be approached objectively and without substantial emotional
attachment. Consider which scenario is more likely to foster
an objective state of mind: risking a significant portion of your
trading account or risking a smaller fraction? I believe you
know the answer.
The true secret to accumulating substantial profits lies in having a larger account while risking only a small fraction of your
trading capital. Many successful traders follow this approach.
Using a high-risk strategy where you risk, for instance, 3%
per trade is more of a deviation from the norm than a reliable
source of income.
Transform Your Trading Journal Into Statistics: While this may
seem like a straightforward step, it can be easily overlooked
by your mind. Trust me, once you have conducted numerous
trades during your backtesting phase and diligently journaled
them, you will gain invaluable insights into how your strategy is
likely to perform in live trading.
Your primary objective then becomes faithfully adhering to
your trading plan during live trading. While this may seem
simple, it’s actually more challenging than it appears. You’ll find
yourself contemplating the quality of your trading plan particularly during a losing streak. To help ease your mind, I have a
simple yet effective suggestion.
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Psychology
After journaling all your backtested trades, transform the data
into meaningful statistics and keep them visible next to your
PC while engaged in live trading. Doing so ensures that when
negative emotions start to arise, you’ll have those statistics
right there, reminding you that you’ve been profitable when
trading according to your plan. This visual reminder will significantly aid you in adhering to your plan with ease.
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Five Pillars of Triumphing in the Funding Challenge
15—Five Pillars of
Triumphing in the
Funding Challenge
Picking the Suitable Capital Sum
It is paramount to commence your challenge with a sum of
money that won’t disrupt your lifestyle if lost. Only put on the
line what you are comfortable parting with, without significant
repercussions. This approach encourages a relaxed disposition
and promotes clear-headed decision-making—key attributes
for success in the challenge.
Embarking on the Challenge Only When
Fully Prepared
Before you set foot in the arena of the challenge, ensure that
you are completely ready, both mentally and financially, and
that you have the necessary technical knowledge. Rigorously
backtest your trading plan, gather statistical evidence, and
ensure your personal life is stable. Only then should you consider stepping into the challenge.
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Five Pillars of Triumphing in the Funding Challenge
Managing Risk Appropriately
Whether you adopt our recommended rule or have crafted your
own, adherence to it in defining your risk exposure is crucial.
Avoid extremes—risking either too much or too little—on a
single trade.
Steer Clear of Impulsive Choices
Resist the temptation to clear the challenge in a single trade.
Instead, employ sound risk management principles and tackle
the challenge consistently and patiently.
Stay Committed to Your
Trading Plan
Your trading plan is your compass—regardless of the turns and
twists, always stick to it. This plan
will provide you with the necessary
guidance and bolster your confidence during your trading journey.
If you conscientiously adhere to
these principles, you’ll bolster your
chances of successfully completing the challenge and realizing
your trading ambitions. Remember, discipline, adaptability,
and focus are the watchwords throughout this process. Best
of luck!
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Closing Remarks
16—Closing Remarks
As we draw our e-book, “How to Triumph in the Funding Challenge,” to a close, we express our profound appreciation for
your companionship on this insightful journey. We sincerely
hope that the strategies and advice imparted here will serve
you well as you undertake the enthralling Billions Challenge.
Keep in mind, the road to success in the realm of proprietary
trading demands discipline, proficient risk management, and an
intimate comprehension of your trading plan. By integrating the
key principles outlined in this e-book, you’ll be well-equipped
to navigate the challenges with confidence and accuracy.
Never overlook the importance of meticulously backtesting
your trading plan, scrutinizing the data, and making data-driven decisions. Concentrate on managing risk effectively, maintaining a risk exposure that protects your capital yet provides
room for potential growth.
Importantly, refrain from impulsive modifications to your
trading plan during tumultuous periods. Focus instead
on identifying and addressing
any psychological aspects
that may be impacting your
trading performance. Adjustments to your plan should
only be contemplated if a
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Closing Remarks
significant trade sample consistently signals a need for modification.
As you embark on this thrilling funding challenge and journey
towards your aspirations in proprietary trading, we extend
our sincerest well wishes. May your diligence, understanding,
and tenacity guide you to surmount the Billions Challenge and
achieve unparalleled success in your trading career.
Once again, our deepest thanks, and may you always find
fortune in the fluctuations of the markets!
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Get capital, education, and 90%
profit split. For everyone, since day
one. We cover the losses
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