How to Choose a Challenge for Your Style

1Scalping

A position may be held for a few minutes or even seconds. Because of the large number of trades, trading costs and execution quality are especially important for a scalper. What to check?

The more often you trade, the more the spread affects the final result.

For a scalper, the following are especially important:

Spreads✓ Commissions✓ Execution✓ Trading platform✓ Strategy restrictions✓ Automation rules

The more trades your strategy makes, the more trading costs matter.

2Day trading: Intraday

For example:

In the morning the trader opened a EUR/USD position and closed it in the evening. The position isn't carried over to the next trading day. For such a trader, the Daily Drawdown is especially important — the daily drawdown limit we covered in the previous lesson. Why? Imagine your system allows several losing trades in a row.

If you keep trading after each loss, the total daily drawdown gradually approaches the Daily Drawdown. So you need to understand:

• •how many trades you usually make per day;
• •what risk you use per trade;
• •what losing streak your system allows;
• •how the Daily Drawdown is calculated;
• •when the new trading day starts.

For an Intraday Trader we check:

Daily Drawdown✓ Maximum Drawdown✓ Commissions and spreads✓ Trading platform✓ Available instruments✓ News trading rules

3Medium-term trading: Swing Trading

A swing trader tries to catch a bigger market move and therefore doesn't necessarily close all positions at the end of the trading day. Because of this, different priorities appear when choosing a Challenge. Weekend Holding

If your strategy involves holding a trade for several days, be sure to check this rule. News Trading

Important economic news may come out while you hold a position. So you need to understand whether News Trading restrictions apply to positions that are already open. Drawdown

For a swing trader, the drawdown calculation mechanics are especially important. An open position may temporarily go negative before the trading idea plays out. If the Drawdown uses Equity or a Trailing mechanism, this must be accounted for in the risk model. For a Swing Trader we check:

Weekend Holding✓ News Trading✓ Daily Drawdown✓ Maximum Drawdown✓ Static / Trailing Drawdown✓ Calculation by Balance / Equity✓ Funded Account rules

Important

Don't use a universal rule:

“Swing = Static Drawdown only”. Trailing Drawdown on its own doesn't make a Challenge unsuitable for a swing trader. It's more important to understand the specific drawdown formula and check whether your strategy can withstand it.

4News trading: News Trading

For example:

• •an interest rate decision;
• •inflation data;
• •labor market statistics;
• •other important macroeconomic events.

When news is released, the price can move much faster than usual, and trading conditions can change. So we check:

• •Is News Trading allowed at all?
• •Which news is restricted?
• •Is there a prohibited time window?
• •Can you open a trade before the news?
• •Can you close a trade after the news?
• •Can you hold a previously opened position?
• •Are the Challenge and Funded rules the same?

The main rule

Don't buy a Challenge and then rebuild your whole trading system around it.

5Crypto Trading

If you trade crypto, the word “Crypto” in the list of available markets is not enough. You need to check the specific trading conditions. Available instruments

Which assets exactly can you trade? For example:

• •BTC;
• •ETH;
• •SOL;
• •other available instruments.

The set depends on the Prop Firm. Trading hours

The crypto market runs around the clock, but a particular Prop Firm, platform or instrument may have its own trading schedule. So check the actual trading hours. Trading costs

Check:

• •spread;
• •commission;
• •other costs;
• •execution specifics.

For a Crypto Trader the following matter:

The right instruments✓ Trading schedule✓ Spreads✓ Commissions✓ Trading platform✓ Weekend Holding✓ Rules for the specific strategy

6Forex and Futures: what's the difference when choosing a Prop Firm?

There's no need to decide here which market is “better”.

Forex

For example:

EUR/USDGBP/USDUSD/JPY

Depending on the Prop Firm, trading may happen through different platforms. When choosing, we look at:

• •available currency pairs;
• •platform;
• •spreads;
• •commissions;
• •execution;
• •News Trading rules.

Futures

Futures programs may differ from Forex/CFD programs not only in platforms, but also in the very system of Challenge and Drawdown rules. So you can't automatically carry over experience from one type of prop firm to another. The main idea

First determine:

What exactly do I trade? And only then choose the Prop Firm and Challenge.

7Which Drawdown suits your strategy?

In the previous lesson we covered:

But choosing between them only on the principle:

Static = goodTrailing = bad

is wrong. You need to look at how your own strategy behaves. Ask yourself:

What maximum Drawdown has my strategy shown historically? How many losing trades in a row are normal for it? How long do I hold positions? How much does the Equity of open positions fluctuate? What risk do I use per trade? Then compare your answers with the Challenge rules. For example

If the strategy regularly has streaks of 5–6 losing trades, the Challenge should let you survive such a streak at your working risk. If the strategy holds positions for several days and allows significant Equity swings, this must also be taken into account.

Don't adapt your strategy to a nice-looking Challenge. Choose a Challenge that fits how your strategy behaves.

81-Step or 2-Step?

We already covered the difference in the first lesson. A reminder:

1-Step Challenge

You need to pass one stage before getting a Funded Account.

2-Step Challenge

You need to pass two stages in sequence. But here it's important to drop a very common oversimplification:

There is no universal rule. You need to compare:

How to choose? Don't ask:

Ask:

“Which of these Challenges has a set of conditions that better fits my strategy?”

9How to choose the account size

For example:

“If I can buy $100K, why take $25K?”

But a larger size alone doesn't make a Challenge better. What really needs to be considered?

1Challenge price

A larger account usually costs more. If the Challenge is lost, another attempt will also require additional costs.

2Risk rules

Look not only at:

Account Size: $100,000

but also at:

Daily Drawdown

Maximum Drawdown

Drawdown type

3Your trading system

What position size does it require? What risk do you use? What losing streak is normal for it?

4Psychology

For some traders, absolute numbers affect decision-making. For example:

−$50

−$1,000

may be the same percentage risk, but feel completely different psychologically. Therefore

We don't say:

“Beginners must start with $10K”. It's more accurate to say:

Choose the account size based on the price, program rules, your own risk model and psychological comfort.

10How to account for commissions and spreads

We've already come across two terms.

The difference between the buy and sell price.

An additional fee for executing a trade, if the terms provide for it. Why is this especially important when choosing a Challenge? Because the same trading costs affect different strategies differently. Scalper

Makes many short trades. Costs matter a lot. Intraday Trader

Makes several trades within a day. It's also important to account for commissions and spreads. Swing Trader

May make far fewer trades. The impact of the commission on an individual trade may be less significant, but other costs and position holding conditions come into play. So there's no universal:

“Here's a good spread”. You need to understand:

How do trading costs affect my particular strategy?

11How not to buy a Challenge that conflicts with your strategy

Before buying, do a simple check. STEP 1. Determine your style

☐ Scalper

☐ Intraday Trader

☐ Swing Trader

☐ News Trader

☐ I use another style

STEP 2. Determine your market

I trade:

☐ Forex

☐ Crypto

☐ Futures

☐ Other instruments

STEP 3. Check the Challenge

MY TRADING

☐ Are the instruments I need available?

☐ Does the trading platform suit me?

☐ Is my trading style allowed?

☐ Do the News Trading rules suit me?

☐ Does Weekend Holding suit me?

☐ Is the automation I use allowed? MY RISK

☐ Does the Daily Drawdown suit me?

☐ Does the Maximum Drawdown suit me?

☐ Do I understand how the Drawdown is calculated?

☐ Does my usual losing streak fit within the risk model?

☐ Does the Consistency Rule suit me? MY COSTS

☐ Do the spreads suit me?

☐ Do the commissions suit me?

☐ Do I understand the other trading costs? AFTER THE CHALLENGE

☐ Do the Funded Account rules suit me?

☐ Does the Profit Split suit me?

☐ Do the Payout terms suit me? Putting it all together

Now imagine two traders. Trader #1

Trades Forex. Makes 10–15 short trades a day. Doesn't hold positions overnight. Doesn't trade the news. For them, the following are especially important:

spreads → commissions → execution → Daily Drawdown → trading platform. Trader #2

Trades several times a week. Holds positions for 2–5 days. May keep trades over the weekend. Their priorities are different:

Weekend Holding → News Trading rules for open positions → Drawdown mechanics → Equity → Funded conditions. The same Challenge can suit the first trader perfectly and not suit the second at all. That's exactly why there is no universal:

“Best Challenge”

There is:

“A Challenge that suits my trading system”

How to use PropMarketCap

Now we can combine the knowledge from all the free lessons into one action. You already know:

• •what Prop Trading is;
• •how to read Challenge rules;
• •how to check a Prop Firm;
• •how to determine your trading strategy's requirements.

On PropMarketCap you can use this knowledge to compare available Prop Firms and Challenges. The selection logic:

1Choose a market

2Determine your trading style

3Filter out unsuitable Prop Firms

4Compare Challenge rules

5Check the Drawdown and restrictions

6Compare trading conditions

7Choose a suitable Challenge

8And only after that look at the price, discounts and available promo codes

Key takeaway

$25K / $50K / $100K / $200K

It's a set of rules within which your trading system must work. So before buying, ask yourself the main question:

Will I be able to trade here the way my strategy requires without breaking the Challenge rules? If passing requires you to completely change your working trading system just for the rules of a particular Challenge, it may be worth considering another option. FIND A CHALLENGE

Not the biggest. Not the cheapest. Not the one with the biggest discount. But the one whose conditions suit your trading. On PropMarketCap you can compare available Prop Firms and Challenges, study their conditions and find a suitable option. And what happens after the purchase?

After the purchase, the main questions change:

How do I build a trading system specifically for Prop? How do I calculate risk so as not to lose the Challenge? How do I pass the Challenge? How do I not lose the Funded Account after passing? How do I reach the first payout? How do I scale the result?

This is what the full PropMarketCap Academy is about; access to it opens with Membership after buying a Challenge through PropMarketCap.