Trade Only Once a Day During the Evaluation Phase

When it comes to passing the evaluation for a funded futures account, I feel that best approach is to limit your trading during the evaluation phase of the futures funding programs. This will not be applicable to every trader or every strategy, but in my experience, it has led me to pass many evaluations with the least effort.

You don’t have to trade this way on other accounts, or even on your funded account, but consider it for the evaluation. I think there are several good reasons for it, that can benefit both beginner and more experienced traders, which I will explain below.

Note that I use a well-studied and practiced strategy that permits me to do this. I can earn enough from one of my typical setups that justifies stopping for the day. I will also admit that I am biased against scalping (trading for a few ticks), and don’t plan to ever trade that way again. If you are more of a scalper, this will be a difficult adjustment for you, and your results will vary. But keep an open mind, and you might discover that this approach could work better for you as well.

Trading Days Requirements

At most firms, there is a requirement of trading days that has to be met in addition to reaching a profit target. This might be 5, 7, or even 15 days. However, there is no requirement for how many trades you have to take. As long as you take one trade, it will count that session as a trading day.

My suggestion is to limit your trading to only the highest quality setups, aiming for 10-15% of your evaluation’s profit target on each. If your profit target is $3,000, this means that you should aim for just $300-400 of profit each day.

What does this accomplish? In my experience, it can help you with quite a lot.

First, it will greatly reduce any chance of overtrading or revenge trading. The key is to hold yourself to this. Regardless of whether your first 1-2 trades are profits or losses, you will not be at risk of taking on a series of losses and greatly hurting your chances and morale.

Second, it will allow you to finish some days in just an hour or less. Some of you might be busy with other work, hobbies, family, or a combination of the three. I’ve finished several evaluations by taking a single trade in the first 15 minutes on most days, and I know how much better I felt by freeing up all of that time without sacrificing any major progress on the account. This is a confidence booster, and keeps you from exhausting yourself.

Third, by focusing on only taking a single high quality setup, you will pass up many inferior setups, thus improving your win rate. I don’t know if it’s just me, but my first trade of the day often gets executed with a supreme level of confidence. After a series of losses, it can be difficult to get yourself back to that level mentally. Now imagine if you could take every single trade with that exact level of confidence. That’s exactly what you’re doing by taking one trade a day.

Finally, if you’re interested in trading multiple accounts and aren’t copy trading during your evaluations, it means you can finish one account, and move to the next. This somewhat works as a substitute to waiting 24 hours to trade again, as you can open up a new account with no trade history or P/L, and essentially trick your brain to work in your favor. This might take practice, as it is mostly mental gymnastics and deluding yourself to believe that you’re starting over.

Over time, this should greatly improve your ability to focus on the single next trade, and not get hung up on profits or losses on any individual account. In a way, it forces you to learn something you should be learning anyway, if your goal is to be a master trader.

How Different Firms Are Subtly Recommending Trading More Conservatively

OneUp Trader

OneUp Trader is one of the firms that requires 15 trading days. However, OneUp also has a requirement that your funded account activity closely resembles the activity of (they specifically require at least 50%) the evaluation account that you pass with.

What this means is that if you’re scalping 15 times per day to pass the evaluation, you’re going to have to find a way to place 38 trades per week on your funded account. This isn’t a rule at most firms, but it’s worth mentioning because OneUp is still one of the better firms overall. By reducing your trading volume, you allow yourself an easier situation once you’re funded by OneUp.

Apex Trader Funding

Apex Trader Funding enforces a consistency rule on funded traders, which limits your profit withdrawals. You can read about this rule here.

The 30% rule forces the astute trader to not push the pace and get too aggressive on a good day. If your account’s total profit had more than 30% from a single day, you won’t be eligible to withdraw. Unfortunately, if you’re hoping to get some of your profits early, you will have to keep a tight leash on yourself when you’re having a big day.

In other words, you are better off taking $300-700 of profit per day for 10 days, than taking two $1400 profit days on your mission to get to the withdrawal threshold at Apex. While you can freely make more money whenever you want, you will hold yourself back from payouts if you are not showing some consistency with those larger days. Thus, I recommend starting with one or just a few trades per day, and calling it early if you find yourself getting too far ahead of that 30% mark.

Psychology Behind Trading Less

While we’re all here to be day traders, and not swing traders, there seems to be a consensus that swing trading is typically less stressful overall, and takes less effort, than day trading.

Swing traders don’t have to watch every 5 or 15 minute candle, and sometimes go weeks without worrying about a single trade.

Day traders spend more time in front of the screen in pursuit of greater profits, and they will be rewarded for it if they have a good strategy.

But the relationship between day trading and swing trading is similar to that of scalping and “normal” day trading. At some point, as your number of daily trades goes up, there is a significant cost in terms of mental energy and stress. I believe this point to be somewhere between fast-paced day trading and scalping, where the additional time and effort is no longer worth whatever extra profits it may generate. Plus, if you’re not doing well, commissions will add up faster.

This limit will be different for everyone. For me, keeping my trades to about 7 or less per day seems ideal. If you find yourself taking 20 or more trades often, consider an adjustment and evaluate yourself honestly. This is an incredibly stressful job and you mustn’t overlook that aspect of it.

Is it right for you? It depends on what stage you’re at.

No generalized trading advice will always apply to everyone. This tip is no different. While it’s imperative to manage your own mental energy and stress, especially over the long term, this is not as much of a priority when starting out. When starting, I think it’s more important to get more practice, at least until you figure out your strategy and comfort zone.

Just like with any exercise, you want to get sufficient reps to be sure that you’re maximizing your learning. The time you dedicate to practicing executing your strategy should include lots of trades, and plenty mistakes.

However, this doesn’t mean you need to rack up losses or beat yourself up for those mistakes, either. If you’re in that phase, where you need more practice with various setups, consider getting those reps on a demo account, until you find the sweet spot for you. Then, take it to your favorite prop firm, and test it out on the evaluation.