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STBP Exploit Futures Propfirms

How to trade prop firms

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David Morin
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244 views7 pages

STBP Exploit Futures Propfirms

How to trade prop firms

Uploaded by

David Morin
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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EXPLOIT PROP FIRMS

The Secrets to Success Against Futures Prop Firms

@CASPER_SMC
@ETHAN_ICT
PROP FIRMS
The Secrets to Success Against Futures Prop Firms

UNDERSTANDING “PROP FIRMS”


While prop firms offer a unique opportunity to earn a significant amount
of money without utilizing your own capital, a trader must think about it
from their point of view: a prop firm’s profitability hinges on the failure of
traders. Indeed, their companies only make money if you fail. In fact, these
companies even establish specific rulesets to consistently produce failing
traders. Instead of imagining a large-funded partner backing you, prop firms
are really just casinos—they will pay those rare few that actually win, and
definitely take the money of those that lose.

With that being said, this task is nowhere near impossible. David will
always beat Goliath IF he has a mechanical gameplan composed to conquer
the menacing beast.
TRAILING DRAWDOWN
The Secrets to Success Against Futures Prop Firms

THEIR GREATEST WEAPON


Trailing drawdown presents a formidable challenge for traders, often
serving as one of the most difficult obstacles to overcome. Trailing
drawdown is calculated by subtracting the allotted trailing drawdown from
the peak balance of one’s account. For some prop firms the “peak” refers to
the realized amount however, the more brutal prop firms will refer to the
peak equity.

In order to combat this issue, strategies with high risk-reward ratios


should not be used. Aiming for an insanely far target leaves room for price to
retrace bringing your account ever closer to the trailing drawdown.
Additionally, a tight stop needs to be implemented and successfully managed
to neutralize the trailing drawdown.
ACCOUNT SIZING
The Secrets to Success Against Futures Prop Firms

FOOLS GOLD
Believe it or not, prop firms use even the size of your account as a weapon
against the average trader. While there is a common belief that purchasing a
larger account will lead to larger payouts, in fact, the opposite is true. Larger
account sizes (such as the 300k option) come with disproportionately higher
profit targets, making them significantly harder to pass. In contrast, smaller
account sizes (like the 50k option) present a more manageable challenge.
Indeed, by stacking multiple smaller accounts, this significantly increases the
likelihood of actually obtaining a payout.
CHART STRATEGY
The Secrets to Success Against Futures Prop Firms

ERL TO IRL
Although understanding the inner workings of the prop firm business
(and how to exploit them) is extremely beneficial, at the end of the day the
only thing that matters is actually passing the challenge and winning trades
within the chart.

All high-probability trades start with a concrete higher time frame


narrative. This becomes relatively simple with the understanding of how
price travels: price always moves from external range liquidity to internal
range liquidity (and vice versa). Here, external range liquidity is referred to
as highs and lows, and internal range liquidity is referred to as fair value
gaps. Price is always traveling between these two.
DISSECTING PRICE
The Secrets to Success Against Futures Prop Firms

FRACTALITY OF TIME
With a general understanding of where price is going in the future (higher
time frame narrative), one should start directing these moves to participate
in high-probability price movements.

Within each pool of liquidity—be it external or internal—there are lower


time frame market maker models occurring. For instance, if price is traveling
bullishly from IRL to a higher ERL, price first moves to the IRL during the
sell side of the curve, and then expands to ERL during the buy side of the
curve. This allows a trader to dissect exactly when the price will expand,
decreasing their risk in order to combat trailing drawdown.
EXECUTION
The Secrets to Success Against Futures Prop Firms

TIME FRAME ALIGNMENT


As discussed previously, time is fractal. This notion suggests that the
inner workings that helped decipher a higher time frame narrative (ERL/IRL)
can also be utilized within a market maker model to find the most precise
entry possible.

Indeed, going from a higher time frame visualizing the general direction
the market is headed, to aligning oneself with the correct side of a market
maker model, to disecting even further finding a lower time frame entry
within said model produces the highest probability of winning while
mitigating as much risk as possible. One example of this would be finding a
narrative on the 4H (HTF), identifying a market maker model on the 15M
(ITF), and executing within this model on the 1M (LTF).

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