Propfirm Tips by Dan Cheung

Blueprint to $5 Million Funding (10 Years Experience)

I. Scaling Goal and Current Status

• Goal: $5,000,000 in funding and $500,000+ in payouts.
• Recent Success (Nov): Added $1.5 million in capital and secured $60,000 in payouts, with a net profit of $55,000 after fees.
• Current Firms: Max allocated with FTMO, and nearly max allocated with Alpha Capital and True Forex Funds.

II. Trading Strategy: Challenges vs. Live Accounts

The speaker uses a highly aggressive risk profile for challenges to ensure a quick return on investment (ROI) based on time, and then shifts to a highly passive risk plan once funded.

1. Challenge Mindset (Flip Account)

• Goal: Secure the refund and get the live capital quickly.
• Aggressive Risk Plan (Example):
  • Risk: 2% per trade, maintaining a 1:2 Risk-to-Reward ratio [09:59, 10:05].
• Passing Phase 1 (10% target): Two winning trades (4% gain + 4% gain = 8%)
• Passing Phase 2 (5% target): One winning trade (2.5% risk for 5% gain).
• Total Time: The entire two-phase challenge can be passed with three winning trades in a row

2. Live Account Mindset (Treasure Preservation)

• The live account must be treated like a treasure that needs to be preserved.
• The risk level is dropped significantly to a very passive level to ensure consistency.

III. Dynamic Risk Management (For Standard Challenges)

For traders taking a standard approach (not the aggressive flip strategy), the speaker recommends a 20-Trade Risk Plan that uses a dynamic risk adjustment to prevent blowing the account quickly:

1. Start: Risk 1% per trade for the first five losing trades (Total 5% drawdown).
2. Adjust 1: Drop risk to 0.5% for the next five losing trades (Total 2.5% drawdown).
3. Adjust 2: Drop risk to 0.25% for the remaining 10 losing trades.
4. Result: This gives the trader a 20-trade buffer before hitting a 10% maximum loss and forces a reset if 20 trades are lost in a row.

IV. Firm Recommendations (Based on Execution)

The speaker strongly recommends prop firms that have their own proprietary technology, as this results in flawless execution and minimal slippage.

• Top 3 Recommended Firms:
  1. FTMO: Number one for execution and branding.
  2. Alpha Capital: Ranks highly, with good execution.
  3. True Forex Funds: Also uses its own technology, resulting in very good execution. The speaker advises getting max allocated with these top firms first before branching out to others.

Reference Link:

DO THIS to Guaranteed A Prop Firm Payouts Every time

I. The Risk of Traditional Copy Trading

The speaker highlights the dangers of using a single master account with a copy-trader tool for all accounts:

• Total Loss Risk: If the master account goes on tilt, hits a maximum drawdown limit, or suffers due to unexpected slippage or global news, all linked accounts are instantly lost
• Mitigation: The speaker's rotation method is designed to mitigate this risk and reduce the financial damage when mistakes or drawdowns occur

II. The Rotation Strategy (Three-Account Model)

The rotation method works by splitting the total funded capital into three separate accounts, each serving a distinct purpose. The speaker uses a 600K total funding example, with three 200K accounts.

Account	Objective	Trading Risk/Style	Benefit
Account 1: Secure Payout	Aim to secure a small profit (2% to 5%) quickly.	Conservative: Low risk (0.25% to 0.5% per trade), requiring only two solid winning trades to hit 2%.	Guaranteed Salary: Once hit, the payout is requested, and that profit is secured for the month.
Account 2: Low-Risk Trading	Maintain trading skills, practice compounding, and manage drawdowns.	Low Risk/Consistency: Trade low-risk consecutively for a two-to-three-week period.	Sustainability: Keeps skills sharp and provides a sustainable way to trade on a live account over a long period
Account 3: The Run-Up	Capitalize on favorable, high-probability market conditions	Higher Risk: 0.5% to 1% risk per trade, targeting higher reward multiples.	Opportunity: Allows the trader to secure larger profits without risking the other two accounts.

III. Rotation Benefits

The key advantages of this system are risk mitigation and mental well-being:

• Drawdown Protection: If one account is lost or in a significant drawdown, the trader still has the other two (400K in the example) to rotate from.
• Consistent Income: Securing a payout early in the month (Account 1) removes the mental pressure to chase profits.
• Scalability: The method works regardless of the account size (e.g., 20K, 50K, or 3M) as long as the capital is divided into these three roles.

Reference Link:

How to Get Consistent Payouts from Prop Firms

I. The Mindset Shift: Challenge vs. Live

Feature	Prop Firm Challenge	Live Funded Account
Primary Goal	To Pass the evaluation requirements.	Account Preservation & Consistency of the trading strategy.
P&L Focus	Psychological pressure to close trades when hitting the 8% or 10% target.	Focus on sticking to the system and keeping risk low; profit numbers are secondary.
Risk	The risk is just the challenge fee.	The risk is losing all the time and effort spent to pass the challenge.
Sustainable Target	N/A	Aim for 3% to 5% profit for a payout, then repeat the cycle.

The speaker notes that 3% to 5% profit on a $100,000 account is $3,000 to $5,000 per payout, which is a life-changing amount of money for most people.

II. Three Major Tips for Live Funded Success

**1. Do Not Rush

• Trust Your Edge: Your trading plan worked to get you funded; take it slow and easy.
• Focus on Consistency: The goal is consistent payouts of 3% to 5%. It does not matter if it takes two weeks or two months to reach that target—the market is always right, and consistency is the key to long-term reward.

**2. Drop the Risk

• Challenge Risk: Typically approached with 1% risk dynamically adjusted.
• Live Account Risk: Drop the risk to 0.5% or 0.25% on the live account.
• Benefits: Lower risk gives double the buffer before losing the account and minimises the psychological impact of individual losses. The focus shifts entirely to consistency and account preservation.

3. Walk Away

• Prevent Mistakes: Walking away is crucial to prevent overtrading, making silly decisions, and to clear the mind.
• Trading is Draining: Trading is mentally exhausting because it involves money, which is tied to emotion.
• The Hedge Fund Lesson: The speaker shares a lesson from a hedge fund trader who mandated a three-week vacation after any major winning or losing period [08:35, 08:44]. This break prevents overconfidence and burnout, ensuring the trader returns with a fresh and objective mindset.

Reference Link:

The ONLY way to turned Profitable

The Mindset of Aggressive Trading

• Contradictory Nature of Life: The speaker acknowledges that his advice across different episodes may seem contradictory (like pros and cons of buying vs. renting a house), but this back-and-forth mindset is simply the reality of an entrepreneur's life. The key is knowing the "time and place" for each approach.
• The Opportunity Cost: The speaker explains that when he traded conservatively, sticking to a 1R or 2R mechanical system, he missed out on huge opportunities—sometimes worth $30K, $20K, or $5K—by not letting trades run longer.
• Switching to Aggression: He transitioned from a mechanical 1R/2R system (which yielded an average 2.5R with a 33% win rate for two years) back to trading based on price action, market reaction, and feeling (which he calls "grander trading"). This shift allowed him to achieve his significant payouts, including $100K from FTMO in 2025.

Strategy and Risk Management

• Taking Breaks After Big Wins: The speaker stresses the importance of quickly taking a break or walking away after a big win because large profits can lead to desensitisation (e.g., $2,000 feels insignificant after a $200,000 win).
• Resetting and Recalibrating: He plans to use his three-week break over Christmas to reset, redo his trading plan, and re-backtest to recalibrate his mind to trade "more calmly and stoically".

The Recommended Path to Aggression

He offers a structured way for new traders to incorporate aggression:

1. Secure Your Wins: First, establish a mechanical system and consistently secure your smaller wins.
2. Take Note of Missed Opportunities: During this process, take note of the times when trades could have run longer and made more money, but do not act on it yet.
3. Implement Aggression Later: Only after securing your first, second, or third payout should you begin to implement this aggression. This ensures you have the experience and proven results before taking on higher risk.

Final Analogy: Results Matter

The speaker concludes with a powerful analogy about the importance of results over intent, applicable to both trading and life:

• Intent vs. Result: If you leave early for an important 8:30 PM meeting but are stuck in traffic and arrive 30 minutes late, your good intent (leaving early) is valid, but the result is that you were late.
• Trading Success: In trading, the only thing that matters is being profitable; it doesn't matter what strategy you learned or what you bought. Success, results, and retiring your parents are "all that matters".

Reference Link

Pass EVERY Funded Challenge with this Risk Tutorial

I. The 20-Trade Risk Rule (Beginner/Standard)

The "20 Trade Rule" is a dynamic risk management strategy designed for beginners to intermediate traders using accounts with a 10% maximum drawdown limit. It provides a 20-trade buffer before the account is blown, helping to preserve capital during a losing streak.

Losing Streak Segment	Risk Per Trade	Total Drawdown (at end of segment)	Rationale
Trades 1-5	1%	5% drawdown	Standard risk to start.
Trades 6-10	0.5%	7.5% drawdown	Risk Off: Risk is halved to manage a losing streak dynamically.
Trades 11-20	0.25%	10% drawdown	Final 10 trades at the lowest risk level to exhaust the 10% drawdown.

• Upside Adjustment: If the account recovers (e.g., from the 7.5% drawdown back to 5% loss), the trader should go back up to the next risk level (0.5%).
• Goal: Protect capital in the long run and aid in the mental approach to managing risk.

II. Aggressive Risk Strategy (Intermediate/Scaling)

This plan is for experienced traders who have proven their strategy and are focused on scaling capital and maximising their return on investment (ROI) based on time. The goal is to pass the challenge as quickly as possible.

• Phase 1 (8% Target): Risk 2% per trade with a 1:2 Risk-to-Reward ratio. This means Phase 1 can be passed in two winning trades (4% gain + 4% gain = 8%).
• Phase 2 (5% Target): Risk is increased to 2.5% per trade. This phase can be passed in one winning trade (2.5% risk for a 5% gain).
• Overall Goal: The challenge can be passed with a three-trade winning streak.
• Risk: The downside is severe—losing five trades in a row will blow the account.

III. Dynamic Risk Adjustment in Phase 2

For the aggressive intermediate strategy, the speaker dynamically adjusts risk in Phase 2:

• If the account hits a 5% drawdown in Phase 2, the trader drops the risk to 2% or 1%.
• Rationale: The cost of the challenge and the opportunity of securing the refund and the live account are greater in Phase 2 than in Phase 1, making the account preservation more important.

Reference Link:

[Target] : $50k Funded Account made me a Full Time Trader (Traders Mindset)

The Core Argument for a $50k Account

The creator, Dan Chung (aka Champ), claims that a $50,000 funded account, which can cost as little as $200 for a challenge, is enough to make a trader financially free.

• Financial Impact: He argues that making just a 10% profit on a $50,000 account is **$5,000**. This amount is enough to cover essential costs like rent and food, contrasting it with the "big flashy things" often seen on social media.
• Modelling Plan: He provides a model to show how a small, consistent return can lead to a significant annual income:
  • Making 10% every quarter results in $5,000 per quarter, or **$1,250 per month**.
  • Making 10% every two months results in a $30,000 annual income, or **$2,500 per month**.
• His key message is that traders should not chase huge accounts (1M, 2M) immediately but focus on getting consistent payouts on a $50k account first, as it is sufficient to achieve freedom.

The Creator's Credentials

The creator establishes his authority by sharing his experience:

• He has reached up to $2.5 million in funding and made $85,000 in one single month.
• He has accumulated over $400,000 in payouts and helped students secure payouts up to $800,000.

Final Advice

The video concludes by urging traders to focus on consistency with a manageable account size and offers a final piece of motivation: "The only traders are the ones that give up, so the answer is just never give up".

Reference Link:

Guide To Make Money From Prop Firm Trading In 2025

I. How Prop Firm Challenges Work (FTMO Example)

Prop firm challenges typically involve a two-step evaluation process:

Requirement	Phase 1 (Evaluation)	Phase 2 (Verification)	Funded Account
Profit Target	10% (e.g., $10,000 on a $100K account)	5% (e.g., $5,000 on a $100K account)	N/A (Keep trading and accruing profits)
Max Daily Loss	Must not exceed a set percentage (e.g., 5% of starting balance)	Same as Phase 1	Same as challenge rules
Max Overall Loss	Must not exceed a set percentage (e.g., 10% of starting balance)	Same as Phase 1	Same as challenge rules
Trading Period	No upper time limit	No upper time limit	N/A
Minimum Trading Days	4 days	Same as Phase 1	N/A
Profit Split	N/A (Challenge)	N/A (Challenge)	Typically 80% (or up to 100% on the first payout for some firms)
The only risk to the trader is the evaluation fee paid for the challenge.

II. Modelling the Opportunity (Visualisation)

The speaker uses a risk-to-reward model based on a 40% win rate and a 1:2 Risk-to-Reward ratio (risking $1,000 to make $2,000 on a $100K account) [12:20, 12:52].

Metric	Calculation	Result
Net Profit per 10 Trades	4 wins ($8,000) - 6 losses ($6,000)	$2,000
Time to Pass Phase 1	$10,000 Target / $2,000 Weekly Profit (assuming 10 trades/week)	5 Weeks
Time to Pass Phase 2	$5,000 Target / $2,000 Weekly Profit	3 Weeks
Total Time to Get Funded	5 weeks + 3 weeks	8 Total Weeks
Annual Earnings	$8,000/month * 12 months (before profit split)	$96,000/year

The model demonstrates that consistent action and adherence to a plan make achieving significant annual income very possible.

III. Risk Management Plans

The speaker details two risk plans for traders:

1. Standard (Static) Risk Plan:
   • Rule: Always risk the same static amount per trade (e.g., 1% or $1,000) and aim for the same reward (e.g., 2% or $2,000) .
   • Goal: To pass or fail the challenge quickly without wasting too much time trying to recover from drawdowns.
2. Dynamic Risk Plan:
   • Rule: Drop risk percentage after a string of losses to extend the draw-down period.
   • Example: Start with 1% risk for the first few trades. If you lose, drop risk to 0.5%. If you lose again, drop risk to 0.25%.
   • Goal: Allows more room to breathe and trade longer on the account, which is better for traders with longer losing periods.

IV. Strategy and To-Do List

To turn a dream into a reality, a trader must have a plan, which the speaker calls a Trading Playbook. The plan requires three steps:

1. Strategy: Must be proven by yourself (through backtesting, sample testing, and future testing) and not just by a mentor.
2. Psychology: Understanding and controlling your emotional response to specific profit or loss numbers.
3. Consistency (The Hardest Bit): Applying the strategy and psychology consistently. The Trading Playbook must include:

• Trading Strategy Write-Up: Details on times, pairs, and confluences you look for.
• Tick Boxes (Confluences): A checklist of all factors that must align before taking a trade.
• Journal Setup: The most important tool, as you can't manage what you don't measure. This includes reviewing every trade, showing passes, wins, and losses for self-accountability.

Reference Link:

BEFORE YOU BUY A PROP CHALLENGE MUST WATCH THIS

The Role of Prop Firms

The speaker emphasises a core concept: prop firms are a starting point for a career, not the final destination.

• Ultimate Goal: The end goal is to be a fund manager or achieve true financial freedom, where trading is seen as the "biggest f*** you token in the world" to having a boss.
• Progression: Once a trader establishes a consistency and a track record through prop firms, they can move into fund management, private equity, personal account trading, or capital raising.
• Value of Skill: Having the trading skill is everything, and no one can take that away from you.

Critique of the Industry and Trader Mindset

The video addresses the toxicity and misunderstanding surrounding prop firms:

Mindset Error	Correct Perspective
Focusing on Price/Refund	Worrying about the challenge price means you've already failed because you don't believe you have the skill to pass and get the refund/profit .
Negative Risk/Reward	Looking for a model with a 12% drawdown for an 8% profit target (negative R/R).
Basic Investment Principle	The opposite should be true: the trader should have the most minimalized risk and the maximized gains.
Focusing on Payouts	The main focus should be on consistency and building a track record, which will lead to payouts as a result.

The Prop Firm Business Model

The speaker addresses the common argument that prop firms only profit from failed challenges:

• Yes, they make money when you lose a challenge.
• However, the fees pay for the business infrastructure, including:
  • Tech, business costs, and support.
  • The payouts themselves—money does not come from "thin air".
  • The system is compared to a zero-sum game, similar to how money is exchanged in a broker or an institutional bank loan.
  • The instability (failure of many firms) is due to poor management, hedging, and business models, and the industry is currently in a "race to the bottom".

Why FTMO is Considered the Industry Leader

The speaker singles out FTMO as the number one firm, based on these facts:

• Longevity and Sustainability: They have been around for nearly nine years and are sustainable.
• Reliability: They have not denied a payout and have no "toxic things" about them.
• Liquidity: They have significant assets and holdings, meaning their payouts are less than their expenses, making them liquid.
• Institutional Backing: They have been acquired by Quant Lane, an institutional prop firm.

The Need for Equilibrium in Rules

Historically, prop firm models have been unstable because the balance between trader and firm benefit constantly shifts:

• Old Problem (Favoured the Firm): Rules like the 30-day limit to hit a 10% target were illogical because the market might not offer opportunities within that timeframe.
• Current Problem (Favoured the Trader): The current skew the trader too much, which makes the firm's model unsustainable.
• The Solution: The industry needs to find an equilibrium so that the model is sustainable for the prop firms and still provides a viable opportunity for traders.

Reference Link:

5 Prop Firm Red Flags Guide (2025 Which are Legit?)

**5. Drawdown Types

• The Issue: Certain firms use trailing drawdown rules that follow the account's highest profit point, making it difficult for traders to maintain the account. The creator points to his bad experience with FXFI, which had an arbitrary rule that breached his account despite him getting paid out initially.
• The Exception (Green Flag): A good policy is when the trailing drawdown stops following you once the account reaches the initial starting balance or a specified break-even point. This allows for account growth and building.

**4. Fake Social Media and Engagement

• The Issue: Companies that buy fake followers, artificial engagement, or fake reviews (like on Trustpilot) lack sincerity and integrity.
• The Principle: If a company is willing to deceive the public with its face and branding, it raises questions about its true intentions and morals regarding payouts and business practices ("how you do something is how you do everything").

**3. No Face Behind the Company

• The Issue: Prop firms that launch with no public figure, CEO, or management team attached to them are risky.
• The Concern: If the company "rug pulls" or suddenly closes (like in the crypto space), there is no one to hold accountable. Established firms like FTMO and Funded Next have known CEOs and asset holdings, putting their reputation on the line.

**2. Stupid Reasons (for Problems)

• The Issue: Prop firms that use illogical or ridiculous excuses for technical issues, such as extreme slippage or poor execution, indicate a lack of knowledge or deceptive practices.
• The Example: The creator shared an experience with The Funded Trader where he was slipped 50 pips in normal market conditions, which the firm initially claimed was normal. While he was eventually reimbursed, the initial excuse was "ridiculous".
• The Balance: The creator acknowledges that prop firms must be profitable (a "win-win situation"), but they must maintain a "healthy balance" by paying out traders who adhere to the rules.

**1. Poor Customer Support (Most Important)

• The Issue: When you have a problem, you need good customer support. Rude, unhelpful, or immediately closing tickets without conversation are massive red flags.
• The Principle: Customer support is critical because it's the point of need. The creator believes that firms should communicate why they cannot fulfil a request, offer solutions, and keep the line of communication open.
• Connection to Broker Choice: The creator looks for two things in a broker or prop firm: the certainty of a payout and excellent customer support.

Reference Link:

Are Broker Prop Firms Legit (2025)

Pros of Broker-Backed Prop Firms

• Reputability and Infrastructure: Because they are backed by a full company (a broker), they are seen as more reputable than a "random kid on the block" firm.
• Execution and Liquidity: Using a platform like MT5 means they can handle their own liquidity, leading to clean execution and no need for a separate liquidity provider.
• Specific Examples (Positive):
  • Think Capital: Described as "quite good" with good rules, decent execution, a good platform, and attractive leverage.
  • Oanda: Mentioned as the second firm the creator is considering trading with in the future.

Cons and Concerns

• Lack of Innovation/Ego: The primary issue is that because these firms are so large, they can have an "ego" and view traders as "just a number," unlike newer, hungrier prop firms that are eager to innovate and provide community support (e.g., Discord).
• Unattractive Rules: Some of the four or five broker-backed firms have rules that are not competitive with industry standards (e.g., 10%/5%/8% targets vs. 6%/6% targets or 12% drawdown offered by others)
• Poor Customer Service and Payout Issues: When customer service is poor, payouts tend to coincide and get delayed [05:07]. The creator notes that with firms like IC Funded and Purple Trading (formerly Finotec), payouts were getting longer, and customer service was subpar, causing traders to pull away
• Payout Denials: Seeing payout denials on social media is a red flag, and traders must investigate the reason. A denial is only a concern if the trader followed the rules and the firm denied the payout randomly.

Final Recommendation: Diversify Allocation

The creator advises traders to get the maximum allocation possible with an established firm like FTMO, and then use broker-backed firms for diversification, especially if they clean up their act

• Strategy: Get small accounts (e.g., $5K or $10K) with multiple broker-backed firms (like Think Capital and Oanda), get a payout to test the process, and then scale up.
• Diversified Portfolio Example: 400K with FTMO, 200K with a safer broker-backed firm like Think Capital, and then $50K each with two other firms.

Reference Link: