Entering the world of proprietary trading with the dream of trading significant capital can be both thrilling and daunting. Yet, over 90% of traders fail to meet the requirements to get funded by prop firms. The high failure rate has little to do with traders’ abilities and more to do with the challenges set by the firms themselves. Here, we’ll explore why traders struggle to get funded and how the Million Dollar Trader Challenge (MDTC), offered by IFT Trader Challenge, addresses these obstacles to help traders succeed.
1. Unrealistic Profit Targets Lead to Over-Leveraging
Many prop firms set high profit targets to filter out applicants, but this often results in traders feeling pressured to take excessive risks, leading to over-leveraging and increased vulnerability to losses.
MDTC Solution:
The Million Dollar Trader Challenge by IFT Trader Challenge has set a reasonable 10% profit target for traders to reach. This realistic benchmark allows traders to maintain a disciplined strategy without succumbing to high-risk tactics. At MDTC, traders can focus on consistent growth rather than scrambling to meet inflated goals.
2. Strict and Hidden Rules Cause Unnecessary Obstacles
Some prop firms create a maze of complex, hidden rules about trading hours, instruments, and position sizes, which can lead to inadvertent rule violations, frustrating traders even when they’re performing well.
MDTC Solution:
IFT Trader Challenge’s Million Dollar Trader Challenge is built with transparency in mind. All rules are clearly outlined: traders know they can work with indices, forex, crypto, metals, and commodities, and that they need to close positions by 4:30 PM EST. MDTC’s commitment to straightforward rules lets traders focus on strategy, reducing unnecessary risk from rule misunderstandings.
3. Time Limits Create Psychological Pressure
For many prop firms, profit targets must be achieved within a specific timeframe. This adds pressure that can cause traders to rush into trades, make hasty decisions, or take higher risks—all of which increase the likelihood of failure.
MDTC Solution:
MDTC removes this obstacle by offering a no-time-limit structure. Traders can take as long as they need to reach the 10% profit target. Without the constant pressure of a time constraint, MDTC traders can approach each trade with confidence, patience, and discipline, focusing on consistency rather than speed.
4. Trailing Drawdowns Limit Flexibility
Trailing drawdowns are a significant source of frustration. When the drawdown adjusts with each high balance, traders are penalized as their success creates tighter constraints, forcing them to adopt overly conservative approaches just to avoid violations.
MDTC Solution:
The Million Dollar Trader Challenge by IFT Trader Challenge uses a static drawdown rather than a trailing one. This allows traders to retain flexibility after reaching a peak balance, promoting steady growth without penalizing success. The fixed $100,000 max drawdown on the $1M account ensures traders have ample room to withstand market fluctuations and stay focused on achieving their profit goals.
5. Slow Payouts and Limited Support Dampen Trader Motivation
Delayed payouts and minimal support are major issues in the prop trading world. Some firms make traders wait weeks or even months for payouts, while others provide little guidance or community engagement, leading to frustration and lower morale.
MDTC Solution:
IFT Trader Challenge’s Million Dollar Trader Challenge offers a 48-hour payout guarantee, so traders receive their profits promptly. And if payouts are delayed beyond 48 hours, traders get a 100% profit share. MDTC also provides a VIP Member area filled with trading resources, courses, strategies, and tools, showing a strong commitment to helping traders succeed.
Why Do So Many Traders Fail?
The high challenge failure rate isn’t necessarily a reflection of traders’ skills but rather of the restrictive practices of some prop firms. Unrealistic profit targets, hidden rules, time limits, trailing drawdowns, and limited support create a stressful, high-stakes environment.
How MDTC Sets Traders Up for Success
IFT Trader Challenge’s Million Dollar Trader Challenge was built to be different. With realistic profit targets, clear and transparent rules, no time limit, static drawdowns, and fast payouts, MDTC gives traders the structure and freedom they need to focus on their strategy and reach success. By creating an environment where traders thrive, MDTC shows its commitment to being a genuine partner in traders’ journeys.
