What is The VWAP in Trading? Guide to Volume Weighted Average Price
Trading guides, webinars and stories
Trading guides, webinars and stories
Congratulations, the big day is here, you have passed the Gauntlet Mini™ challenge, and now you are a funded trader!
But what happens now? Do you still need to follow the rules? What happens if you make a nice profit? How can you withdraw funds? What happens if you blow your funded trading account? There are a lot of questions that need to be answered! That is why we created this article. The goal is to help you better understand what happens after you join our funded trading program. This is where the real trading begins.
Now you’re past the Gauntlet Mini™ challenge, what fate awaits you? Well, if you ever needed an incentive, your share of the profit split as a funded trader will give you that. Profit withdrawals are split on an 80/20 basis in your favor. So, if you maintain the discipline you’ve gotten used to in the Gauntlet Mini challenge, the potential is huge. The world (or at least the market) is your oyster!
While obvious, it is important to state a crucial fact regarding withdrawals. You can only withdraw funds when you have a positive balance in your account. So, you can’t withdraw any of the initial capital that the prop trading firm provides.
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You can withdraw funds from your funded trading account at any time (assuming you have a positive account balance). The minimum amount you can withdraw is $100, and withdrawal instructions are processed every Tuesday. Withdrawals are available through bank wire transfers and direct ACH deposit. Any transaction fees are covered by the proprietary trading firm for withdrawals of over $500. These fees may vary, although they are generally somewhere between $30-40. More importantly, any brokerage fees owed, such as monthly data fees, are also deducted during withdrawal. Don’t worry, if you’ve already paid them, they won’t be deducted twice.
Before answering this question, let’s think about it for a moment. Why would you look to change the rules if they allowed you to power through the Gauntlet Mini™ challenge? Whether it’s virtual or live trading, the key to any success is discipline. Yes, breathe a sigh of relief that you have passed the Gauntlet Mini™ challenge. At this point, you have your own funded trading account. However, this is only the beginning, the chance to create a potentially huge income stream. Complacency is the enemy of profit.
The rules are mostly the same when trading as a funded trader as they were when you took on the original Gauntlet Mini™ challenge. Because the proprietary trading firm providing the funds takes on all of the financial risks, your account will have a few safeguards set by them to protect their capital. This is meant to guard against situations where traders successfully pass the evaluation, then for some reason can’t handle the switch to a live market.
The number one safeguard is the drawdown. Much like your Gauntlet Mini™ account, your funded trading account will also include a trailing drawdown. Similarly to your evaluation, it will stop trailing once the drawdown threshold value (the balance where your account gets liquidated) reaches your starting balance. Basically, after your balance goes above the starting balance plus the allowed drawdown value. An example would be, for the $50,000 account, the allowed drawdown is $2,000. Once your balance reaches $52,000, your drawdown stops trailing. After that, your drawdown threshold value stays $50,000. This means your account only gets liquidated if the balance drops below $50,000.
Initially, your funded trading account also starts with a daily loss limit, just like in the Gauntlet Mini™. The difference is that unlike during the evaluation, for the funded trading account, this rule is only temporary. Once your trailing drawdown stops trailing (see above example), your daily loss limit is permanently removed. The rules concerning approved times and maximum position size (including the progression ladder) remain the same.
There is only one new rule added to the mix. Your account will get terminated after an unscheduled absence of five consecutive trading days. This rule serves a crucial purpose. Capital provided to traders by the prop firm cannot be allocated anywhere else. That’s why they are interested in preventing traders from simply claiming their funded account and not doing anything with it. It’s also critical to point out what the word “unscheduled” adds to that sentence. Traders are allowed to take time off from trading for whatever reason as long as they notify the prop trading firm. Some case-by-case restrictions may apply here, so don’t expect to take half a year off of trading, for example.
Once you’re funded with the proprietary trading firm, you will no longer need to pay any subscription fees for the Gauntlet Mini™. On the other hand, you will need to pay the monthly data fees. These are a pass-through fee directly from the Chicago Mercantile Exchange for providing live data.
Data fees are $105 per month per exchange. They need to be paid by you out of pocket from your credit card. The first month is charged immediately once your funded account is created. After that, you get charged at the end of every calendar month for the next month in advance. This includes the first month. That’s why we generally recommend starting with only one exchange at first. Only add more once you’ve built up your account balance a bit. We also suggest not starting your funded trading account near the end of the month. Starting at the beginning of the month means you don’t get charged for both the first and second month right away at the same time.
If you already have a data feed of your own for charting and simply want to execute on the prop firm’s feed, you do not need to subscribe to their data feed and not incur any costs.
Besides, unless you’re using a free trading platform, you will also be responsible for your own platform fees. Most of the traders who take the evaluation already have their own platform license, so they don’t need to purchase a new one when they get funded. If you don’t have one yet, you can purchase NinjaTrader at a discounted price using this promo link. The Finamark platform also comes with three months of free access after getting funded. However, it needs to be purchased after if you plan to keep using it. All platforms are made by 3rd parties, and their prices are set independently by their respective vendors. If you’re looking for a free platform option, we recommend RTrader Pro.
If you stick to the rules and stay above the trailing drawdown limit set by your starting account size, there is no upper limit to how much you can. That being said, don’t expect to get rich quick. Although slowly building up your account and showing restraint may seem tedious, traders who pass the Gauntlet Mini™ can confidently say that this method works better than doing otherwise.
As mentioned above, the key factor here is that you need to stick to the rules. Keep a close eye on your trading positions, spread the risk, and find a balance between maintaining liquidity and withdrawing your profits. While there is a “progression ladder,” allowing you to open more positions as your profits rise, it is not mandatory to scale up. If you see an opportunity, you can work in a position within your restrictions, but if you don’t feel comfortable scaling up, don’t do it.
While the promise of short-term profits may seem tempting, remember, this is a marathon, not a sprint. Your account will remain open as long as you remain above your trailing drawdown limit and abide by all of the rules.
As a trader, you will live and die by your decisions, investment strategies, and trading discipline. Unfortunately, if your account balance dips below the trailing drawdown, your account will be automatically closed and terminated. Although futures trading has the potential to make money whether the markets are going up or down, there are still cases of unexpected volatility that can ruin your day. That’s why you should always keep one eye on limiting losses and the other one on maximizing profit. The hustle and bustle of a heavy trading day can make it easy to lose focus, and traders always need to be aware of that danger.
It is important to realize that while you can sign up for as many Gauntlet Mini challenges as you want, you will only be offered one live funded trading account. Use your Gauntlet Mini challenge experience to perfect your investment strategies and tighten your discipline. In summary, treat your funded trading account as the unique opportunity that it is!
Initially, the rules for the funded trading account are the same as the Gauntlet Mini™ challenge. You must not:
As mentioned earlier, there is also one new rule to keep in mind:
All you have to do for the original rules is to continue trading with the same principles that helped you pass before. You’ve already proven that you can do it. Now you just need to keep going. If it feels like too much pressure, that’s not a problem either. Sometimes it’s better to take a break because forcing yourself to trade can often lead to poor outcomes. That’s why the rule against missing a week of trading has a provision to allow you to contact the prop trading firm to schedule an absence. Basically, remember what made you succeed in the first place, then do more of it.
The concept behind the Gauntlet Mini™ challenge is simple. Find investment strategies that work for you, reduce your risks, cut your losses, and doing so will help you maximize your profits. The key to any trading account is discipline. Proprietary trading firms are more interested in long-term steady partners/traders than those with a volatile track record. The 80/20 split of profits allows our partner firm to create a stream of revenue both from and for successful traders. It also incentivizes new traders to take a more long-term approach, maintain discipline, and use the investment strategies that brought them success in the first place.
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