Prop Firm Accounts, Trailing Thresholds & Contract Sizes
What Is A Prop Firm Account?
Prop firms give traders access to significant capital after the trader has proven to be successful with their trading strategy/strategies. The Prop Firm will have an evaluation stage that you will need to pass before moving on to real money and both will have a trailing threshold which protects the Prop Firm.
Why use them?
No personal capital required-
Traders don’t need to invest their own money-
Strict accountability to make you a better trader-
Potential for high returns-
What Is A Trailing Threshold
A trailing threshold is a system that adjusts the maximum allowable loss based on the trader’s current account balance. Once the trader graduates from an EVAL account to a PA account this system protects the Prop Firm from losing real money.
For example, the 50K account has a Trailing Threshold of $2,500. This means that the max you can lose is $2,500 from the highest profit point.
Contract Sizes- ONLY Recomended for the ORB Inversion Strategy
A general rule is to reduce 1 contract per – $500 on your trailing threshold. You can easily check your trailing threshold by going to your Tradovate account and opening the Equity/Open P/L box:
