Why I Stopped Trading Prop Firms - Part 2

Introduction

In this tutorial, we will explore the key insights shared by Abdullah Rasheed in his video about why he decided to stop trading with prop firms. This guide will provide you with a structured understanding of his journey and the considerations that influenced his decision, ultimately aiming to enhance your own trading strategy.

Step 1: Understand the Prop Firm Landscape

• Research Prop Firms: Familiarize yourself with how prop firms operate. They provide capital to traders, allowing them to trade with firm money while sharing profits.
• Evaluate the Growth: Acknowledge that the evaluation business is expanding. This can create opportunities, but also competition and pressure to perform.

Step 2: Reflect on Your Trading Goals

• Identify Long-Term Goals: Determine what you want to achieve in your trading career. Are you looking for consistent income, capital growth, or something else?
• Assess Compatibility with Prop Firms: Consider whether trading through a prop firm aligns with your personal goals and trading style.

Step 3: Analyze the Financial Implications

• Review Profit Sharing: Understand how profit-sharing agreements work with prop firms. Generally, you will split profits, which may limit overall earnings.
• Consider Fees and Costs: Be aware of any fees associated with joining or trading at prop firms. This includes evaluation fees and potential monthly costs.

Step 4: Evaluate Your Trading Independence

• Desire for Autonomy: Consider whether you prefer having complete control over your trades. Prop firms often impose restrictions on trading strategies and risk management.
• Long-Term Business Strategy: Think about building a personal trading business versus trading under a firm. This can lead to more sustainable practices and personal growth.

Step 5: Seek Alternative Trading Paths

• Explore Other Options: Look into independent trading, joining a trading community, or even starting your own trading group.
• Utilize Resources: Take advantage of tools like TradeZella or Trade Ideas, which can support your independent trading journey.

Step 6: Continuous Learning and Adaptation

• Stay Updated: The trading landscape is ever-changing. Keep learning through books, online courses, and trading webinars.
• Adapt Strategies: Be flexible with your trading strategies as you gain more experience. What works for one trader may not work for another.

Conclusion

Abdullah Rasheed's decision to stop trading with prop firms highlights the importance of aligning your trading practices with your personal goals and values. By understanding the landscape of prop firms, reflecting on your objectives, and considering alternative paths, you can make informed decisions that support your long-term trading success. As you progress, remember to continuously learn and adapt your strategies for the best outcomes.