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All you need is a 33% evaluation pass rate to make $10,000 per month on prop firms. And I'm going to show you exactly why. Probably been losing money on prop firms because you think you have to win every single time, every single trade.
Learn how a 33% evaluation pass rate can help you make $10,000/month trading prop firms with step-by-step math and risk management.
Key Takeaways
- You don't need to win every trade; a 33% pass rate is enough to be profitable.
- Strict risk management and consistent strategy application are crucial.
- Scaling multiple funded accounts can multiply profits significantly.
- Understanding and applying expected value and recursion concepts can maximize withdrawals.
- Mental discipline and avoiding tilt are key to maintaining performance on funded accounts.
What the video covers
- A 33% evaluation pass rate is sufficient to generate $10,000 monthly profit trading prop firms.
- The video explains why traders lose money by expecting to win every trade and not managing risk properly.
- Focus on statistical edge and risk management rather than perfect setups or winning every trade.
- Uses Lucid Trading's 50K Flex account as the example prop firm for evaluation and funded accounts.
- Risk management involves risking $500-$1,000 per trade with profit targets around $1,000-$1,500.
- Step-by-step math shows how investing $3,000 in evaluation fees can lead to 10 funded accounts.
- Assuming a 33% pass rate, about 3 out of 10 funded accounts will reach profit targets, enabling withdrawals.
- Recursion and expected value math prove that even break-even trading can extract remaining equity profitably.
- Simulations confirm the model with an expected net profit of about $5,000 per 10-account cycle, scalable to $10,000/month.
- Advice includes sticking to one trade per day per account, avoiding tilt, and treating trading like a business.
Chapters
- 00:00Introduction to 33% Pass Rate and Profit Potential
- 00:41Using Lucid Trading for Evaluation and Funded Accounts
- 01:13Risk Management and Profit Targets Explained
- 01:54Key Statistical Metric: Hit Rate Before Max Drawdown
- 02:36Setting Profit Targets and Avoiding Common Mistakes
- 03:24Expected Outcomes for Funded Accounts and Profit Withdrawals
- 04:11Expected Value and Recursion Explained with Break-Even Trading
- 04:56Simulation Results and Profit Scaling
- 06:32Trading Discipline and Managing Variance
- 09:23Final Thoughts and How to Join Community for Support
Full Transcript — Download SRT & Markdown
Speaker A
But that's just completely untrue. Before this clicked, I was strategy hopping every week, tilting after losses, and not following a strict risk management plan. Nothing worked until I stopped asking myself, "What's the best setup?" And I started asking, "What is the
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statistical way to beat prop firms?" Now, I'm going to prove to you exactly why this 33% pass rate can make you $10,000 a month and show you how you can turn $500 into $13,500 trading on prop firms.
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I'm going to give you a step-by-step guide on exactly how the math proves that this is true. And then at the end, I'll go over what breaks this model. I also have a few simulations that I'm going to show you just to prove that all
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of this math is correct. So, let's get right into it. The only firm that you're going to need for this is Lucid Trading.
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You're going to be using the 50K Flex account for the evaluation. On the left side, you have a 50% consistency rule.
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$2,000 max loss, $3,000 profit target. You can risk about $500 to $1,000 per trade. Profit target about $1,000 to $1,500 per trade. You don't want to be risking too small because the trailing drawdown will eat you up. And you don't
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want to be risking too much because then you're not going to pass it within the consistency rule, and you're going to risk much higher, increasing your chance of blowing the account. On the funded account, get the payout. You need 5 days
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of $150, and you can withdraw 50% of your profit up to $2,000. The risk management on the funded account is going to be the exact same as the evaluation account. Risk $500 to $1,000 per trade. Profit target $1,000 per trade. So
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now I'm going to show you the math to exactly why this works. My math here is to make $10,000 and it's going to be using a $3,000 investment. If you have less money, do the exact same thing, but
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risk less on funded accounts and less on evaluations and scale that. You want your risk of ruin to be lower, so you want to risk less if you have less money to invest. The only required edge is a
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33% pass rate on the EVALs, meaning a 33% chance to reach plus $3,000 before minus $2,000. This is the only stat to backtest as well. Do not bother backtesting your live equity curve. That's not going to
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matter because we're trading on prop firms. All we need to know is the hit rate of the profit target before the max drawdown. So, how many times you can win before you lose on the eval. That's all you need to backtest for. By the way,
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if you skip the math part, it's not going to make a lot of sense. I'll make it very simple, so just stick with it.
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Step one, buy in 10 evaluations and turn that into 10 funded accounts. If you have this 33% pass rate, that means it's going to take on average three attempts to pass each evaluation. 10 evals with three attempts means 30 total attempts.
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If it's about $100 each, that's $3,000 in total expenses. You can reset your failed evals until they pass. So, your end state is 10 funded accounts. I'll tell you the exact five firms I run this on later to scale, but for now, Lucid's
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going to be enough. Step two, set the target. You need to make $10,000 in profit, which means you have to withdraw $13,000 to net $10,000 if you spend $3,000. Here's where 90% of traders blow it. They pass the evaluation and then
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they treat the funded account completely differently. At most, you're going to see a 10% drop in performance, but I'll go over how to fix that. So, the hardest part here is going to be applying your same evaluation edge to your funded
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account. If you can pass evals at 33%, meaning you hit plus $3,000 before minus $2,000 on an eval, if you do the exact same thing on funded account, then you're going to be doing extremely profitable on prop firms. So, if we
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assume you lose about 3% of your pass rate just because of the mental pressure from trading this real capital, this brings us down to about a 30% success rate to reach plus $3,000 before losing your funded account. So, this means 30% of 10
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funded accounts is three funded accounts that reach plus $3,000. Now, we're on step four. We're assuming that three out of our 10 funded accounts hit the profit target that we set of $3,000. So now we have $9,000 of prop firm capital. On
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each of these three accounts, you have to get your five winning days of $150 and then you can withdraw 50% of your profit. So we're going to look to withdraw $1,500 and leave $1,500 in the account. After doing so for three
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payouts, we will have $4,500 withdrawn. That's profit that gets sent to our bank account. They do have a little bit of a profit split, though. Remaining in your accounts will be three sets of $1,500 because we took out half, which is $4,500
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in equity. This next part might sound too good to be true, but there's recursion that proves it, so stick with me. Step five, we have to extract the remaining equity from our account. The $4,500 sitting in your accounts has an
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expected value of $4,500. If you trade break even, which should be worst case if you're following my mean reversion strategy, you can get plus EV following it, but for this math, I'm going to assume worst case we are a break-even
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trader. Here's a little bit of math to prove it. If you have an account with a $1,000 buffer and you do a plus or minus $1,000 trade with a 50-50 win rate, meaning you're flipping a coin and you
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take a $1,000 payout every time you win, your expected value is a 50% chance to make $1,000 of that payout plus the recursion because you're coming back to the starting state of that $1,000 buffer if you take the payout plus a 50% chance
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of making nothing gives you an expected value of $1,000. You could also just simply say 50% chance I make $1,000 and withdraw it. 50% chance I lose the $1,000 buffer. The recursion closes because every win returns you to the
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starting state of expected value, meaning you're back to your $1,000 buffer. And again, this is with break-even trading and a payout on win because you're extracting the full equity in your expectation throughout the lifetime of your account. You should definitely
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use your highest EV strategy here. I recommend mean reversion. That way, you can pull out the remaining $4,500 from your account. So now I'm going to go over a little bit of statistics to prove that this is true through my simulation and
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then we'll get into how we can scale this. Over here on the left I have all of the different inputs that I just mentioned. And when I simulate it, you can see your total eval attempts gives a normal distribution about 29 to 30 evals.
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So 30 evaluations as I mentioned earlier gives you a total of about $3,000 spent on evals on average to get your 10 funded accounts. Obviously, it can be less and obviously it can be more, but on average is what we're here for. So,
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about $3,000. Same thing for the successful funded accounts. We have a 30% hit rate on the funded accounts. So, pretty much it's going to look like three funded accounts reaching that $3,000 profit target that we set ourselves. Now, your net P&L is going to
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be the total amount of profit you withdrew minus your EVAL expenses. And this is centered about $5,400 of profit per 10 account cycle. There are some statistics down here as well.
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You can pause and take a look at all of these, but the most important thing to notice is your expected fee is $3,000 and your expected profit is $5,000, meaning you withdrew $8,000 after profit split. So, we're up $5,000 from this
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whole process. And with $5,000, if we do it twice, that makes $10,000. Step six, we need to tally the first month.
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Remember, we just withdrew the remaining $4,500. So, we spent $3,000. We withdrew $9,000 because we had $4,500 in payouts from the first week and then took another $4,500 from extracting the remaining expected value in our accounts over the lifetime of the...
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that will give you net $5,100 in profit. Once you understand all of this, this exact method will be used to make up to $27,000 a month if you're using five pro firms at once. So, I'll show you which
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ones to use at the end. Step seven, literally just repeat exactly what you did the first month on the second month.
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Same cycle, same numbers, but you will now be net $10,200 in profit. At the end, I'll show you exactly what can break this model and then how you can avoid that as well. Step eight, realize the compounding path. This 33% pass rate
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produces about 3x per cycle because we invested 3K and we took out 9K. So, if you have $500, one cycle of this can become 1,500, which then becomes 4500, which then becomes 13.5K. And from then on, you can scale this as much as you
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want. Step nine is scaling to multiple firms. Once you're past $10,000, layer in more firms and take the exact same rule set. All of these have pretty much the exact same rule set. I recommend doing the My Funded Futures Flex 50K,
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Topstep Standard 50K, Alpha Futures Premium 50K, and Tradeify Select 50K. Again, you can use my code JJ to get the best discount on all of these firms.
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Now, what can break this model? Well, five main things that are going to break this model. The first one obviously is tilting. You need to understand to realize expected value. You cannot tilt.
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You have to place stick to one trade per day on each account. And do not tilt. If you lose going for a winning day, no matter what, wait until the next day to take another trade. It is more expected
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value if you wait. Also, do not copy trade. Copy trading is going to increase your variance like crazy. There's no reason you should ever be copy trading if you have less than $10,000 to invest in prop firms because that is going to
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increase your risk of ruin so significantly to where the prop firms are going to make so much money off of you. It is a very very large lie in the industry. Lots of gurus are copy trading just because they have a lot of capital
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to invest. But if again if you have less than $10,000 please do not copy trade.
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Your variance will be so high you're not going to be able to realize your expected value if you lose everything.
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Also if you ignore your winning days this is not going to work. You have to realize that you need $150 to get a winning day. If you get less, it doesn't count. If you get more, it does count.
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But remember that you need five of them to get to the payout. Also, treating prop firms like the lottery is 100% going to break this model. Another reason why prop firms are so profitable and they make so much money is people
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think that one or two prop firm accounts are going to make them $10,000. It's just extremely statistically unlikely that you need to understand we're playing the long game. We're playing the expected value of our accounts. You have to understand that in the long run,
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we're treating it like a business where we invest a set amount of money and you're going to get a set amount of money in return. Obviously, all of this you should be able to simulate yourself.
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First of all, by finding your pass rate. Second of all, by doing a little bit of math, maybe asking AI to help you just confirm that you are a profitable trader on prop firms before you even purchase them. Lastly, not understanding how end
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of day draw down works and not understanding the rules. For example, if you make more than $1.5,000 on an eval, then you're breaking the consistency rule. You're going to have to make even more. So, before you even start your
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first prop firm challenge, please read through the help center, find out if they have any rules that you don't know about. They make the rules so that they can make money. So, you need to understand what are all of the things
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restricting you from making money. So, go through all of the rules and make sure you don't break any of them. So, if you want to see other traders running this live, go ahead and join the free Discord in the description. Again, it's
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completely free and you can work with other people who are going to be trying this exact $10,000 a month challenge. Or if you have at least $1,000 to invest and you want me to walk you through this step by step and then help you scale,
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apply for mentorship at the link below. I'll give you statistically optimal risk management as well as my plus EV mean aversion trading strategy.
Topics:prop tradingprop firmsevaluation pass raterisk managementtrading strategyLucid Tradingmean reversionexpected valuetrading simulationscaling trading accounts
