**How To Milk Prop Firms For Maximum Value — Transcript & Summary | SozAI**
Source: https://sozai.app/transcript/milk-prop-firms-maximum-value/

Learn how to maximize profitability with prop firms using a business calculator and strategic optimizations from JJ Simon.

## Key Takeaways

- Use a prop firm business calculator to understand and improve profitability.
- Small improvements in pass rate and payout speed can significantly increase monthly income.
- Scaling by trading multiple accounts and frequent trades boosts revenue potential.
- Risk management and avoiding overleveraging are essential to maintain funded accounts.
- Treat prop firm trading as a business with realistic goals and consistent optimization.

## What the video covers

- JJ Simon introduces a prop firm business calculator to analyze profitability and optimize trading strategies.
- The video explains key inputs like payout size, pass rate, account size, and discount codes to improve returns.
- Simon emphasizes understanding drawdown, breakeven points, and payout rates to forecast monthly and annual income.
- He discusses scaling by buying multiple accounts and trading frequently to increase revenue.
- Risk management and avoiding overleveraging are highlighted as crucial for sustaining funded accounts.
- The calculator simulates different payout rates and shows how small improvements can significantly boost profits.
- Simon advises treating prop firm trading like a business and aiming for realistic goals like doubling your money.
- He shares insights on how faster payouts and higher pass rates can double monthly income.
- The video covers how to optimize strategy and risk by small percentages for substantial monthly gains.
- Overall, the focus is on using data-driven approaches and disciplined trading to maximize value from prop firms.

## Chapters

1. 00:00 Introduction to Prop Firm Business Calculator
2. 00:45 Key Inputs: Discounts, Payout Rate, and Account Size
3. 02:14 Understanding Payouts and Break-even Analysis
4. 03:13 Annualized Income and Simulator Overview
5. 06:15 Optimizing Pass Rate and Risk Management
6. 07:40 Doubling Monthly Income through Strategy Improvements
7. 10:24 Final Thoughts: Treat Prop Firms Like a Business

Answers

## Questions about this video

What is the main purpose of the prop firm business calculator?

The calculator helps traders understand their total profitability on prop firms by analyzing inputs like pass rate, payout size, and account costs to optimize revenue.

How can traders increase their monthly income with prop firms?

Traders can increase income by improving pass rates, speeding up payout times, managing risk effectively, and scaling by trading multiple accounts frequently.

Why is risk management important when trading funded accounts?

Risk management is crucial because losing the maximum allowed drawdown results in losing the funded account, so controlling risk preserves capital and trading opportunities.

## Full Transcript — Download SRT & Markdown

00:00

Speaker A

What is up, everybody? I wanted to make a video on a prop firm business calculator that I use and you can use as well to understand your total profitability on prop firms, as well as slight things you should increase to increase your revenue.

00:12

Speaker A

slight things you should decrease different ways you should be trading all that sort of stuff. So we're really going to dive into the math here based on specific rates that you can achieve in terms of your pass rate payout rate

00:22

Speaker A

Slight things you should decrease, different ways you should be trading, all that sort of stuff. So, we're really going to dive into the math here based on specific rates that you can achieve in terms of your pass rate, payout rate,

00:28

Speaker A

basically whatever you want to achieve with proper. So let me just start by going over the sheet that I have here.

00:33

Speaker A

payout size, how many accounts you buy, and all that sort of stuff until how you can turn that into consecutive 10k a month, 20k a month, 30k up to 100k a month.

00:45

Speaker A

a better discount uh might be like 80 or $90. Payout rate is 33%. So basically how many of your funded accounts get to the payout and then average payout size obviously it's just the average payout size. Right now it's at 4% to 50k. So,

00:57

Speaker A

Basically, whatever you want to achieve with prop firms. So, let me just start by going over the sheet that I have here.

01:09

Speaker A

because you have $2,000 worth of draw down. So, over the lifetime of your account, you can expect to get about $2,000 back from it. If you have a break even win rate, then minus 2,000 plus 2,000 on average, you'll win that.

01:19

Speaker A

First is the database inputs: obviously, how many accounts you buy, how many you pass, which is eval pass rate. Account size just means you buy a 50k account. The cost is just $100. If you use code JJ with all the firms, that should give you

01:28

Speaker A

less return. So I do shoot for a bit more just to get a larger payout. So that's all the inputs and the outputs.

01:34

Speaker A

a better discount. It might be like 80 or $90. Payout rate is 33%. So basically, how many of your funded accounts get to the payout, and then average payout size, obviously, it's just the average payout size. Right now, it's at 4% to 50k. So,

01:38

Speaker A

Here's how much you spent. Here's how much you got in terms of a payout.

01:41

Speaker A

it's just $2,000. Months to payout basically means you buy an eval on day one, then 31 days from now or 22 trading days from then, you will get your first payout. Payout size of $2,000 on a 50k account is a pretty good amount just

01:51

Speaker A

$2,000 to break even which should be pretty easy, right? If you have 100 attempts to get a payout, you only need five of them to break even. So, should be pretty easy. Revenue multiplier just comes from this over here. Expected

02:02

Speaker A

because you have $2,000 worth of drawdown. So, over the lifetime of your account, you can expect to get about $2,000 back from it. If you have a breakeven win rate, then minus 2,000 plus 2,000 on average, you'll win that.

02:13

Speaker A

then annualized income is just this number here multiplied by 12. Lastly, the simulator will go over different payout rates and how much that's going to make you per month. And this is just a graph of this. All right. So, now that

02:23

Speaker A

You'll get up to plus 2,000 50% of the time if you're a breakeven trader. So, but from there, you can only withdraw $1,000. So it does change it to a little bit more like this, and that's obviously

02:33

Speaker A

can scale this up or down based on how many accounts you're willing to buy. If you have a $1,000 bank, then obviously 10 accounts, right? And you can expect to make $2,178 back from this expense.

02:44

Speaker A

less return. So I do shoot for a bit more just to get a larger payout. So that's all the inputs and the outputs.

02:50

Speaker A

You're not going to be able to spend $1,000 and get back $25,000. It's just completely unrealistic and very, very statistically unlikely. So, that's not something you should shoot for. You should aim to at least double your money. That is an insane investment. But

03:02

Speaker A

Obviously, the results you get 33 funded if you buy 100 and pass one-third of them.

03:13

Speaker A

about doubling your money. I would even complain about 1.3xing my money. If I can spend 100k and withdraw 130k, sure it's a lot of spending, but I'm still making $30,000 a month, right? Like I mean, that's amazing. It's $360,000 a

03:25

Speaker A

Here's how much you spent. Here's how much you got in terms of a payout.

03:39

Speaker A

hit your plus 3,000 target, you pass. Same thing on funded minus 2,000 plus 3,000. So, if you have the same strategy, the same risk, same execution, then 33% of the time you'll make $3,000 in your funded account because you're

03:52

Speaker A

There's your profit. There's your return. And this is how much you're going to make per month. Over here, we have business analytics, which are important factors to understand your breakeven payout. So if you buy 100 evals, then you need five payouts of

03:59

Speaker A

And average payout size, like I said, we'll do $2,000 because if you make $3,000, you can withdraw half, more winning days, withdraw half, that sort of thing. So, it should be pretty easy to get at least $2,000 back from an

04:11

Speaker A

$2,000 to breakeven, which should be pretty easy, right? If you have 100 attempts to get a payout, you only need five of them to breakeven. So, should be pretty easy. Revenue multiplier just comes from this over here. Expected

04:17

Speaker A

You could technically get like a discount and then bring this down to 90. It makes you an extra $1,000 a month. So technically, it's not bad, but that's over a bunch of purchases. Now, let's look at the average months to pay out. A

04:26

Speaker A

value means if you spend 100, then you're going to make 117. So, we'll take that 217. So, 117 is the profits. Plus per account is your cost to achieve a funded account. Basically, three attempts of $100 gives you $300. And

04:36

Speaker A

full cycle. Faster you make that, the faster you're going to make money, right? So, watch your monthly income when I cut this in half.

04:43

Speaker A

then annualized income is just this number here multiplied by 12. Lastly, the simulator will go over different payout rates and how much that's going to make you per month. And this is just a graph of this. All right. So, now that

04:51

Speaker A

And personally, I'm taking like 20 to 30 trades per day instead of most people who take 20 to 30 trades in a month. So, if I am faster, that is 100% going to allow me to get more money per month as

05:01

Speaker A

you have all of the understanding of how the calculator works, let me get directly into how it can make you more profitable on prop firms. First, I'm just going to start with all of the inputs. Obviously, the first one, you

05:11

Speaker A

And then on top of that, I don't even need to copy trade. If I have 30 accounts and I take 30 trades per day, that's one trade on every single account. And if you're able to take one trade on every single account, you're

05:19

Speaker A

can scale this up or down based on how many accounts you're willing to buy. If you have a $1,000 bank, then obviously 10 accounts, right? And you can expect to make $2,178 back from this expense.

05:30

Speaker A

in a row, I don't really care. I'm just going to trade the next account. And I'm never over risking, never overleveraging because I'm not copy trading. So, it really simplifies the psychology and it really speeds everything up when I'm

05:40

Speaker A

And then if you want to scale it back up to 100, just a bunch more accounts, a bunch more return. It's really important that you treat prop firms like a business.

05:43

Speaker A

So, these are most of the inputs. Now, let me show you what a slight optimization does. So, right now, I'll change it back to well, we'll keep it at we'll keep it at 0.5 because that's it's pretty achievable to to do it within two

05:53

Speaker A

You're not going to be able to spend $1,000 and get back $25,000. It's just completely unrealistic and very, very statistically unlikely. So, that's not something you should shoot for. You should aim to at least double your money. That is an insane investment. But

06:02

Speaker A

Okay. Wow. Now, you're making $3,000 more. Let me add that same 2% to the payout rate because remember pass rate can be the same as payout rate another $3,000 more. So if you do a 2% increase on your pass rate just through whatever

06:15

Speaker A

there's no way you should ever complain about doubling your money in a month. If I was able to double my money in a month, I'd make infinite money except for the problems are cap. But, but you get the idea, right? Don't complain

06:29

Speaker A

increase it more, go up to like 40% or whatever, obviously numbers are going to get extremely extremely crazy, right?

06:34

Speaker A

about doubling your money. I would even complain about 1.3xing my money. If I can spend 100k and withdraw 130k, sure it's a lot of spending, but I'm still making $30,000 a month, right? Like I mean, that's amazing. It's $360,000 a

06:41

Speaker A

Now, this all assumes you treat the EVO and the funded account the same. Technically, that's not optimal. And the reason for that is the EVA. All you need to optimize for is your pass rate. I don't care what your win rate is. I

06:50

Speaker A

year from obviously a lot of spending, but maybe because I'm credit card points as well. And for the pass rate, I'm going to correlate the pass rate to the payout rate for this video. Basically, if on evals you hit 2,000 plus 3,000,

07:00

Speaker A

much as you possibly can. That is going to increase your expected value because you're getting there for cheaper. So, you're getting cheaper funded accounts basically. And over the long run, it's going to save you a bunch of money. Like

07:09

Speaker A

if you hit your plus 3,000 target, you pass. Same thing on funded minus 2,000 plus 3,000. So, if you have the same strategy, the same risk, same execution, then 33% of the time you'll make $3,000 in your funded account because you're

07:21

Speaker A

can optimize it. You can increase your funded account rate. And that's either increase your average payout size or increase your payout rate. Since they're inversely correlated, you can increase one of them. The other one will decrease a little bit, but you can increase one

07:33

Speaker A

giving yourself the same real set across both. It's not optimal. So, I'll get to that in a second, how you can make that more optimal, but it's just not optimal.

07:45

Speaker A

So 30% of a $2,000 payout. Increase the payout size or increase your percentage. That is your whole goal is to increase these two numbers. Increase them both.

07:52

Speaker A

And average payout size, like I said, we'll do $2,000 because if you make $3,000, you can withdraw half, more winning days, withdraw half, that sort of thing. So, it should be pretty easy to get at least $2,000 back from an

08:01

Speaker A

you're optimizing for your pass rate so two very different things if you're doing the same thing on both then obviously it's not optimal already so that exists already some increase to your monthly income if you are able to

08:12

Speaker A

account at $3,000 that is a funded account. And average account size is just going to stay 50k. Cost will stay at 100. You can't really change that.

08:25

Speaker A

right? And it's a pretty good monthly increase. Increasing your payout rates and average payout size is more important than increasing your eval pass rate because the funded account is worth three times as much if you pass about one out of three evals. Another tip I

08:37

Speaker A

You could technically get like a discount and then bring this down to 90. It makes you an extra $1,000 a month. So technically, it's not bad, but that's over a bunch of purchases. Now, let's look at the average months to payout. A

08:49

Speaker A

firm. With a prop firm, your goal is to have this payouts be bigger than this expenses and you need to optimize for your pass rate and then you need to optimize for these two values right here. On a live account, you don't on a

09:03

Speaker A

lot of people don't understand what this really means, but if you're spending an eval, you're buying eval on day one. A month from now, you're going to get your payout of $2,000 and then realize the expected value of your account in its

09:15

Speaker A

is proper make money when people fail challenges. They have money in when people fail and they pay out winning traders. So prop firms want you to lose so they can make money. They don't copy trade. They don't book your trades or

09:25

Speaker A

full cycle. Faster you make that, the faster you're going to make money, right? So, watch your monthly income when I cut this in half.

09:33

Speaker A

Rules are structured so that everyone who's back testing and optimizing strategies for live accounts, which is like the majority of the trading market is live accounts. They tried that on a prop firm. It can't work. The prop firm

09:43

Speaker A

There we go. We exactly doubled the monthly income right here just by getting to the payout double as fast.

09:53

Speaker A

approvals. That means you either need to change your strategy or you need to change your prop firm approach. There's a bunch of strategies that work on prop firms but don't work on a live account because of how their risk-to-reward is

10:03

Speaker A

And personally, I'm taking like 20 to 30 trades per day instead of most people who take 20 to 30 trades in a month. So, if I am faster, that is 100% going to allow me to get more money per month as

10:08

Speaker A

If you have a $2,000 draw down, you could have a very good positive equity curve. But if you ever have drops that are more than $2,000 in your positive curve over time, you're going to lose on funded accounts. On a live account, you

10:19

Speaker A

long as all of my trades are still following those same statistics. So, I decided to build a strategy that would trade at every single session and that had multiple entries throughout the sessions. That's just what I personally found was best.

10:24

Speaker A

On a funded account, though, if you ever lose 2K, you lose your accounts and you're gone. So, you can decrease your chance of hitting the max loss through a few different ways, but most importantly is risk management and strategy. Let's

10:34

Speaker A

And then on top of that, I don't even need to copy trade. If I have 30 accounts and I take 30 trades per day, that's one trade on every single account. And if you're able to take one trade on every single account, you're

10:43

Speaker A

to be making money on prop firms if you have the right statistics here, here, and here. Now, basically, the whole point of this video is to make you understand. First of all, please stop treating them like live accounts. It is

10:54

Speaker A

probably never going to tilt. And you're able to decrease variance, but keep the exact same expected value across all of your trades instead of copy trading. So just something I decided to do, just do one account at a time. If I lose three

11:06

Speaker A

analytics business calculator in the name. It's because you're looking to spend $10,000 and you're looking to get back more than $10,000. Every time you spend 10K, if you were given back $11,000, how many times would you take that offer? Literally as many as you

11:20

Speaker A

in a row, I don't really care. I'm just going to trade the next account. And I'm never over risking, never overleveraging because I'm not copy trading. So, it really simplifies the psychology and it really speeds everything up when I'm

11:30

Speaker A

be true. And you obviously can't tilt. So hopefully this also explains to you how important not tilting is because if you ever tilt and you blow multiple like if you blow three accounts or if you blow two accounts, even if you blow two

11:41

Speaker A

able to trade all of my accounts every single day for the exact same return.

11:54

Speaker A

50k accounts, which I don't, I do about 0.75, so it's about three weeks from eval to getting a payout. uh I can buy 100 per month, 33% pass rate, 50% payout rate. And so I have optimized the strategy where I'm really aggressive on

12:06

Speaker A

So, these are most of the inputs. Now, let me show you what a slight optimization does. So, right now, I'll change it back to, well, we'll keep it at, we'll keep it at 0.5 because that's pretty achievable to do it within two

12:19

Speaker A

quick to reduce this. I trade the fund. It's slower which slightly increases that but it has the payout rate going up more than the months of payout going down would impact me. So basically this is just like a really long formula of

12:36

Speaker A

weeks, if you have a good fast-acting strategy. So, we're making $23,000 a month, which is great. Now, let me add 2% to the pass rate.

12:46

Speaker A

need to make actual contribut large contributions to your investment. Even start with $1,000. You can get insane returns from $1,000 if you have good statistics. 33% tax rates, 10 accounts, you'll do 100 into 2.5K. You'll turn 100 into 2200 in 3 weeks. Then you have

13:02

Speaker A

Okay. Wow. Now, you're making $3,000 more. Let me add that same 2% to the payout rate because remember pass rate can be the same as payout rate. Another $3,000 more. So if you do a 2% increase on your pass rate just through whatever

13:14

Speaker A

accounts, which are going to cost more. But all of that should make sense. Hopefully the video helped you understand why Proper should be treated like a business. Why it's totally fine to lose way more than you win. I don't

13:24

Speaker A

making the strategy 2% better, making your risk 2% better, you're going to add $5,500 of monthly.

13:36

Speaker A

course, no one's ever seen that because it is statistically impossible. So, make sure you back test, find your pass rate, and then from that, you can probably infer your payout rate pretty correctly, and all of the other statistics are

13:47

Speaker A

already given. So, at the end of this video, I want you to back test your strategy. Find your exact pass rate.

13:51

Speaker A

Stop back testing for a live account. Only back test as if you were in a prop firm challenge. If you're going to trade on live, then sure, back test it for a live account. But if you're going to

13:59

Speaker A

trade on prop firms, which most of my audience probably is, there's no reason to be back testing just for your equity curve. Literally none. access for your pass rate and then you'll instantly know, okay, if I replicate that again,

14:10

Speaker A

then I will be profitable and my $10,000 investment is expected to turn into about $21,000. But I hope that was helpful. You should treat them like a business. You should optimize for this.

14:20

Speaker A

Then you should optimize for payout rate and average payout size. And then you can see increasingly larger monthly returns as you reinvest and as you improve your rates across the

Topics: prop firm trading profitability business calculator funded accounts pass rate payout rate risk management scaling trading JJ Simon trading strategy


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