Preparing for the FTMO challenge is a critical step in becoming a profitable trader. While some YouTubers showcase passing the challenge within a few hours, it’s important to remember that consistency is key to long-term success. In this blog post, we’ll explore how to develop a strong FTMO challenge strategy to prepare you for trading success.
Consistency is Key
Before we dive into specific strategies, let’s reiterate the importance of consistency. Trading every day with a certain target or maximum drawdown, which prop trading firms will set up for you, is crucial to your long-term success. It’s not about getting lucky with a few trades, but rather building a sustainable trading system.
FTMO Challenge Strategy: Record Your Trades
One of the best ways to improve your trading skills is by recording your trades. By doing so, you can go back and review your mistakes, identify areas of improvement, and optimize your strategy. Plus, it can help you avoid making the same mistakes in the future.
Develop a Risk Management Plan
Risk management is an essential aspect of any trading strategy, and the FTMO challenge is no exception. Before you start trading, it’s crucial to develop a risk management plan that includes your maximum daily loss, maximum loss, and target profit. These parameters will help you manage your risk and avoid blowing your account.
FTMO Challenge Strategy: Trade According to Currency Strength
When it comes to trading, currency strength is a crucial factor to consider. By using a tool like the Forex Profit Supreme Meter, you can identify which currencies are the strongest and weakest. This information can help you make more informed trading decisions and increase your chances of success.
Use Fibonacci Retracements
Fibonacci retracements are a popular technical analysis tool that can help you identify potential support and resistance levels. By using these levels in conjunction with currency strength analysis, you can increase your chances of success.
FTMO Challenge Strategy: Stay Focused and Avoid Emotions
Trading can be an emotional rollercoaster, but it’s essential to stay focused and avoid letting your emotions dictate your trades. Greed and fear can lead to irrational decisions, so it’s important to stick to your trading plan and not deviate from it.
The FTMO Challenge Strategy
The FTMO Challenge strategy requires a disciplined approach to trading. Once you grab your profits, it’s important to forget about it and not get into the same direction because the move is already gone. To identify potential trades, the strategy involves using specific indicators, including the Fibonacci retracement, Forex Profit Supreme Meter, and 20, 100, and 200 Moving Averages.
To use the Fibonacci retracement, you need to take the retracement after the first move. This technique is explained in detail in the Live Forex Trading course, which you can access for a discount using this link.
The Forex Profit Supreme Meter is another important indicator in this strategy. You can download it for free using the link below. The indicator helps identify potential trades by measuring the strength of the currency pair.
The daily chart is also crucial in this strategy. You need to look for confirmation on the daily chart to confirm a potential trade. Additionally, the 20 Moving Average is used to help identify potential trades. If the price is below the 200 and 100 Moving Averages, you should consider selling. The 20 Moving Average is also used to identify potential trades, as a break below it can increase momentum.
FTMO Challenge Strategy: FTMO Challenge Example
To demonstrate the FTMO Challenge strategy, let’s take a look at a recent trade. The trader identified the GBPUSD pair as the best pair to trade based on the indicators. On the second day, the trader took a small loss, which is normal in trading. However, the trader minimized their losses and continued trading.
On the third day, the trader identified a strong Aussie against the Euro and took a short trade. They placed a Stop Loss above the tops and a Take Profit above the support level. The price went in the trader’s favor, and they minimized their loss to just $12.71 before the market hit their Stop Loss.
The trader achieved their profit target of $500 in just 3 days, surpassing the objectives of profit and maximum loss. The trader also had an average reward risk ratio of 3.01 and a Profit Factor of 4.01, indicating profitable trading.
Tips for Successful FTMO Challenge Trading
To achieve successful trading in the FTMO Challenge, there are some tips you can follow:
- Follow a disciplined approach to trading
- Use specific indicators to identify potential trades
- Minimize your losses and take profits
- Look for confirmation on the daily chart
- Keep an eye on the 20, 100, and 200 Moving Averages
- Take advantage of free resources and educational materials
FTMO Challenge Strategy: Trade Selection
To start off, it is important to select the right trades. In this strategy, we avoid trading Swiss pairs, especially Swiss Yen, and instead focus on the EURJPY pair. We make this decision based on the Forex Profit Supreme Meter, which indicates that the Euro and Swiss are on the top while the Yen is the weakest. We buy EURJPY, which is the strongest at the time of the trade.
Risk Management
We place our stop loss just below the recent lows, and our take profit way higher, at 146.95. This decision is based on three reasons: the counter trendline on the daily chart, the zone of resistance, and the desire to have it below the 147 roundish number. Our risk is 124.77, which is just above 1.2%. We execute trades on M1 but always look at the higher time frames.
FTMO Challenge Strategy: Analysis on Higher Time Frames
We perform our analysis on higher time frames, specifically the daily and M15 charts. From there, we observe a series of higher highs and high lows on the daily chart, and a very good momentum from the trading session on Friday on the M15 chart. We notice that the price is already above the 20 Moving Average on daily charts, as well as the 100 and 200 on M15. We keep a close eye on the moving averages, as they are crucial indicators for our trades.
Improving the Average Price
After a great reversal in the market, we open a second trade to improve our average price. We keep our stop loss at a safer place and place our take profit at 146.65, which is below the top of the most recent move or below the highest point of the London session. We take profit manually at a point where we notice resistance in the market.
FTMO Challenge Strategy: Closing Trades
We close our trades manually several times due to strong resistance in the market. When we notice that sellers are stronger, we exit the trade and take our profit and are very happy with the session because we achieve our target without any losses. In the trial period, it is important to prepare as if it were an actual funded account and to spend longer if necessary.
Conclusion
In conclusion, achieving the 5% target in the FTMO Challenge is possible with the right trading strategy. It is important to select the right trades, use proper risk management techniques, perform analysis on higher time frames, improve average price, and close trades manually when necessary. By taking the challenge seriously and mastering your trading system, you can pass the FTMO Challenge and move on to trading with a funded account.