Discover proven prop trading strategies to maximize profits in forex. While proprietary trading creates opportunities to manage bigger capital, traders are required to follow strategies, rules, and a proven plan to succeed. Ultimately, these practices help manage risks, prevent drawdown breaches, and avoid major losses on funded capital. If you’re a beginner looking to start a prop trading career, carefully analyze markets to choose a strategy best suited for your goals. With the right approach, you can enter and exit the market at the right time – eventually increasing your payouts. Plus, a carefully selected strategy can also help complete the prop firm evaluation without breaching any rules.
>> A global leader in proprietary trading, Funding Traders accepts a variety of forex strategies. Traders are even encouraged to diversify their trading plans, algos, and strategies to earn profits during changing market environments.
Read on for the best trading strategies you can employ to increase profit potential in a day trading prop firm.
News Trading
Capitalize on newsworthy events to earn increased profits with prop firms that allow news trading. These high-impact news events can help decide the best positions to open and close positions in forex. You can follow the latest financial news to speculate on a possible market direction for a currency pair in the near future. Once you identify such events, take suitable positions to increase your profits.
Join Funding Traders’ online communities for the latest updates on news, financial reports, and other market events.
- Join Funding Traders On Reddit
- Join Funding Traders On Discord
- Join Funding Traders On Telegram
- Join Funding Traders Online
>> While FT supports news trading, you are required to place strict risk management practices and avoid losses during high-risk events.
Similar to big news events, you can also project profitable positions during small changes to a market’s monetary policies. Even these macroeconomic events can notify the right time to buy or sell an FX pair. Indeed, news trading is one of the profitable proprietary trading strategies for a bigger earning potential.
Swing Trading
Join a prop firm for swing traders to implement a profitable strategy in forex. With swing trading, you hold positions for multiple days or weeks – until a positive trend lasts. These longer positions are opened to capture a favorable price movement over a certain period. Take advantage of technical analysis tools to decide entry/exit points for your trades and capitalize on short to medium-term gains.
>> Swing trading is a reliable strategy for busy professionals looking to avoid monitoring charts every day. Even if you do not watch the market round-the-clock, you can capture significant price movements.
Most swing traders also accumulate profits from multiple small trades over a period of time. Since profit margins are lower than 10%, prop firms also require you to place strict stop-loss orders (under 2%) to limit drawdowns on each opened position. Indeed, swing trading is among the proven strategies to get bigger profits through prop firm payouts.
Forex Scalping
Scalp forex pairs with prop trading to profit from the smallest price movements in a shorter period. Typically, this day trading strategy requires you to execute multiple trades and capture the macro-level market movements. Profiting from small price movements, you borrow capital from the broker and only risk a small percentage of the value. You can multiply profits on positive trades. However, these small fluctuations can move negatively as well, causing you to lose the entire position.
Since you’re trading in high volumes, you should employ precise timing, rapid execution, and strict risk management. Additionally, monitor the markets consistently to make strategic decisions rapidly and mitigate major losses.
As a scalper, consider executing trades for the major currency pairs to maximize profits, including:
- EUR/USD
- GBP/USD
- AUD/USD
>> While minor and exotic pairs may showcase better profit potential, your positions are exposed to higher risks. Choose FX pairs with high trading volumes and minimum spreads.
Indeed, join the most legitimate prop firms for scalpers to increase your profits.
Trend Following
Follow market trends to increase your earnings with prop trading firms. With this approach, you need to identify consistent market movements in a particular direction. For better returns, open a trade that aligns with the current market trend. Or, you can enter a position a the end of a trend, going into a new direction. Of course, you can utilize technical analysis tools, algorithmic software, and indicators to identify the most profitable entry and exit points during an ongoing trend.
Keep in mind shorter price movements with random patterns may even lead to unexpected losses. Always follow trend trading during stable market conditions for maximum returns. Plus, implement strict risk management policies to minimize major drawdowns due to sudden price movements. Definitely, following trending price movements is a high-profit prop trading strategy for bigger profits in forex.
FX Pairs Trading
Employ FX pairs strategy to succeed as a prop firm trader. This strategic approach requires you to simultaneously open a short and a long position for two different forex pairs. Over time, you expect to capitalize on differences when prices for these two assets move. Typically, pairs trading is employed during highly volatile market conditions due to its low-risk nature.
Of course, you should carefully analyze the correlation between the two paired currencies to increase your returns. You can only expect a big profit when both assets showcase a positive correlation against historical data. Utilize dedicated automation systems to compute quantitative correlations between two pairs. Ideally, you should pair currencies with a “correlation coefficient” value of +0.80 or above. Indeed, FX pairs are one of the profitable strategies to increase earnings with proprietary firms.
There are several prop firm trading strategies to earn bigger profits. Trade during newsworthy events to capitalize on opportunities even during macroeconomic events. Swing trading is another strategic approach to capitalize on significant price movements over a period – without monitoring markets every day.
If you’re a day trader, consider scalping to open multiple positions throughout the day. Notably, trend following and pairs trading are two approaches that may yield positive results for active traders. Ready to maximize your profit potential? Click here to join the world’s biggest prop firm that accepts multiple strategies.
