Last updated on July 20th, 2025 at 03:38 am
The funded account challenge has gained massive popularity in the last few years. As a matter of fact, prop account challenges are a great way for traders to gain trading experience and earn more income once they prove themselves to be skillful traders. While the trading challenge is a good way to earn money, as an aspiring trader, you are prone to make a few mistakes that are quite common for newbie traders.
To help you navigate the landscape of the funded account challenge, we have jotted down four mistakes that you should avoid to increase your chances of trading success.
The Mistake of Leveraging Too Much
The first mistake that you must avoid when trading with Forex prop firms is leveraging too much. Also known as overleveraging, this mistake is about borrowing too much money from the potential broker for trading purposes. Overleveraging has the benefit of helping you multiply your returns or profits, too. The downside of this is that it can multiply your loss, too. If the loss is too much, it can cause your trading account to get wiped out. To avoid this mistake, you should be mindful of how you manage your risk.
The Mistake of Emotional Trading
Another common mistake that many aspiring traders make is the mistake of giving in to their emotions. As a trader, you should never give in to your impulses and start chasing the market. Also, don’t commit the rookie mistake of jumping into a trade without having a clear strategy. Traders who make the mistake of chasing the market revert to impulsive or emotional trading, which can result in serious losses.
To avoid this rookie trading mistake, you should have a tested trading plan ready. Make sure to test the trading plan in various market conditions. Stick to the trading plan after you have tested it.
The Mistake of Not Managing Risk
Successful traders do understand the importance of effective risk management. If you are trading with a funded account, you must learn the art of using stop-loss orders with the use of proper position sizing. Traders who don’t focus on managing risks incur bigger losses, to the point of wiping out their trading account completely.
To avoid this mistake, make sure to use stop-loss orders. Simultaneously, consider the risks that are involved in each of your prop firm trades.
The Mistake of Over-Trading
The fourth common mistake that you must avoid as an aspiring trader is over-trading. It is easy to get engrossed in trading to the point that traders spend their days and nights obsessing over the trading market. With that said, over-trading can lead to making impulsive or rash trading decisions, which can lead to losses.
Conclusion
The point is that you should always focus on quality trading over quantity trading. Remind yourself to take breaks. Ideally, you should take a break after every two hours. By taking breaks, you will increase your chances of successful trades. Also, with regular breaks, you can avoid getting emotional while making trading decisions.
