Rule #1: How you start is very important

Who among us hasn’t heard the saying, “It’s not how you start, but how you finish that matters”?

Indeed, the final outcome is crucial, but from my perspective, the way you start can be just as, if not more, important. The start lays the foundation, not only preparing you for the next steps but also shaping your mindset, stress resilience, and approach to challenges. In prop trading, where every percentage of profit or loss carries significant weight, a strong start is an element you cannot afford to overlook.

Imagine two traders, Adam and Jack, beginning the first stage of a verification challenge with the goal of achieving an 8% return.

Adam gets off to a strong start—earning 3% within the first few days. Jack, on the other hand, starts poorly, losing 3% of his capital.

It’s just a 6% difference, but in practice, it means much more.

Adam has a 13% buffer to the maximum loss limit, while Jack has only 7% left. The pressure Jack will face is much greater because every additional losing trade brings him closer to the critical threshold, which, if reached, will result in failing the stage.

Adam, however, with the added safety margin, can remain calm and stick to his plan, even if he decides to take on slightly more risk (which is not necessarily advisable in prop trading). This psychological difference is key—every percentage point in the initial results can determine the direction of the equity curve.

A good start is more than just a financial outcome—it allows you to achieve a state of mind that facilitates rational decision-making. Even a small gain, such as +1% return, can provide a trader with peace of mind and the assurance that their actions are effective. This acts as positive reinforcement—boosting confidence and reducing stress, which is often an unavoidable aspect of trading and is challenging to manage when facing negative results.

When the account is in the black, the trader has the freedom to make decisions in line with their methodology. They avoid the excessive pressure that arises when the balance dips below zero. With each loss, psychological pressure increases, and the larger the drawdown, the greater the risk of switching trading modes and making impulsive decisions. Many traders fail not because of a lack of technical skills, but because they succumb to this pressure.

Every stage in prop trading requires proper mental preparation. Especially at the beginning, it’s essential to demonstrate the highest level of focus and precision in decision-making. A strong start provides psychological comfort, which acts as subconscious support. When the balance is positive, even if it’s symbolic, a thought emerges in the trader’s mind: “This is good; I can continue executing my plan.”

In such situations, it’s easier to maintain calm and focus on the strategy, avoiding impulsive actions driven by negative emotions.

It’s important to emphasize that a good start doesn’t mean achieving spectacular results. Even a modest gain of 1% can bring peace and stability, which will influence subsequent actions. This psychological comfort enables decisions to be made in line with the methodology, without the unnecessary pressure that often arises when the account is in the red.

A trader who starts well is less likely to take excessive risks and is less prone to aggression, which is usually a result of negative emotions. A strong start reduces the likelihood of these emotions arising.

On the path to the goal of achieving the required return, patience and consistency are key factors. Let’s assume a trader has reached 5% of the required 8%. At this point, the most important thing is to remain calm and continue executing the strategy without unnecessary risks.

As traders get closer to their goal, they may encounter various obstacles: suddenly increased market volatility, poor decisions, or periods of inefficiency. The key is patience—with calm risk management, the balance of a trader who has already achieved 5% should fluctuate within the range of 4-6%, until eventually reaching the planned 8%.

Losing patience, however, leads to impulsive decisions and often results in a rapid and significant deterioration in results—which can, in turn, trigger a cascade of mistakes and topple the entire plan like a house of cards.

Imagine a trader who has gradually built up a 5% profit over several weeks through dozens of carefully thought-out trades. If they now, under the influence of impulse, decide to risk 4% in a single setup, they could ruin all their previous efforts. Such risk is like buying a lottery ticket—suddenly, all previous capital management becomes irrelevant because one hasty decision can take the trader out of the market.

Risk management: thecore of prop trading

One of the most important elements of success in prop trading is consistent risk management. Regardless of whether the balance is rising or falling, the principles of risk management must remain unchanged.

Let’s assume a trader risks 0.1% on each trade for 20 days but suddenly increases the risk to 3% on a single trade due to negative emotions. In such a case, talking about risk management becomes pointless. A trader who makes aggressive decisions abandons money management and falls into the trap of emotions.

Money management is not just a critical component of strategy—it’s a mindset that a trader should apply regardless of the outcomes of recent trades. Simply put, even in the face of losses, the level of risk must remain consistently controlled. This is the only way to minimize the negative impact of emotions and make rational decisions that affect long-term results.

A strong start is the foundation of success in prop trading. It’s not just about numbers; it’s about the mindset and attitude that make rational decision-making easier. Every percentage in the black boosts confidence and reduces pressure, which in turn makes it easier to focus on following the principles of your chosen methodology. Maintaining patience, consistency, and fixed rules are absolutely fundamental.

These are the elements that allow a trader to effectively progress through the stages of the challenge and achieve their goals in a sustainable and stable manner.

If you’re ready to start your journey in prop trading—remember, the beginning matters. Pay special attention to it.