Rule #6: I don’t care anymore – The desperation trade

One of the most dangerous moments in prop trading is when your account balance approaches the maximum loss limit. For example, in the ProTrader account verification with a value of $100,000, this critical moment occurs when the balance drops to approximately $92,000-$93,000. The closer you get to this critical threshold, the greater the psychological pressure—and the more likely you are to make risky decisions that could end up blowing the account. Instead of limiting risk and carefully working to recover losses, traders often fall into a trap known as the “desperation shot.” This is when, instead of calmly resolving the situation, they take on massive risks, hoping for one golden trade to put the account back on track—typically aiming to push the balance back above $100,000.

What is the desperation shot?

The desperation shot is taking excessive risks in the hope that a single successful trade will turn your account around and close the stage. This behavior stems from frustration, helplessness, and fear of failing the stage. Paradoxically, it accelerates the very outcome you’re trying to avoid. The problem is that even if this golden trade succeeds, nothing is truly fixed—it only reinforces harmful risk management habits that, sooner or later, will lead to another loss of control over the account. Over the long term, this approach stifles a trader’s development and becomes a significant obstacle to achieving consistent results.

When the account balance nears the maximum loss limit, traders often switch to "survival mode." The fear of failing the stage makes them resort to high-risk moves to avoid failure. In these moments, logical thinking and patience give way to emotions. You want immediate results—a quick return to safer capital levels. Unfortunately, from a psychological perspective, these decisions are rarely based on analysis or reason and are more often driven by the desire to escape stress and disappointment. That one desperate trade often ends in a loss that exceeds the maximum limit, shutting down the account and ending the stage in failure.

Even when a desperation shot works, it’s an illusion of success. It merely reinforces risky habits that will inevitably lead to similar situations in the future. Trading is a game of probabilities, and entering the market without a plan and under the influence of emotions puts you at a significant disadvantage. This approach can prevent you from becoming a more professional trader, trapping you in a gambling mindset where emotions and impulses outweigh strategy.

Gradual account recovery

Traders who understand the importance of consistent risk management take a very different approach in such situations. Instead of increasing risk, they focus on reducing position sizes and working on gradual account recovery. For example, if the balance has dropped to $92,000, they might aim to bring it back up to $97,000 systematically. Once they reach a slightly safer level, their strategy remains the same—manage risk and recover losses patiently. However, if things go wrong and the balance drops further to $96,000, $95,000, or $94,000, natural stress and decision paralysis may arise. This is where the temptation for a desperation shot reappears, often ending the same way as before—with the account being blown.

The gradual recovery approach requires patience and a cool head, which can be incredibly challenging when emotions take over. However, traders who have mastered risk management understand that this is the only path to long-term success. Every risk must be carefully calculated and aligned with a pre-defined strategy. Even if it takes more time, a stable recovery process is key to avoiding further losses and maintaining psychological balance.

First stage vs. second stage: Why context matters

In the first stage of a challenge, it’s easier to understand why a trader might resort to a desperation shot. After all, if the account balance has dropped by 8%, the trader might think, “It’s better to start over than struggle to recover losses for weeks.” In such a case, deciding to end the stage and try again means zero risk—starting with a clean slate in a new first-stage attempt. This is more logical than making desperate attempts to recover losses with maximum risk, especially if the trader lacks the patience for recovery.

However, the situation is entirely different in the second stage or with a full ProTrader account. In these cases, if the balance drops to $92,000, the decision to fight back to the starting point is more justified. Unlike the first stage, there’s no need to start over or go through multiple stages again—every $1,000 recovered brings you closer to the point where you can start generating pure profit. There’s no need to take excessive risks because every successful trade helps rebuild the balance, and once losses are recovered, you can focus on making gains. On a ProTrader account, every step forward matters and should be treated as part of the process.

To illustrate, if you’ve experienced a drawdown on a ProTrader account, recovering losses brings you back to the starting point, where you can once again withdraw profits via performance fees. Why fight to keep this account? Because if you lose access to it, you’ll face another challenge requiring an 8% profit in the first stage and 5% in the second stage, for a total of 13%. On a ProTrader account, recovering 13% after a 7% drawdown allows you to withdraw 6% as performance fees. However, losing the account means that achieving 13% only brings you back to the starting balance of a funded account.

The desperation shot: A reaction to stress

The desperation shot is a response to the stress of nearing a critical account level. Understanding this behavior can help you better manage your emotions and avoid impulsive decisions.

When the balance drops to a dangerous level, it’s essential to develop a recovery plan. Commit to working slowly, with lower risk, focusing on minimizing losses and rebuilding capital step by step.

Even if you want to recover losses, don’t try to do it all in one trade. Set a realistic goal, like 1% per day, which will allow you to systematically rebuild the account without taking unnecessary risks.

Sometimes, it’s better to accept failure and start over than to fight for survival at any cost. Accepting loss as part of the process helps you maintain balance and prepare for the next attempt without unnecessary emotional baggage.

Discipline is key

Maintaining discipline is the key to success in prop trading. Remember, every step toward excessive risk takes you further away from success. Keep a cool head and stick to your plan, even if it means a slow return to safer levels.

The desperation shot is one of the most common and damaging behaviors in trading, especially when the account balance nears critical levels. The desire to recover losses quickly leads to irrational decisions, often resulting in failing the stage or losing the funded account. Instead of succumbing to impulses, traders should focus on consistent risk management and gradual capital recovery.

In the first stage of a prop trading challenge, it’s somewhat understandable why traders might choose a desperation shot and start over. However, in the second stage or with a ProTrader account, every dollar matters, and rebuilding the account provides an opportunity to continue earning without starting from scratch. The key to success lies in patience and emotional management—trading is a marathon, not a sprint. Remember, effective trading is a process, not a golden shot.