Seasonal Factors in Forex Trading - Forex Prop Firm (2024)

FAQs

How many people pass prop firm challenges? ›

The article from Lux Trading Firm provides slightly different results. According to it, 4% of traders, on average, pass prop firm challenges. But only 1% of traders kept their funded accounts for a reasonable amount of time.

If so, then you may have heard about the prop firm challenge. This is a popular way for traders to prove their skills and potentially secure funding from a prop firm. However, passing this challenge can be quite daunting and requires a lot of hard work and dedication.

Seasonality is a predictable change that repeats every year at the same period of time. There is no guarantee that a historical pattern will repeat itself, but whenever a pattern has been repeated 80% to 90% of the time, it becomes statistically significant. That is valuable information for a trader.

There are generally four main trading sessions: the Sydney session, Tokyo session, London Session, and the New York session. Both the Sydney and Tokyo sessions are customarily referred to as Asian sessions. This is why Forex is usually referred to as the 3-session market: Asian, London, and New York.

The FTMO challenge has a reputation for being extremely difficult to pass. Across FTMO's various account levels, it is estimated that only around 10% of traders are able to successfully complete the evaluation and become a funded trader. This means approximately 90% of those who attempt the challenge end up failing.

It is estimated that only 4% of Forex traders succeed with prop firm challenges, and only 1% of traders can generate profits consistently without violating any rules.

In conclusion, it can take around 4-5 months to pass a prop firm trading challenge and become a funded trader. However, it can take much longer than that to become a profitable trader beforehand – which is a necessity.

Trend following is a popular strategy among prop traders because it allows them to ride the momentum of a trend and potentially generate significant profits. However, it is important to note that trends can change quickly, so proper risk management is crucial when using this strategy.

Passing FTMO challenges is not an easy task and it takes time. Take your time and do not rush through it. You have a whole month to complete it, which is usually more than 20 trading days.

There are three common seasonality types: yearly, monthly and weekly. Yearly seasonality encompasses predictable changes in demand month over month and are consistent on an annual basis. For example, demand for swimsuits and sunscreen in the summer and notebooks and pens leading up to the new school year.

What is a simple way to trade seasonality? ›

Sell in May and Go Away: This is a well-known seasonal trading strategy that suggests selling stocks in May and buying them back in November. This strategy is based on the historical data that shows that the stock market tends to perform poorly during the summer months.

What Is Seasonality? Seasonality is a characteristic of a time series in which the data experiences regular and predictable changes that recur every calendar year. Any predictable fluctuation or pattern that recurs or repeats over a one-year period is said to be seasonal.

While the summer period (June-August) is speculated to show the least returns for many markets across Europe, August is said to be the worst month to trade. The reason for this is that most institutional investors in Europe and North America go on holiday.

This makes autumn months one of the best times of the year to trade forex. By the second half of December, trading activity slows down again, much like in August. The few weeks before and after Christmas are the slowest, and it's not until mid-January that the markets start to pick up again.

The London - New York Overlap (2:30 pm - 4:30 pm GMT) The European - US overlap is often considered to be one of the best times for trading forex.

There is estimated to be a 90% fail rate of traders that take the FTMO challenge. The reason behind this is due to traders chasing the profit target with a time restriction in place.

The Success Rate Of Prop Firm Traders

We can then conclude that there is only about a 5% success rate among prop firm traders.

Apart from only 10-15% of all traders passing prop firm challenges, only about 1-2% of these traders get to keep their funded accounts for a reasonable amount of time.

Account Funding and Scaling

Upon successfully passing a Prop Firm Challenge, traders may be required to fund their trading accounts with an initial amount. The firm may also have scaling plans that determine how much capital traders can access based on their performance.