Prop Firm Account Rotation Strategy to get payouts

Managing Multiple Funded Accounts: Strategies for Success

HelloTrader

I hope you had an excellent week. In today's newsletter, I want to share my strategy for managing multiple funded accounts and strategically rotating them to ensure a payout.

1. Account Rotation Strategy

See the charts on the dashboard

Gradual Account Activation

  • Monthly Activation: I activate accounts throughout the month to diversify risk. Not all weeks are profitable. Some weeks are very profitable, others flat, others improve, and some are bad.
  • Probability of Profitability: By activating accounts at different times, the chances increase that an account activated, for example, on July 5th, will succeed. If the account survives an average or bad week, it can become funded or reach a payout.
  • Risk Diversification: Rotating accounts avoids concentrating all the risk at one point. Imagine this as sound waves going up and down. If you manage to aim for the rise and survive the fall, your accounts will be funded, and you will receive payouts.

Considerations for Funding Companies

  • Evaluation Time: Companies like Apex and Top Step impose timelines on their evaluations. For example, Apex has psychological deadlines like the 20th or the 5th of each month that do not always align with payout probabilities.
  • Realistic Perspective: Plan for two months to achieve a payout, keeping the drawdown controlled.

2. Risk Increase Strategy

Increasing Contracts

  • Calculated Risk: Another option is to increase the risk and the number of contracts. For example, from June 3rd to June 11th, ES had a gain of 75 points, which could quickly fund an account and ensure a payout within the same week.
  • This method can also blow up the account quickly. However, if your total risk for a $50,000 account is approximately $30 plus the Apex subscription (about $140 in total), you can afford to lose 3-4 accounts to achieve a $2,000 payout. This gives a return on investment of about 4 to 1, which is favorable.

Comparison between Apex and Top Step

  • Apex: Allows a strategy with a higher number of blown accounts due to the low cost and high return on investment.
  • Top Step: Has a lower return value. For every $100 invested, you can receive between $250 and $300. Here, the strategy should focus more on protecting against the daily drawdown, which for a $50,000 account is $1,000 daily and $2000 total.

3. Drawdown and Backtesting

Drawdown Control

  • Example: Using an ES contract, a bad day can generate a loss of $600. With a drawdown of $2,000, it would take three consecutive bad entries to blow an account.
  • Contract Application: In an upward trend, you can apply two contracts to try to quickly fund the account. However, it is difficult to predict trends with certainty. This week, following Jay Powell's statements and the release of CPI, PPI, and unemployment data, a relatively stable week with trend movements is expected.

4. Trading Strategy with NQ and ES in a Single Account

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Stability and Variations

  • More Stable Accumulation: By combining trading with NQ and ES in a single account, we observe a more stable chart with fewer sharp fluctuations. However, there are days when the account could blow if traded with too many contracts.
  • Examples of Critical Days:
    • June 17th: Loss of $500 by trading NQ and ES on the same day.
    • July 5th: Loss of $630.

Comparison with NDX

  • Large Gains in NDX:
    • June 3rd: Coincides with a strong market rise.
    • June 11th: Start of an upward trend in NDX, which stabilizes and accumulates gains in a controlled manner.
  • Strong Market Movement:
    • July 12th and July 11th: Strong rises due to market movements down and then up.

Optimizing Gains and Risks

  • Using Two Contracts: By trading with two contracts in a single account ES & NQ, we can optimize gains. However, it is crucial to be aware that there will be days when the account may blow due to the standard variations of the strategy.
  • Risk Tolerance: If you accept this possibility and are at peace with it, this strategy can accelerate payouts.

5. Analysis of MBT (Micro Bitcoin Futures)

What is MBT?

  • MBT is a microbitcoin futures contract offered by the Chicago Mercantile Exchange market. This contract is interesting because it allows exposure to Bitcoin without having to use dubious exchanges like Binance, which may have closure risks or regulatory issues. With MBT, you trade through a serious and reliable broker.

Current Results

  • Although the MBT strategy has been in place for less than a month, the initial results are promising, with gains of $513 managing two micro MBT contracts. This suggests that adding MBT to your portfolio, whether funded or real accounts, can be a good strategy to diversify risk.

Comparison with Nasdaq

  • Bitcoin often follows different patterns than the Nasdaq. For example, recently there was a sharp drop in Bitcoin due to the massive sale of Bitcoins confiscated by the German Government. These unique movements can offer diversification opportunities that are not correlated with other markets.

MBT for Funded Accounts

  • Many traders don't know that MBT is also available for funded accounts, which can help fund your accounts more quickly. It is important to note that movements in MBT tend to be long, with fewer trades per day, compared to NQ, which can have many trades in a single day.

Trading Strategy for MBT

  • Average Trades: In a month, the average is about 15 trades.
  • Stop Trailing: The MBT strategy uses a trailing stop. When a certain amount of points gain is reached, the stop moves to ensure that you are always in the positive. This is different from ES or NQ, where the trailing stop can be more problematic.
  • Number of Contracts: It is recommended to trade with two micro MBT contracts, but depending on your account margin, you could increase to three or four contracts.

See the charts on the dashboard

6. Recommendations of the Week

  • Positive Release PNL Field for NQ and ES: The strategy has worked positively.
  • ES London: Maintain one winner and one loser, whichever happens first.
  • ES Cash: Leave it open and follow the day's movement.
  • NQ: Maintain the strategy of three winners or three losers, whichever happens first.
  • MBT: Recommendation of two micro MBT or more depending on the margin.

7. Future Projects

I am working on an algorithmic trading strategy for SPY & QQQ, stay tunned!

8. Conclusion

I hope these strategies and analyses are useful to improve your trading. If you are enjoying these strategies, I would appreciate it if you recommend them to your friedns and Family, post, and like on Twitter https://x.com/AndyWallsQ . This will help us incorporate new strategies and tools. Have an excellent trading week. See you on the Discord server.

Happy weekend.

Quant

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