Let's be blunt: prop firm trading looks like easy money from the outside. Get funded with someone else's capital, make some trades, split the profits. What could go wrong?
Well, everything. And I mean everything.
Here's the brutal math: only 22% of traders even make it past Phase 1. That's not a typo. Nearly 8 out of 10 people fail before they've barely started. And those lucky few who pass? Most of them never see a real payout either.
Arjo, an ex-prop firm owner, has the data and shared it with us. The patterns are so consistent it's almost funny. (Okay, it's not funny if you're one of the 78% not passing your evaluation accounts.) The same mistakes show up again and again, like a broken record of bad decisions.
The Recipe for Disaster (That Everyone Follows)
After looking at thousands of failed accounts, Arjo showed exactly how traders blow up their challenges. It's like watching the same movie over and over.
They Can't Handle Basic Risk Management
About half of failed traders—literally 50%—don't use stop losses consistently. Think about that for a second. They're trading with real money (even if it's not technically theirs) and they're just… hoping things work out?
It's like driving without a seatbelt because you're “pretty sure” you won't crash today.
The scalpers have an even harder time. Don't get me wrong, scalping can work, but many treat trading like they're in Vegas. They're so focused on grabbing quick profits that they completely ignore their daily loss limits. I've seen accounts blow up in minutes because someone thought they could scalp their way out of a hole.
Then there's the lot size thing. Most failing traders pick a number—let's say 1-lot. They stick with it no matter what. Market's going crazy? 1-lot. Perfect setup with a tight stop? 1-lot. It makes no sense. Your position size should match your stop loss, not your comfort zone.
But here's the real kicker: their risk-reward ratios are backwards. We're talking 0.56 to 0.97, which means they're risking a dollar to maybe make 60 cents. You'd need to be right 80% of the time just to break even, and nobody's that good consistently.
Successful prop firm traders average 2.5 to 3.0 reward-to-risk ratios!
We have a tool to show you what reward-to-risk ratio you need given a win percent. See our Reward to Risk calculator.
They Trade Like They're Playing Whack-a-Mole
The overtrading is insane. Failed traders average 7-9 trades per day. That's not strategy, that's addiction. They can't sit still. Every little price movement looks like an opportunity.
I get it, though. When you're staring at charts all day, doing nothing feels wrong. But successful trading is mostly waiting. The market doesn't care about your boredom.
About 70% of failed traders call themselves scalpers, which tells you something. Real scalping requires surgical precision and ice-cold discipline. What most people are doing isn't scalping—it's panic trading with a fancy name.
And the timeline? Most blown accounts last 5-7 days. A week. That's how long it takes to destroy months of preparation and dreams.
The News Trading Nightmare
Traders see a big news event coming like FOMC, GDP, CPI, etc., and they think “This is my moment!” They jump in right as the news hits, usually trading Gold or Nasdaq because those move the most.
What actually happens? They get steamrolled by slippage, volatility, and market makers who've been doing this for decades. It's like showing up to a gunfight with a water balloon.
The Hard Truth
I'm not trying to scare anyone away from prop trading. But these numbers don't lie. The vast majority of people fail, and they fail in predictable ways.
The good news? If you can avoid these obvious traps, you're already ahead of 78% of the competition. It's not about being a market genius—it's about not being stupid with risk.
In my next post, I'll show you what the winners actually do differently. Spoiler alert: it's a lot more boring than you think, and that's exactly why it works.
Ready to learn the strategies that actually work? Join our community of successful traders at Aeromir.com where we teach proven risk management techniques that separate winners from the 78% who fail.
