Executive Summary
- Objective: Use $5,000 to pass prop firm challenges, reinvest profits into $100K and $200K challenges, and maximize returns with a 50% pass rate and 60% funded account retention rate.
- Approach: Start with five cost-effective challenges ($25K–$50K), pass at least two, trade funded accounts, and funnel profits into two larger challenges ($100K and $200K). Prioritize firms with high profit splits (80–100%) and scaling potential.
- Expected Outcome: Achieve $30K–$50K in Year 1 profits, secure $300K+ in funded capital by Year 2, and scale to six-figure annual profits.
Assumptions
- Capital: $5,000.
- Challenge Limit: Up to 5 initial challenges ($25K–$50K).
- Pass Rate: 50% (2–3 of 5 challenges pass).
- Retention Rate: 60% of funded accounts remain active (e.g., not terminated due to drawdown breaches).
- Reinvestment: Profits fund one $100K challenge ($399–$450) and one $200K challenge ($500–$700).
- Trading Performance: 5% monthly return on funded accounts (conservative, post-evaluation).
- Profit Splits: Average 90% across firms.
- Timeframe: 24 months (Year 1: initial challenges and profits; Year 2: larger challenges and scaling).
Phase 1: Initial Challenges (Months 1–6)
Challenge Selection: To preserve capital and maximize funded account potential, choose low-cost challenges with high pass probability. Based on prior research, here’s the allocation:
- Apex Trader Funding ($25K, one-step): $147
- Blueberry Funded ($25K, one-step): $125
- BrightFunded ($25K, one-step): $125
- FXIFY ($50K, two-step): $249
- The 5%ers ($25K, one-step): $165
- Total Cost: $811 (leaves $4,189 for retries or expenses).
Rationale:
- Smaller Accounts: Four $25K challenges are affordable and align with your 50% pass rate (expect 2–3 passes). One $50K challenge tests higher capital with forgiving FXIFY rules.
- One-Step Bias: Four one-step challenges (Apex, Blueberry, BrightFunded, The 5%ers) simplify evaluations. FXIFY’s two-step diversifies risk.
- Cost Efficiency: Fees fit within $5,000, preserving capital for reinvestment.
Expected Outcomes:
- Challenges Attempted: 5 ($125K total account size: 4×$25K + $50K).
- Pass Rate: 50% → 2–3 passes (assume 2 for conservatism: e.g., Apex $25K and FXIFY $50K).
- Funded Capital: $75K ($25K + $50K).
- Retention Rate: 60% → both accounts retained (if only one passes, plan adjusts below).
Execution:
- Start challenges staggered (one every 1–2 weeks) to manage focus.
- Practice each firm’s rules (6–10% profit target, 4–6% daily drawdown, 8–12% max drawdown) in demo mode.
- Use a proven strategy (e.g., trend following or scalping) with 0.5–1% risk per trade.
Financials:
- Cost: $811.
- Funded Accounts (Month 6): $75K (assuming Apex and FXIFY pass).
Phase 2: Trading Funded Accounts (Months 7–12)
Trading Plan:
- Goal: Generate profits to fund $100K and $200K challenges.
- Performance: 5% monthly return on $75K = $3,750/month.
- Profit Split: 90% → $3,375/month to you.
- Retention: 60% → assume both accounts remain active (if one fails, profits drop proportionally).
Profit Projection:
- 6 Months (Months 7–12): $3,375 × 6 = $20,250.
- Adjust for Risk: If one account fails (40% chance), assume $25K account remains → 5% of $25K = $1,250/month × 90% = $1,125/month × 6 = $6,750 total.
- Conservative Estimate: Plan for $10,000–$20,250 profits (midpoint: $15,000).
Reinvestment Preparation:
- By Month 12, allocate profits for:
- $100K Challenge: ~$400 (average of FXIFY $399, Blueberry $350, The 5%ers $450).
- $200K Challenge: ~$550 (average of Blueberry $500, BrightFunded $550, FXIFY $599).
- Total Needed: $950.
- Remaining profits ($15,000 – $950 = $14,050) cover living expenses, retries, or savings.
Phase 3: Larger Challenges (Months 13–18)
Challenge Selection:
- FXIFY ($100K, one-step): $399 (90% split, no time limits).
- Blueberry Funded ($200K, one-step): $500 (80–90% split, low spreads).
- Total Cost: $899 (funded by $15,000 Phase 2 profits).
Expected Outcomes:
- Pass Rate: 50% → assume one passes (conservatively, $100K FXIFY).
- Funded Capital: $100K (if both pass, capital rises to $300K).
- Retention Rate: 60% → $100K account retained.
Trading Plan:
- Start $100K challenge in Month 13, $200K in Month 14.
- Pass $100K by Month 15 (if $200K fails, retry with reserve profits if desired).
- Trade $100K funded account from Month 16.
Financials:
- Cost: $899.
- Funded Account (Month 16): $100K.
- Profits (Months 16–18): 5% of $100K = $5,000/month × 90% = $4,500/month × 3 = $13,500.
Phase 4: Scaling Profits (Months 19–24)
Trading Plan:
- Continue trading $100K account (and $25K/$50K from Phase 1 if retained).
- Total Capital: $100K (or $175K if Phase 1 accounts remain).
- Performance: 5% monthly = $5,000–$8,750/month.
- Profit Split: 90% → $4,500–$7,875/month.
- Scaling: Firms like FXIFY scale accounts 25–50% every 3–4 months. Assume $100K scales to $150K by Month 24.
Profit Projection:
- 6 Months (Months 19–24): $4,500 × 6 = $27,000 (base case, $100K account).
- Upside Case: If $175K active, $7,875 × 6 = $47,250.
- Scaling Bonus: $150K account at 5% = $7,500/month × 90% = $6,750/month by Month 24.
Cumulative Financials
- Year 1 (Months 1–12):
- Costs: $811 (initial challenges).
- Profits: $10,000–$20,250 (midpoint: $15,000).
- Net: $14,189 (after costs).
- Year 2 (Months 13–24):
- Costs: $899 (larger challenges).
- Profits: $13,500 (Months 16–18) + $27,000 (Months 19–24) = $40,500.
- Net: $39,601 (after costs).
- Total 2-Year Profit: $14,189 + $39,601 = $53,790 (base case).
- Upside Case: If both $100K/$200K pass and Phase 1 accounts retain, profits could hit $80K–$100K.
Risk Management
- Challenge Phase:
- Risk 0.5–1% per trade to meet 6–10% profit targets within drawdown limits (4–6% daily, 8–12% max).
- Use stop losses to cap losses at 1% of account.
- Trade low-volatility pairs (e.g., EUR/USD) or futures during evaluations.
- Funded Phase:
- Maintain 0.5–1% risk to ensure 60% retention.
- Avoid trading during high-impact news to prevent drawdown breaches.
- Diversify assets (forex, futures, crypto) to reduce correlation risk.
- Mental Discipline:
- Log trades to identify errors.
- Pause after losses to avoid overtrading.
Contingency Plan
- Challenge Failure: If fewer than two initial challenges pass, retry Apex ($147) or Blueberry ($125) with $4,189 reserve. Reduce to three challenges to conserve funds.
- Account Termination: If retention falls below 60%, focus on remaining accounts and refine strategy (e.g., lower risk to 0.3%).
- Profit Shortfall: If Phase 2 profits < $950, delay $200K challenge and take two $100K challenges ($800 total).
- Market Downturn: Shift to demo trading during extreme volatility; resume when conditions stabilize.
Milestones
- Month 6: Pass 2–3 challenges ($75K funded).
- Month 12: Earn $15,000 profits; fund $100K/$200K challenges.
- Month 18: Pass $100K challenge; trade $100K account.
- Month 24: Earn $40,500+ total; scale to $150K+ capital.
Why This Plan Works
- Capital Efficiency: $811 unlocks $75K initially, scaling to $100K–$300K with profits.
- Realistic Assumptions: 50% pass rate and 60% retention align with industry averages for skilled traders.
- High Returns: 90% profit splits and 5% monthly returns yield $53K–$100K in two years.
- Flexibility: Reinvestment prioritizes larger accounts while preserving fallback funds.
- Risk Control: Conservative trading ensures sustainability.
Next Steps
- Register with Apex, Blueberry, BrightFunded, FXIFY, and The 5%ers.
- Demo trade their rules for 2 weeks (start April 2025).
- Fund challenges ($811) and begin by May 2025.
- Track performance daily; reinvest profits by Month 12.
This plan accounts for your 50% pass rate and 60% retention, delivering $53K+ in profits by Year 2 with a clear path to $100K+ if larger challenges succeed. It balances ambition (scaling to $200K accounts) with realism (conservative returns and risk management). If you’d like, I can simulate specific scenarios (e.g., only one initial pass) or analyze a trading strategy to boost your pass rate. What’s your next priority?
Disclaimer: LakshmiFX is not a financial adviser; please consult one. Don’t share information that can identify you.
