Prop firms need traders who try again. and again. and will likely try a lot more times after that.
The most dangerous thought is thinking you’re close. You didn’t “make it”, but they are gonna celebrate like you did. This is the basis behind the psychology of the challenge model and this chapter.
How many times have you seen this or has happened to you:
You get the email “Congratulations, you’re funded.” You get the confetti emoji in the email and a cool animation on the dashboard. You post the screenshot. maybe you tag your “mentor”. He gives it the engagement boost. The firm gets all the free marketing for themselves. You think they don’t know what they are doing? The product is marketing disguised as trading. Prop firms (specifically futures firms) wouldn’t be at where it stands if not for this. It’s all psychology at the end of the day.
Same thing with the automated emails when you clear a certain threshold in your XFA. “You’re trading well. Keep it up! We’re monitoring your accounts for callup to Live.” This instills the belief that you are making it. They know what they are doing. You tell yourself “It’s gonna work out this time. This one is the one.”
front-loaded rewards.
the reward system is front-loaded. firms reward effort before performance. firms figured out that most traders won’t make it to payout anyway. so they shifted the emotional payout to the front. this conditions you to associate progress with performance. it isn’t. the hard part hasn’t even started. traders who celebrate too soon always chase the follow-up. your win becomes their hook. And that’s when they’ve got you.
How about when you pass your combine. You start pacing around your room. “Finally, after all of the resets and failed evaluations, I'm funded.” From the firm’s perspective, they just see more fees. It’s the classic breadcrumbbing strategy.
Calling this one the Bio flex. You put in your Twitter bio. “$500,000 in funding.” “Max allocation on XX” The prop firm knows you will be back to evaluations by next week. your failure is their revenue. This is what fee extraction at scale looks like. At the end of the day, the firm made $500 before you even had the chance to take any of theirs.
milestone thinking.
Films found out how to make trading a game of milestones. challenges turn trading into a level-based game. almost like a video game. Pass evaluation. Unlock funding. pass funding. Hit payout. post to flex. each milestone feels like a win. but the problem is you start trading for the milestone. you hold trades longer, not because the setup justifies it, but because you “need to hit the threshold.” you scale up lot size because “you’re close.” MILESTONES HAVE NOTHING TO DO WITH EDGE. they’re arbitrary endpoints. this is where discipline dies. and you start measuring distance.
How about on Discord? A newer trader shares their “evaluation passed” email. The discord starts to go wild. “let’s goooooo” “big dog funded” “you made it fr”. The prop firm’s risk team knows the outcome. You get the email. You celebrate. You convince yourself that it means something. The firm gets the stripe notification. They send you a nice email. They know it means nothing yet. And it won’t probably mean anything to them *except you back to buying more evals next week. this is the invisible scoreboard. you feel like you have to catch up to others. you want to be seen. External validation rewires internal expectations. *much more in chapter 29 on trading in silence
Challenge models distort what good, consistent trading looks like.
urgency as product.
Urgency is a part of the product.
Prop firms learned that pressure sells. It sells more accounts and resets better than logic ever could.
Monthly rebills encourage those close to rebill to lever up and take more risks. “If i’m gonna get charged regardless, I might as well gamble what I got.”
How about checking your dashboard daily to see your “progress bar” go up? Another tactic that is utilized. It’s designed to put the thought in your head to push that bar in the “right” direction each day. At best, it’s tracking your daily progress; at worse, it’s instilling the belief that you have to be green every day. You will overtrade to try to move that progress bar in the right direction. Think Apple Watch and “close the rings” that have been wildly successful in encouraging you to do something. that little progress bar is a dopamine hook. and traders fall for it.
“Journal your trades directly on our platform”. They do it because they want you to check the dashboard every day. to believe you are making progress daily. You’re meant to feel closer each day. The green color and slick UI has these effects on the brain. this is how visual cues hijack the reward system in your brain.
Putting the percentage or $$ value to funded account is the same thought. “you’re 70% of the way to funding!” The percentage or $$ has nothing to do with your trading. It shouldn’t and it can’t for you to find long term success in this game. It’s purely visual bait.
On Flash sales and discounts. “40% off evaluations for the next 24 hours.” “90% off evaluations for the holiday weekend.” These offers show up when the trading week is winding down. Always usually on thursdays or fridays. You look at your account and tell yourself “Hey, I can ‘gamble’ or ‘trade riskier’ because I can buy a cheaper reset.” NO. They know what they are doing. Do not allow yourself to fall into this mentality. It’s a funnel that will churn your tuition. much quicker than you think.
This is behavioral economics in play. Limited-time urgency increases conversion rates. when you layer that over sunk-cost fallacy/emotions and the identity of being “almost funded,” it becomes a churn machine. every rule, time window, minimum trading days, tight drawdown is there to drive one behavior: speed. and speed kills discretion.
the danger isn’t that you feel pressure. the danger is that you start believing the pressure is real. it isn’t. the market will still be there tomorrow. but the firms are counting on the fact that you won’t. *much more in chapter 21 about overtrading
In this book, I want to not only comment on the bad, but I also want to help you with some of the good. What can you do to rewire your brain correctly? This is where you take the wiring back.
Some suggestions to try:
-no more dashboard addiction. if you journal, try journal external to the dashboard.
-selective trading times
-max trade count per day
-fail an eval? wait a few days before hopping back in.
-don’t fall into the false encouragement emails. don’t even look at them.
your job is becoming boring. real disciplined trading is boring.
PART I: UNDERSTAND THE GAME