I analyzed 5,000 Prop Traders. 1 Strategy ALWAYS Wins!

0:00 Ladies and gentlemen, we've paid out over $5 million to traders and I have the data on every single account that didn't make it. Today, we're making that data public for the first time. Complete deep dive expose a tell all because after analyzing over 5,000 accounts and talking myself to 100 of our best traders, the ones that made it and the ones that didn't always do the same thing. The top 1% they all do the same thing. The bottom 99% they also do the same [music] thing. In this video, I'm showing you exactly what separates them. Real trade logs, [music] real numbers, no theory and four key

0:45 facts. The one bad day cliff, [music] the risk escalation trap, what your win rate is actually hiding and the one pattern [music] the top 1% shares and what you exactly need to change today to stop failing challenges [music] and start working towards payouts. And I'll tell you this right now. Most traders don't fail because of their strategy. They fail because of a single bad trade that they couldn't walk away from. One loss, then another, then another all within 45 minutes. I see it every day and by the end of this video, you'll know exactly how to make sure that's never you again. Pretty much everyone thinks failure looks like a slow

1:30 decline. But yeah, that's not true. I ran the numbers on thousands of our traders at IQ Capital and over 90% of them fall off from one or two bad trades all in under 24 hours. Here's case study number one. This trader actually started incredibly strong. I've been look, consistent equity curve, managed drawdown, clearly a [music] solid strategy and then in one day, one trade, he blew everything. This trader took a bad trade that immediately reversed against him and held out hoping that he'd [music] be right later. We call that an emotional episode, and it's completely unacceptable in a prop account, and obviously can fail

2:17 everything you've built in minutes. What about case number two? Now, this guy started out on fire. Same profits across four straight trades. Definitely using a good strategy with fixed targets. Then, one bad trade wiped pretty much everything [music] he did. And you're probably wondering why. So, I asked him. He took a risky trade outside of his strategy around a news release, high volatility, stuff you never do in a prop account. Then, he took one final revenge trade, and yeah, you can see the result. Not good. All of this because of an emotional episode. But, all of this was preventable. This could have been prevented by not trading

3:04 outside of his strategy in the first place. Or, if he did, using significantly smaller position sizes. That way, a bad market move doesn't wreck the account. Now, look, everyone gets emotional about something. But, trading is business. Emotions will only screw that up. And the craziest part is both of these traders started out better than most of our traders. They had good strategies, consistent targets, and both completely bombed everything in under two days. But, here's the funny part. You don't have to trade nearly as well as these guys were. You can get half the performance they had, [music] just cut the emotional stuff out entirely. It'll kill you 100% of the time. But, even if

3:52 you do this, there's a second biggest thing that fails traders at IQ Capital, >> [music] >> and it's what we call the risk escalation trap. What's that? [music] When traders are doing well and start increasing their risk. Now, this one is tricky because if you are a great trader, this seems like a smart thing to do. But, markets don't really work like that. Randomness, variance, uncertainty all play a role. Look at the trader on top here. He actually started almost perfectly. One of the most consistent performance curves I've ever seen. Losing trades had a small impact, and he kept capitalizing on win [music] after

4:38 win. But, what happened later was a complete disaster. Why? Look at the middle of the curve. This guy fell right into the risk escalation trap. He didn't start losing more. The size of his losses just got bigger. Not just bigger, way bigger. Three bad trades wiped out 80% of all the gains this guy made over the last month. But, what happened after? Same old story. Revenge trading, emotional mistakes, stuff no trader should ever do. This guy did recover, but look closely. His performance was nowhere as consistent as when he started. It was volatile until finally

5:25 one bad trading day completely wiped him out all while he was stuck in the risk escalation trap. He failed shortly after. But, look at our trader on the bottom. Don't get fooled by these three large dips. All of those are actually payouts [music] for around $3,000. Now, this guy has risk management on complete lockdown. His account gets bigger and bigger, but his profits and losses are basically the exact same. I've already paid him out around $7,500, and he's floating another $5,000 he could take out at any second. All of this on a $50,000 account. So, what does this trader do differently? He takes on

6:13 more risk for more reward in a completely different way. He doesn't make position sizing bigger. He just trades on more accounts. Copy trading. Same trades across multiple funded accounts, managing about hundreds of thousands of dollars in capital. Now, listen up. This is important. He's taking on the same risk across every account while simultaneously increasing his overall profit potential. This strategy prevents small deviations in position risk from blowing the account and prevents him from taking on massive losses when being locked in. Remember, drawdown in a prop account isn't

6:59 actually your own money. Your fees are the downside, [music] and a lot of traders consider that a big advantage. But, if I showed you two traders, and one had a 75% win rate, while the other had 48% you'd probably think the 75% guy is a better trader. Ready for this? I talked with 100 of the best traders at IQ Capital, and I'm sharing the number one insight they gave me for the first time right here. Win rate means nothing. That was dramatic. Really, it's just way less important than people think. And people obsess over win rate for illogical

7:45 reasons, and it [music] doesn't have that much to do with success. And this trader data proves it. The traders on top all had high win rate strategies. The equity curve goes up more than it goes down. But when it goes down, it goes down hard. But the example on bottom has the [music] opposite problem. The equity curve goes down more frequently than it goes up. But when it does go up, it's to a significantly larger degree. These traders are still funded and are some of our best performers. If you don't know, there's an inverse correlation between win rate and risk reward. It's not perfect, but it's present. The higher your win rate, the

8:32 lower your reward risk. This just means that 75% win rates, 85% win rates, you get the point. Almost always have smaller targets with bigger stops. If someone ever tells you they have an 85% win rate with a two to one reward risk, or even worse, something higher than that, run for the hills. Realistically, a one to one reward risk needs better than a 50% win rate. But good strategies with a one to one usually have 60% or higher. 0.5 to one needs at least 66%. And good strategies usually hover around 80% there. And a two to one RR needs at least 33%.

9:17 And good strategies here usually hover around 40%. There's no magic solution to this. If RR goes up, win rate goes down. And if RR goes down, win rate goes up. The reason for this goes into a ton of math and stats that we're not going to talk about here. But what we are going to talk about is the single behavioral pattern [music] that the top 1% of traders at IQ Capital do. I interviewed the three traders at my firm that make the most payouts, and all of them kept saying the exact same thing. But, you have to hear how all of these traders got to where they are now before you can

10:03 appreciate the same thing that they all have in common. Now, our top trader, well, he's our best for a reason. He's used the same strategy for over 5 years, trades multiple accounts, and came into [music] IQ Capital already knowing how to get things [music] done. This is not typical. His risk profile is extremely controlled and predictable. Losses aren't scattered. In fact, they're almost all the exact same size. That's a perfect IQ Capital fit, and this has led us to paying him out over six figures in under a year. Our second-best trader is pretty similar. He hasn't been trading as long with us, so he doesn't have as

10:50 much payouts as our top trader. But, this guy came in strong, stayed strong, and is probably the most consistent trader we've ever had. His risk profile is even tighter. The size of losses are clustered so tightly, it's actually insane. But, our third trader, this is the guy most similar to regular traders that come into a prop firm. He started out a bit inconsistent, and even failed some challenges. But, once he got the hang of how prop firms really work, he's had an ultra-tight risk profile and extremely consistent performance ever since. Two of these guys came in already

11:37 knowing what to do, and one came in and had to figure some stuff out. But, they all told me the same thing. There's no such thing as a hot streak, and there's no such thing as a cold streak. Now, hold on. That doesn't make sense intuitively, but it makes perfect sense once we dissect the logic. A hot streak isn't the trader getting better. It's just the natural consequence [music] of a mapped out strategy having a favorable stretch. I know that sounds like a smarter way to say hot streak, but what they're saying is a hot streak doesn't mean they suddenly got [music] better at trading. It means their strategy is

12:23 going through a favorable run inside its regular distribution of outcomes. And a cold streak doesn't mean they suddenly got worse at trading. It means the [music] same strategy is going through an unfavorable run inside of that same distribution. In other words, the edge didn't change. They didn't suddenly get better or worse at trading. The results just clustered. Simply put, sometimes the wins come close together. Sometimes the losses come close together. That's not magic. It's reality. So, what's the actual takeaway here? Since these so-called hot streaks and cold streaks will happen and have nothing to do with their actual skill level, they're

13:09 completely emotionally numb to them. And yes, you heard that right. A series of bad trades in a series of good trades are expected regardless of how good you are. And understanding this lets them completely disassociate from them emotionally. No getting hype and doing dumb stuff during a hot streak, no getting demotivated and revenge trading during cold streaks. And that's really the whole point. The top 1% are not sitting there with some magical strategy that nobody else has ever seen. They're not winning because they never lose. They're winning because win losses happen. They don't let one trade turn

13:56 into five stupid ones. And honestly, that was the most surprising thing in the data. It wasn't how far ahead these top guys were. It was how close a lot of the failed traders actually [music] got before they blew it. Some of these accounts didn't need a brand new strategy, they didn't need a new indicator, and they didn't need to completely reinvent how they trade. They needed one better day of risk management. One day where they stopped after the first bad trade, one day where they didn't size up because they felt locked in, and one day where they didn't let a high win rate convince them that they were bulletproof. That's the entire difference. The traders getting paid are

14:42 not [music] finding secret strategies. They're surviving long enough for their edge to actually work. And now you know exactly what the data says they do differently. You can start your first challenge at IQ Capital for as little as [music] $1. Terms and conditions apply. Check the description of this video for more details. IQ Capital, built by traders for traders. >> Mhm.