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I watch trading podcasts regularly. Trading prop firms has become a popular route for many aspiring traders, offering the opportunity to trade with significant capital without risking personal funds. In an interview titled “Trading Prop Firms Is Easy With This SIMPLE Strategy,” Kimmel, a seasoned trader, shared his approach to trading with prop firms. His insights revolve around simplicity, discipline, and a keen understanding of market behavior.
Kimmel is a German-Portuguese trader who has been consistently profitable for over three years. He has achieved $1.2 million in combined funding from various prop firms and has earned multiple six-figure payouts. Kimmel is a recurring guest on the Words of Rizdom podcast, where he shares his experiences and insights into prop firm trading. He discusses traders’ challenges, strategies for passing prop firm challenges, and the industry’s future in his interviews.
Check-in video highlights:
- This Backgro analyzes started trading about 6providesago and has been consistently profitable for over 3 years. (3:10)
- Prop Firm Funding: Kimmel has accumulated $1.2 million in prop firm funding across multiple firms. (5:45)
- Biggest Payout: His biggest payout from a prop firm was over $100,000. (6:25)
- Challenges Faced: Kimmel faced early challenges in risk management and emotional control before becoming consistently profitable. (8:15)
- Strategy Simplicity: Kimmel believes simple strategies often work best in prop firms and recommends avoiding over-complication. (11:30)
- Risk Management: His strategy focuses heavily on strict risk management, limiting risk to no more than 1% per trade. (14:00)
- Routine: Kimmel emphasizes the importance of having a solid routine for consistency in trading. (17:20)
- Trading Style: He primarily trades using a technical approach, relying on price action and critical levels rather than indicators. (19:45)
- Psychology: Kimmel stresses that mastering trading psychology is crucial for passing prop firm challenges. (22:30)
- Prop Firm Preferences: He mentions FTMO and MyForexFunds as his preferred prop firms due to their transparency and favorable conditions. (24:50)
- Challenge Strategy: Kimmel suggests starting conservatively in prop firm challenges to avoid early drawdowns. (27:10)
- Consistency over Big Wins: Kimmel believes it’s better to aim for consistent returns rather than focusing on hitting significant wins. (29:00)
- Daily Loss Limit: Kimmel never exceeds a daily loss limit of 3%, which helps him avoid breaching prop firm rules. (32:05)
- Adjusting for Market Conditions: He adjusts his strategy based on market volatility, scaling down risk when markets are unpredictable. (34:50)
- Backtesting: Kimmel spends significant time backtesting his strategies to ensure they work across market conditions. (37:30)
- Emotional Control: He shares that emotional discipline, particularly after a loss, is one of the most complex parts of trading. (39:50)
- Scaling Up: Kimmel discusses how he scales up his positions once he becomes profitable in a prop firm account. (42:20)
- Industry Outlook: Kimmel believes the prop firm industry will continue to grow, but firms with poor conditions will likely disappear. (45:00)
- Advice to New Traders: He advises new traders to focus on developing discipline and not rush into challenges before they are ready. (48:10)
- Future Goals: Kimmel plans to continue scaling his prop firm accounts and aims for a $2 million funding milestone. (51:30)
In this article, we analyze Kimmel’s strategy and provide practical takeaways for traders seeking to succeed in prop firm challenges.
Please watch the video from the podcast:
1. Focus on Risk Management:
The most crucial element of prop firm trading is managing risk. You should aim for a risk-per-trade strategy where you never risk more than 1% of your account balance on a single trade. This minimizes the chances of significant drawdowns and ensures longevity in prop firm trading.
2. Utilize High-Probability Setups:
Stick to setups that are highly likely to succeed. These can include common patterns like support and resistance levels, trendline breaks, or well-tested technical indicators. The key is consistency: do not trade every signal; wait for the setups that align with your strategy.
3. Maintain a Risk-Reward Ratio:
Ensure that each trade you take offers a favorable risk-reward ratio. For example, you should aim for at least a 1:2 risk-to-reward ratio, meaning you aim to make two for every dollar you risk. This keeps your trading profitable even with a lower win rate.
4. Time of Day Matters:
Certain times of the day are more conducive to trading, such as the opening of the London or New York sessions. This is when liquidity is highest and the markets are most active, allowing for better trade execution and more significant price movements.
5. Control Emotions and Stay Disciplined:
Prop firm trading requires strict discipline. Emotional decisions, such as chasing losses or overleveraging, can quickly lead to failing challenges or hitting the daily drawdown limit. Smakeur trading plan and accept that losses are part of the process.
6. Keep a Trading Journal:
Track every trade you make, including the setup, entry, exit, and outcome. This allows you to review your performance, identify mistakes, and continuously improve your strategy. Successful prop traders rely heavily on reviewing past trades to refine their approach.
7. Understand Prop Firm Rules:
Each prop firm has specific rules regarding daily drawdowns, profit targets, and maximum loss limits. Make sure you fully understand these rules to avoid disqualification. Tailor your strategy to fit within the firm’s guidelines, ensuring you can meet their objectives without taking unnecessary risks.
8. Use Leverage Wisely:
Prop firms offer leverage, but that doesn’t mean you should use the maximum available. Proper use of leverage can amplify profits but can also increase losses. Limit leverage and focus on steady account growther than quick gains.
1. The Importance of Risk Management
Kimmel emphasizes that risk management is the cornerstone of trading successfully with prop firms. Most prop firms have strict rules around drawdowns, and exceeding these limits leads to failure. His advice is simple:
- Never risk more than 1% of your capital on any single trade.
Analysis: Why This Works
This approach aligns with the principle of capital preservation. By limiting risk per trade to 1%, even a series of losses won’t lead to catastrophic drawdowns. For example, if you suffer five consecutive losses, you’d only be down 5% of your account. This conservative approach ensures longevity, especially when prop firms often have rules about daily and overall drawdowns.
Kimmel’s strategy allows traders to withstand losing streaks without emotional panic. Maintaining discipline in risk management helps traders avoid the impulse to overtrade or increase position size to recover losses, which is a significant reason many traders fail prop firm evaluations.
2. Focus on High-Probability Setups
Kimmel stresses the importance of trading only high-probability setups. He suggests waiting patiently for market conditions that align perfectly with your strategy instead of jumping into every opportunity. He cites critical levels of support, resistance, and trendline breaks as effective technical indicators for identifying solid setups.
Analysis: Quality Over Quantity
The advantage of high-probability setups is that they often align with fundamental market movements, where institutions and more prominent players are making moves. These setups tend to have more significant follow-through, allowing traders to capitalize on higher probability trades instead of taking random trades throughout the day.
Kimmel’s insistence on focusing on fewer, high-probability trades helps to avoid overtrading, which often leads to excessive fees and poor decision-making. For traders in prop firms, the goal is to hit profit targets while staying within drawdown limits, and fewer, more calculated trades can help achieve that balance.
3. Favorable Risk-Reward Ratio
One of the most actionable insights from Kimmel’s strategy is maintaining a 1:2 risk-reward ratio. This means that for every $1 you risk, you aim to make at least $2. Even with a relatively low win rate, this ratio ensures that your profitable trades outweigh your losses.
Analysis: Why Risk-Reward is Crucial
A favorable risk-reward ratio is critical in prop firm trading because it ensures that you can still grow your account even if you win less than 50% of your trades. For instance, you’ll still be profitable if you win 40% of your trades with a 1:2 risk-reward ratio.
Traders who don’t adhere to a consistent risk-reward model tend to lose out in the long run, as their losing trades can wipe out gains from multiple smaller wins. This part of Kimmel’s strategy is particularly effective for passing the profit targets prop firms set during evaluations.
4. Timing Your Trades: Why Session Overlap Matters
Kimmel identifies the overlap between significant trading sessions, such as London and New York, as the optimal time for trading. This is when the market tends to be the most liquid, and price movements are often more significant.
- London/New York overlap: Roughly between 8 AM and 12 PM EST.
Analysis: Trading in High-Volume Sessions
Trading during the most liquid times of the day is advantageous for several reasons. First, it ensures tight spreads and better trade execution. Second, these periods often see more prominent institutional traders entering the market, which can lead to directional solid moves.
By focusing on these critical trading hours, Kimmel’s strategy seeks to capitalize on volatility without exposing traders to the erratic, low-volume movements that often occur during other parts of the day.
5. Emotional Control and Discipline
Kimmel highlights the psychological challenges of trading with prop firms. Many traders are tempted to chase losses or over-leverage when they are down. He advises traders to stay disciplined and stick to their plan, even during losing streaks.
Analysis: Mastering the Psychological Game
Many traders fail not because of bad strategies but because they lack emotional control. Kimmel’s emphasis on maintaining discipline is crucial for long-term success. Trading prop firms come with added pressure due to strict evaluation criteria, which can lead traders to make irrational decisions.
By sticking to a well-thought-out plan, traders can avoid the trap of revenge trading—one of the fastest ways to fail a prop firm challenge. Discipline also extends to avoiding over-leveraging in the hope of quick gains. As Kimmel points out, slow and steady wins the race.
6. Keep a Detailed Trading Journal
According to Kimmel, keeping a trading journal is necessary for anyone serious about trading with prop firms. He recommends recording every trade, including the setup, reason for entry, exit point, and outcome. Over time, this allows traders to spot patterns in their performance and make adjustments.
Analysis: Learning from Every Trade
A trading journal is an invaluable tool for self-assessment. It helps traders review their decisions and understand whether their losses were due to poor strategy execution or market conditions. Over time, this practice can lead to significant improvements in both strategy and discipline.
In the context of prop firms, where precision is critical, reviewing past trades can help traders refine their setups and reduce avoidable mistakes, increasing the likelihood of passing the firm’s evaluation process.
7. Understanding Prop Firm Rules
Kimmel makes an important point: not all prop firms are the same. Each firm has rules regarding daily drawdowns, profit targets, and maximum loss limits. He advises traders to thoroughly understand the specific rules of the prop firm they are trading with and to tailor their strategy to these rules.
Analysis: Tailoring Strategy to Prop Firm Rules
This is a crucial takeaway for anyone trading with a prop firm. A strategy that works well on one platform may fail on another if the drawdown limits or profit targets are too restrictive. Before starting any challenge, traders should fully understand the requirements and design their trading plan to fit those parameters.
For example, some firms allow a 5% maximum daily drawdown, while others may allow 10%. Adjusting risk accordingly is crucial to staying within the firm’s guidelines and passing the challenge.
8. Leverage: Use It, Don’t Abuse It
While many prop firms offer substantial leverage, Kimmel advises caution. He suggests using leverage sparingly and only when there’s a high-probability trade setup. Over-leveraging is one of the quickest ways to blow an account, especially when combined with market volatility.
Analysis: Controlled Use of Leverage
Leverage is a double-edged sword—it can amplify both gains and losses. In prop firm trading, where risk limits are strict, improper use of leverage can quickly lead to disqualification. Kimmel’s strategy minimizes the risk of excessive losses while allowing for solid returns by keeping leverage in check and using it only for high-probability setups.
Conclusion: A Simple Yet Effective Path to Prop Firm Success
Kimmel’s strategy for trading prop firms revolves around simplicity, risk management, and discipline. By focusing on high-probability setups, maintaining a strict risk-reward ratio, and adhering to firm rules, traders can increase their chances of passing prop firm challenges and ultimately achieving success.
Whether you’re new to prop firms or an experienced trader looking for a more structured approach, the insights from Kimmel’s interview provide a clear, actionable roadmap for navigating the world of prop firm trading.
He is an expert in financial niche, long-term trading, and weekly technical levels.
The primary field of Igor's research is the application of machine learning in algorithmic trading.
Education: Computer Engineering and Ph.D. in machine learning.
Igor regularly publishes trading-related videos on the Fxigor Youtube channel.
To contact Igor write on:
igor@forex.in.rs
