Having a funded account trading plan is one of the secrets to a successful funded trading career. Usually, your trading plan will be tailored to your personal strengths and weaknesses.
Your trading plan includes things like your capital, risk management, entry and exit strategies, your overall strategy, etc.
But when you become a funded crypto trader your situation shifts a little. Your strategy might stay the same but the trading conditions will change. This is why we recommend adjusting your trading plan to suit your funded crypto trading account!
Why should you create a funded trading plan?
As mentioned above, when you become a funded crypto trader your situation changes. You will have daily drawdown limits as well as an overall drawdown limit.
If your trading plan says you can risk 5% of your total capital but your funded crypto trading account has a daily drawdown limit of 3% your trading plan won’t work.
At Funded Crypto Trader, we work with Eightcap. Eightcap might have different leverage or lot size settings than the broker you normally use for trading. All of this means your usual trading plan won’t work.
How do you create a trading plan for your funded trading account?
The good news is that you don’t need to start from scratch! The bad news is that the parameters that change might impact your strategy so much you might have to use a different strategy altogether.
Funded Trading Account Rules
First things first: go have a look at the rules you’ll need to stick to for your Funded Crypto trading account.
What is the daily drawdown limit?
What is the overall drawdown limit?
How much capital will you have in the funded trading account?
Take note of all of these.
Grab your existing trading plan and compare your risk management with these new rules. Adjust your risk management to suit those rules. You might have to take traders with smaller position sizes so you can still take 3 trades a day, just not at 2% risk per trade.
The next thing you want to do is have a look at spreads. Many crypto traders are new to spreads and will forget to factor this in. Spreads will affect your entire trade. Your stop loss, your entry and your target will be hit at different places.
This means you need to adjust your entry and exit rules. You might have to lower your RR, or you might simply go even stricter with which trades you take. Some pairs might have a higher spread than you like, and as a result, you simply don’t want to take that trade. Note this down in your trading plan.
Once you’ve sorted the technicals out, it’s time to decide when you want to take profit. If the account is yours and yours alone, you can take profit whenever you want.
However, funded trading programs often have a limit. Some will only allow you to withdraw money once a month. Others will have a minimum and maximum withdrawal limit.
You also want to check if your drawdown will change depending on how much profit you’ve made. Use all this information to determine if and when you want to take profit.
Trading with a funded trading account could cause you more stress than trading with your own account does.
Example: you don’t care if you lose four trades in a row. However, you’ve now hit the halfway mark to your daily drawdown limit. You panic. You take a risky trade to make that money back, and more! It works. You’re ecstatic. You take another risky trade because you’ve just made 12% in one trade! It fails. You’re back to where you were. Oh no, quick another trade! It fails. You’re one bad trade away from losing the account!
See what I’m getting at?
Make sure to evaluate how you deal with losses when trading with your funded trading account. You might need to take a break after two losses instead of six.
Creating a trading plan for your Funded Crypto trading account sounds like a lot more work than it really is. With some minor adjustments, your plan will suit the needs of your funded crypto trading account in no time!
Want to take our funded trading challenge? Join here!