Is it a good option to Use Automatic Trading for passing prop challenges?

One of the best ways to get access to a lot of funds for trading if you do not have the capital yourself is to opt for passing prop challenges. The idea behind prop trading is rather simple and yet elegant at the same time. There is a company, somewhat similar to a hedge fund, but it does not reach for external investment. Instead, the company funds are directly taken into the market for trading. 

Further Reading: Is Prop Trading Better Than Hedge Fund 2024? 

Who does the trading? The majority is carried out by retail traders who are individuals with tremendous expertise in trading. 

But what if you do not have the expertise either? 

Well in that case you can turn to automated solutions for passing prop challenges and ultimately engaging in prop trading. In this article we are going to discuss exactly that.

What Is Prop or Proprietary Trading? 

Prop trading is when a financial firm uses its funds to trade in a financial market rather than for external investments. Some of the strategies used by traders working for prop trading firms are arbitrage and market making. Prop trading is one of the most lucrative careers in finance as it can bring huge profits to traders who are able to execute profitable trades and achieve sustainable profitability for their prop firm.

Some of the benefits of prop trading are that it can provide savvy traders a very high return on their trading activity and offer them an opportunity to trade large positions, using leverage provided by the firm. But with greater risk comes a higher price to pay, since as a prop trader you are literally trading with the money of the firm and not your own. As such, prop trading firms are known for implementing serious risk management procedures to track and limit such matters.

What Is the Difference Between Prop Trading and Leveraged Trading? 

You might think prop trading is somewhat similar to leveraged trading. While you are not totally mistaken, there are, however, some crucial differences. 

As you know in both prop trading and leveraged trading, you receive funds from a firm for the purpose of trading in a financial market. But there are two important distinctions: 

1. In leveraged trading you have to put up a collateral that is known as margin levels in order to receive the leverage for trading. Whereas in prop trading, prop firms present traders with challenges that ought to be passed first in order for them to receive the funds. When such challenges are passed, traders will then receive the funds from the firm. These are usually a series of challenges that get more difficult as they go on. So this is a major point of difference between them. 
2. Another hugely important difference between them is the freedom that the trade has in the execution of trades. In the case of leveraged trading, the freedom of the trader in the matters related to trading is very limited and has to fit the constraints and framework that is often put forth by the broker. However, in the case of prop trading, the trader has total freedom in how they do their job, as long as it results in an ideal degree of profitability. 

Using EA’s for Passing Prop Challenges 

So far we discussed the notion of prop trading and how it can be an excellent way for traders who do not have a significant capital to begin their trading process. We saw that if you can pass the prop challenges then you can become a prop trader and receive funds for trading. 

But the main question posed at the beginning was, what if you do not have the expertise either? 

In this situation you can still become a prop trader, but you will have to employ another method for passing the challenges. You can use automatic methods to pass prop challenges. 

There are clear advantages to this approach. You do not have to have any sort of expertise. You can simply use an expert advisor and have it do the job for you. 

The only thing is that you have to look for the right expert advisor. Luckily, we have just the right option for you. 

An Expert Advisor to Become a Prop Trader 

XAUBOT can be installed on the popular trading platform MetaTrader 4. Once installed, you can delegate the task of trading in the forex market to the EA, sit back and enjoy the sustainable trading process that it can bring for you. 

But how is XAUBOT particularly compatible with prop trading and passing prop trading challenges? 

The XAUBOT EA employs two main trading strategies. One of them is the scalp method trading and the other is the multi level trading approach. We all know about scalp trading and will not focus on it. The main focus of our discussion here is the multi level approach. 

The multi level approach can be particularly useful in passing prop challenges. Why? Because this trading strategy is able to bring users reliable and sustainable results in the forex market. 

The way it works is that it basically increases the size of each position one after the other. In this way, even if the initial position results in losses, once a position eventually wins, it will yield enough substantial benefit that it will cover all the possible previous losses.

In this way we can say that the multi level trading approach can be very useful for passing prop challenges. 

Add to that numerous risk management features and factors, such as the news filter for managing the impact of fundamental factors, and many other parameters that are there just to make sure you can dependably rely on this expert advisor. 

Conclusion 

In this article we discussed the notion of prop trading and the challenges that are related to it. We saw how it is such a great way for savvy traders to make a lot of money if they do not have the initial capital for trading. But we also saw that even if you do not have the expertise as a trader, you can still become a prop trader. And that feat can be achieved by implementing automatic trading to pass such challenges.