The 5%ers are an Israeli based prop firm founded in 2016 by Gil Ben Hur. They are one of the best regarded and most experienced online prop firm around. The 5%ers reguarly offer new and exciting methods of funding traders, one of which is the “$100k Bootcamp” model which we will look at today.
Bootcamp Challenge - What is it?
The Bootcamp model is a 3 stage evaluation/challenge in which traders prove their ability to trade consistently and profitability under demo circumstances. Upon successfully completing the challenge the trader will receive a live $100,000 account to trade with.
The great thing about this model is that the 5%ers only ask for a small portion of the challenge fee (85 Euros) to begin the challenge, with the remainder only due after passing all three stages. After completing the challenge, the trader is required to pay the remainder of the challenge fee (215 Euros) in order to receive their live account.
How Much Can I Earn?
So, the important question, how much can I make?
Well, we’ve done the math, and based on making an average of 5% returns per month, this will be how much you have made at each checkpoint, after passing the initial challenge.
- After 6 months: $25,000 in cumulative profit (After profit splits)
- After 12 months: $171,000 in cumulative profit (After profit splits)
- At the max scaling at month 17: $901,000 in cumulative profit (After profit splits)
- At the end of year 2: $2.3 Million in cumulative profit (After profit splits)
Bootcamp Potential Earnings
|Starting Balance||Max Drawdown||Profit Target||Payout Split||Profit (After Split)||Cumulative Profit|
The Bootcamp Challenge Targets and Drawdowns
In the first phase of the challenge the trader will receive a demo account with $25,000 of capital. The trader must make a 6% profit ($1,500) on this account to move to the next phase of the challenge. The traders balance or equity must not drop below the maximum loss limit which is set at 5% ($1,250) otherwise the challenge will be failed.
After successfully completing the first phase, the trader will receive credentials for the second phase of the challenge. The second phase starts with an account of $50,000. The profit target remains at 6% which is $3,000 of profit. Again, the account balance or equity must not drop below 5% which is $2,500.
If the trader successfully completes both of these phases, they move on to the final challenge phase. This time the trader will receive $75,000 in their demo account and must make another 6% profit, which is $4,500. The maximum loss for this is 5% which is $3,750.
Should the trader complete all three phases, providing they have followed all the rules, they will receive a live account with $100,000 of trading capital.
Bootcamp Challenge - Rules, Restrictions and Limits
Anyone who takes on this challenge should familiarize themselves with the rules, restrictions and limits set by the 5%ers. These are set to ensure that the trader can demonstrate their ability to trade with care, discipline and skill. Lets look at these in detail:
- Time Limit – The time limit is set at 365 days to complete all three stages of the program.
- Stop Loss – A stop loss is required for every trade and must not risk more than 2% of the account capital.
- Leverage – The maximum leverage on the account is 1:10.
- Trading during news events – Trading during high impact new is allowed in this program.
- Holding Trades – The holding of trades is allowed both overnight and over the weekend.
- Inactivity – Any accounts who do not make a trade in 21 calendar days will be considered inactive and closed.
- Maximum accounts – Each trader can have up to three accounts, however each account must trade a different strategy.
- Expert Advisors – The trader is allowed to use expert advisors providing they follow all the normal rules such as setting stop losses. The only EAs which are not allowed are those that copy other traders or exploit vulnerabilities and inefficiencies in the Metatrader platform.
- Minimum trading days – There are no minimum trading days or trade count for any of the phases.
To ensure traders are given a fair chance, traders will be given 3 warnings that they have not followed a particular rule, these are called risk violations. A risk violation will be given for:
- Not setting a stop loss on a trade
- Risking more than 2% on a single trade
If after 3 risk violations the trader continues to break these rules, the account will be automatically terminated.
The Bootcamp Model - Scaling Plan
After passing the 3 evaluation stages you will be given a live account with a fresh $100,000 of capital, but it doesn’t stop there. Every time you hit 5% profit, your capital will be increased, all the way up to $4 Million! The rate at which it is increased is displayed in the “Earnings” graph above.
Not only does your capital go up, so does your profit split. Whilst initially your profit split is 50%, it gradually increases until you keep 100% of your profits (This is possible due to the fact that 5%ers can copy your trades).
What Instruments Can I Trade?
In the bootcamp program, you will be able to trade the FX Majors, FX Cross-majors pairs, Gold and Silver.
All Forex Majors:
EUR/USD, GBP/USD, USD/JPY, USD/CAD, AUD/USD, NZD/USD, USD/CHF.
All Forex Majors’ Crossings:
AUD/CAD, AUD/CHF, AUD/JPY, AUD/NZD, CAD/CHF, CAD/JPY, CHF/JPY, EUR/AUD, EUR/CAD, EUR/CHF, EUR/GBP, EUR/JPY, EUR/NZD, GBP/AUD, GBP/CAD, GBP/CHF, GBP/JPY, GBP/NZD, NZD/CAD, NZD/CHF, NZD/JPY.
Gold (XAUUSD) and Silver (XAGUSD)
Why Most Traders Fail the Bootcamp Challenge
Trading is hard. As we have covered it takes huge amounts of time, discipline and skill. Prop trading is even harder as not only do you have phycological effects of trading other people’s money, but you must also follow their rules. Lets look at some common reasons people fail the 5%ers bootcamp challenge.
As discussed earlier, you should choose your lot sizes with care and tailor them to your trading style. Scalpers and day traders are likely to use more leverage, whilst swing traders might use less to allow more room for the trade to play out.
Whatever your trading style it’s important to make sure you pay attention to your lot size.
Many prop firm challenges have very tight and sometimes unrealistic time restraints. This, however, is not one of them. You get a full 12 months to complete 3 relatively reasonable profit targets.
Patients is a key part to becoming a successful trader. You must wait for the right set-ups, wait for the right entries, the right exits and so forth.
Key thing to remember – take your time.
Whilst some experienced traders can trade many different instruments, it is wise for most traders to consider sticking to one or two.
This allows traders to really get to grips with the nuances and mechanics of their chosen instrument. Traders can also devote more time to the fundamental analysis of their instrument.
Once you have a tried and tested trading plan, stick to it. Many traders deviate from their plan and trade on “gut feeling” whilst sometimes this may work out, in the long run it will not make you a succesfull trader.
Back testing is a vital part of developing a winning strategy. There are numerous ways you can back test a strategy including manually (TradingView is great for this) as well as algorithmically (Metatrader is great for this).
Bootcamp model vs Others - Comparison
|5%ers||Bootcamp model||85 Euros/215 Euros (After challenge)||3 Phase (All 6% profit target)||5% Static overall drawdown|
|FTMO||$100k Standard challenge||560 Euros||2 Phase (10%/5% profit target)||5% Daily Loss, 10% Static overall loss|
|My Forex Funds||$100k Evaluation||$499||2 Phase (8%/5% profit target)||5% Daily drawdown, 12% Static overall drawdown|
|The Funded Trader||$100k Royal challenge||$489||2 Phase (8%/5% profit target)||5% Daily drawdown, 10% Static overall drawdown|
How To Pass The Bootcamp Challenge
In order to successfully complete this challenge, traders must demonstrate excellent trading ability, risk management and discipline. Lets look at what makes a good trader.
A solid risk management plan is crucial to be a successful trader. But what is risk management? To be competent at risk management you must familiarize yourself with a number of aspects such as:
This is a broad subject that involves creating a plan on how much you will risk per trade, how many trades you will open each day/week, what portion of your capital will you assign to each trade, what leverage do you plan on using as well as many other ideas. When you have a solid plan you can delve into the math and optimize and improve your money management strategy.
This is risk management 101. Stop loss orders are the most important tool a trader can implement to reduce risk. Almost every successful trader will use a stop loss of some kind.
- Tied in with stop losses, each trader must decide what portion of their capital they are willing to risk on each trade. The maximum limit for this program is 2%, however if you chose to use the full 2% per trade, you will fail the challenge if you encounter 3 losses in a row – not a wise decision. Depending on your trading style/plan a good place to start would be 0.5% – 1%. At this level you have a lot more room for losses. For example if your in phase 1 with $25,000 of capital, it would be wise to risk between $250 – $500 on each trade. See the diagrams below, both a 100 mock trades with one risking 0.5% and the other 2%. Courtesy of Trade Return Calculator – Coghlan Capital.
- Again this will depend on your trading style but you need to make sure that your position size is proportionate to your capital. Leverage plays a role here and a good rule of thumb is not to use more than 1:5 leverage, most professionals work in the 1:3 – 1:4 range. It is a good practice to use a position size calculator, we find this one from Babypips particular easy to use.
Risk Per Trade Example
The following charts replicates 100 trades based on certain parameters. Both charts use the same parameters (see below) with only the risk per trade altered. In both examples the profit target is reached, however as you can see in the example with 2% risk, the drawdown is reached after just 4 trades whilst the example with 0.5% risk per trade successfully completes the challenge.
The overall theme of risk management is not to put all your eggs in one basket. The market is unpredictable and not even the best traders in the world are not right 100% of the time. This is where risk management comes into play; by keeping your losses small and wins big(er) you give yourself a much better chance of passing this challenge and being a successful trader in general.
Example Lot Sizes
Many people ask, “What lot size should I use?” But the realistic answer is There is no “one size fits all”. With that said I’m going to give some rough examples based on my own trading style, your free to use these or use a lot size calculator to better suit them to your own style.
|10 Pip Stop Loss||30 Pip Stop Loss|
|Account Size||0.5% Risk||1% Risk||2% Risk||0.5% Risk||1% Risk||2% Risk|
|25000||1.25 Lots||2.5 Lots||5 Lots||0.42 Lots||0.83 Lots||1.66 Lots|
|50000||2.5 Lots||5 Lots||10 Lots||0.83 Lots||1.66 Lots||3.3 Lots|
|75000||3.75 Lots||7.5 Lots||15 Lots||1.25 Lots||2.5 Lots||5 Lots|
|100000||5 Lots||10 Lots||20 Lots||1.66 Lots||3.3 Lots||6.6 Lots|
Arguably the most important part of trading is the phycological aspects. This is usually one of the biggest hurdles aspiring traders must tackle to break through to success.
To successfully pass the bootcamp challenge you will need to understand the mental pitfalls where many other fail.
Lets look at some examples of how a poor mindset can harm your chances of passing the challenge:
This is when you have suffered a loss or series of losses and decide to stray from your trading and risk management plans. Many who fall into this trap will dramatically increase lot sizes or move stop losses and generally try to recoup losses by increasing risk.
As you can imageine, revenge trading can dramatically increase your chances of failing the challenge. The maximum loss for each phase is just 5% which leaves no room for making these kinds of mistakes. So, what can you do to prevent this?
There are a number of methods traders can utilize to prevent revenge trading. One simple one is to set a limit for the amount of losing trades in a day before closing the laptop/ walking away from the computer. Its also vital to understand your headspace as well. If you are feeling stressed, had a bad day, been drinking or just generally not feeling on top form, its wise to consider postponing your trading session.
Nearly every successful trader will have gone through revenge trading at some point. Understanding the phenomenon is a vital aspect to breaking into becoming a successful trader.
Another area which many new traders struggle with is discipline. Before trading you should have a solid risk management plan as well as trading plan. Where discipline comes into play is when a trader strays from their own plans. Whether its increasing risk above that which you have allocated each trade or taking a trade on an untested/unfamiliar instrument. But why does this harm my chances of passing the bootcamp challenge?
The lack of discipline has a number of detrimental effects to your trading. For one, it makes your back testing/forward testing useless. You simply don’t have enough data to know if your trade will be successful or not.
In regards to lack of discipline within risk management, this will most likely result in a failed challenge. Remember, prop firms are looking for consistent traders, if you can’t prove consistency, they will be much less inclined to work with you.
The last piece of the puzzle we will talk about today is the trading plan. This is a set of rules you set yourself for when you will take a trade. Some things which should be in your trading plan are:
- What time of day to trade
- What sessions to trade
- What instruments to focus on
- How many trades per day
- Take profit levels
- Stop Loss levels
- When and if to move stop loss to breakeven
- What strategy to use to determine entries/exits
There are countless other points which can go into your plan. The more you can put in your plan, the more confidant you can be when taking a trade, assuming you have back tested it sufficiently. Lets look at some examples of trading strategies.
There are a number of ways you can find profitably strategies. Youtube, paid or free training courses, other traders, books, ebooks and forums to name just a few. After finding a strategy which you feel confident with you should do the following steps to ensure its profitability:
- Learn your strategy front to back
- Back test your strategy with a good amount of data
- Analyze your back testing data and optimize your strategy
- Repeat steps 2 and 3 until your results look good
- When the back testing results are looking good, test the strategy on a demo account
- If your strategy proves profitable in back testing and on the demo account, congratulation! You have a winning strategy!
Here are a number of trading strategies and concepts which you might want to look into. I wont go into them in detail in this guide, but be sure to do plenty of research before trying them out.
- SMC (Smart Money Concepts) – This is where the trader attempts to predict what the institutional traders will do with their capital.
- ICT (Inner Circle Trader) – Similar to SMC with concepts designed by Michael J Huddleston.
- Trend Following – As it sounds, a trader typically waits for a small pullback before entering the trade in the direction of the trend.
- Mean Reversion – This is usually done in ranging markets. A trader will short when the price reaches resistance or go too far from the average and vice versa.
- Scalping – This is when a trader makes many trades a day, aiming to make a small profit with each trade.
- Swing Trading – This is when a trader takes a longer-term approach. A swing trader typically keeps a trade open over a number of days/weeks.
- Fundamental trading – This is when a trader attempts to predict how a market will react to certain news events or current affairs.
- Algo Trading – This is when the trader will design a program to take the trades automatically based on an algorithm.
Bootcamp Challenge - Final Thoughts
The 5%ers bootcamp challenge is an excellent way to get hold of some serious trading capital. But there is little chance of getting past the challenges on luck alone, traders must prove their ability.
Before taking on this challenge ensure you are ready and raring to go with a trading plan, risk management plan and a cool, calm and collected mindset. Trade with care and you will maximize your chances of passing this challenge.