Red Flags to Watch Out for in The 5%ers Challenge: What You Need to Know

prop trading - the 5&ers

The 5%ers has earned a reputation as a reliable proprietary trading firm, offering traders the chance to prove their skills and receive funding. However, like any trading program, it comes with specific rules and conditions that may raise concerns or cause confusion for participants. Here’s a breakdown of the red flags you should watch for when taking on a prop trading firm challenge, based on common complaints and overlooked details.


1. Strict Risk Management Rules

  • What It Is: The 5%ers enforces strict rules on maximum drawdown and daily loss limits. For example:
    • Low-risk accounts have a 4% drawdown limit.
    • Aggressive accounts have a 6% drawdown limit.
  • Why It’s a Red Flag: These limits are absolute, meaning even a small breach—by as little as a few dollars—will disqualify you. Some traders find these limits restrictive, particularly during volatile market conditions.
  • What to Do: Monitor your trades closely, avoid over-leveraging, and always have a clear stop-loss in place.

2. Tight Profit Targets

  • What It Is: To pass the challenge, traders must hit specific profit targets within the evaluation phase. For example:
    • Low-risk programs require a 6% profit target.
    • Aggressive programs require a 12% profit target.
  • Why It’s a Red Flag: Some traders feel the profit targets, combined with low drawdown limits, make it difficult to meet requirements, especially during slow market conditions.
  • What to Do: Focus on steady, consistent trades rather than high-risk strategies that could jeopardize your account.

3. Profit Targets Tied to Starting Balance

  • What It Is: The profit target is based on the starting balance rather than adjusted equity.
  • Why It’s a Red Flag: If you experience a drawdown early in the challenge, it can become significantly harder to recover and meet the profit target.
  • What to Do: Plan your trades carefully at the start to avoid an early setback that could make recovery nearly impossible.

4. Scaling Requirements

  • What It Is: To scale up your funded account, you must meet additional profit milestones and adhere to strict risk management rules.
  • Why It’s a Red Flag: Some traders report frustration with the time it takes to scale up, especially compared to other prop firms that offer faster growth opportunities.
  • What to Do: Understand the scaling requirements upfront and assess whether they align with your long-term trading goals.

5. Fee Non-Refundable Policy

  • What It Is: The entry fee for the challenge is non-refundable, even if you fail due to a minor rule violation.
  • Why It’s a Red Flag: Traders who fail by small margins feel they should be allowed to retry without paying the fee again, but this is not allowed.
  • What to Do: Be fully prepared before starting the challenge to minimize the risk of failure and paying additional fees.

6. Limited Instrument Choices

  • What It Is: While The 5%ers offers a variety of instruments, including forex, indices, stocks, and crypto, the selection may still feel limited compared to some competitors.
  • Why It’s a Red Flag: Traders accustomed to niche instruments or more diverse trading options may find the available list restrictive.
  • What to Do: Review the list of available instruments beforehand to ensure your preferred assets are included.

7. Subjective Evaluation of Strategies

  • What It Is: The 5%ers reserves the right to disqualify trades or accounts if they determine that a strategy doesn’t align with their guidelines, even if the trades technically comply with the rules.
  • Why It’s a Red Flag: This subjective evaluation has led to complaints from traders using unconventional methods, such as Martingale or grid strategies.
  • What to Do: Clarify your strategy with support beforehand if you think it might be considered unconventional.

8. Payout Delays

  • What It Is: While The 5%ers generally processes payouts within 7 business days, some traders have reported delays due to administrative reviews or compliance checks.
  • Why It’s a Red Flag: Delays can disrupt cash flow, especially for traders relying on timely payments.
  • What to Do: Communicate with the support team regularly and ensure you meet all payout requirements, including submitting documentation on time.

9. No Guarantee of Consistent Trading Conditions

  • What It Is: Market conditions can vary significantly during the challenge, especially during periods of high volatility.
  • Why It’s a Red Flag: Some traders have reported difficulty adjusting their strategies to sudden shifts in market behavior, such as increased spreads or slippage.
  • What to Do: Be prepared to adapt to changing market conditions and ensure your strategy accounts for potential fluctuations.

10. Limited Flexibility in Account Upgrades

  • What It Is: Once you select a low-risk or aggressive plan, you cannot switch plans or adjust account parameters mid-challenge.
  • Why It’s a Red Flag: Traders who realize they’ve chosen the wrong plan for their style must start over, paying the fee again.
  • What to Do: Carefully review all plan details before committing to a specific program.

How to Avoid Issues in The 5%ers Challenge

  1. Understand the Rules Thoroughly: Take the time to read the official rulebook and ensure you’re clear on all requirements.
  2. Start Small: If you’re unsure about your readiness, begin with a smaller account size to minimize risk.
  3. Use Effective Risk Management: Stick to proper lot sizes, use stop losses, and avoid overtrading.
  4. Communicate with Support: If you’re unclear about any rule or requirement, reach out to The 5%ers’ support team for clarification.
  5. Plan for the Long Term: Treat the challenge as a stepping stone for consistent growth rather than a quick path to large capital.

Final Thoughts

The 5%ers offers a structured and transparent path to funded trading, but its rules and requirements can be demanding. By understanding the red flags and preparing accordingly, traders can navigate the challenge more effectively and increase their chances of success. While some traders have expressed frustration over specific rules, those who adhere to the guidelines and plan strategically can benefit greatly from the opportunities The 5%ers provides.

about The Firm ​

The 5%ers

The 5%ers is a proprietary trading firm offering funded accounts with profit splits up to 100%. Traders can qualify by completing evaluation programs that test their consistency and risk management skills. Account sizes and evaluation models vary, catering to different trading styles. The firm supports trading on MT5, providing access to forex, indices, commodities, stocks, and cryptocurrencies. With strict rules on daily loss and overall drawdown, The 5%ers focuses on disciplined trading. They also offer educational resources and a supportive community to help traders develop their skills and succeed in the program.

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