Prop Firm Owner Reacts: The REAL Way to Win the Prop Firm Game

The Setup: Two Conflicting Philosophies

A video by trader Hus Mully titled "The Real Way to Win the Prop Trading Game" has sparked intense debate in the prop trading community. With over 6,000 views, the video advocates for aggressive risk-taking during prop firm challenges—specifically risking 3-4% per trade to achieve "time efficiency."

Matt, CEO of Lark Funding (a prop firm with over 3 years in business), watched the video for the first time and provided his unfiltered reaction. What emerged was a fascinating debate between two fundamentally different approaches to prop firm success.

The High-Risk "Time Efficiency" Argument

Hus Mully's position centers on a concept he calls "time efficiency." His core arguments:

The Income Problem

Mully points out that if you trade conservatively and make only $20,000 in prop firm profits over a year with an 80% profit split, you're left with $16,000. Divided by 12 months, that's $1,333 per month. After expenses for challenges, you might net $1,000 monthly.

His conclusion: This is less than minimum wage in most Western countries. It's not enough to quit your job. Therefore, you need to pass challenges faster and get more accounts funded quickly.

The Solution: Aggressive Risk-Taking

Mully's proposed solution involves:

• Phase 1 (Evaluation): Risk 3-4% per trade on forex accounts with 10% max drawdown and 5% daily drawdown
• Phase 2: Reduce slightly to 2.5% risk per trade
• Funded Account: Maintain 2.5% risk per trade, don't drop to conservative levels
• Multiple Accounts: Buy many challenges simultaneously, knowing most will fail, but the ones that pass will compensate

The philosophy: View the challenge fee as your only risk. If you spend $500 on a $100K challenge and blow it, you didn't lose $100K—you lost $500. Therefore, risk aggressively to pass quickly.

The Conservative Counter-Argument: Why This Doesn't Work

Matt's response challenges nearly every assumption in the high-risk approach. His disagreement is fundamental, not just tactical.

The Mathematics of Failure

Matt's point is mathematically sound: if your win rate remains constant but you increase risk per trade, you don't increase your expected value—you just increase volatility. You'll pass some challenges faster, but you'll also blow significantly more challenges. The net result? You're spending more money on failed challenges without proportionally increasing successful passes.

The Industry Reality Check

Matt provides critical context that Mully's video overlooks:

The issue? This trading data can't be monetized. Traders would spend thousands on challenges without passing, then eventually hit one lucky streak and make a massive payout with the same gambling approach. This creates an unsustainable business model.

The shift: Reputable prop firms are now actively restricting this type of trading activity. The "game has changed," but not in the direction Mully suggests. It's changed to prevent exactly the kind of trading he's advocating.

The Capital Reality

Matt makes a powerful point about risk psychology:

"If you only have $500 to your name and you spend $100 on a challenge, you spend 20% of your net worth on a challenge. Oh my gosh, I would be taking that so seriously. I wouldn't be risking more just because it's a cheaper account. My first FTMO challenge cost me $700 after exchange rate, which was one month's rent. I could not sleep at night. If you think I was going to risk a lot and blow one month's rent, you are crazy."

This highlights a critical psychological disconnect in the "time efficiency" argument. If you have limited capital, the last thing you should do is gamble it away faster.

Matt's Alternative: The 100% Pass Rate Strategy

Matt's approach is built on a simple principle that produced remarkable results:

Why This Works

The mathematics here are straightforward. By cutting risk in half when in drawdown:

• You give yourself more opportunities to recover
• You reduce the probability of hitting maximum drawdown limits
• You extend the time you have to catch a winning streak
• You dramatically increase your pass rate

The result: Matt passed 100% of his FTMO challenges. Not from exceptional trading skill, but from patience and adaptive risk management.

The Real Solution to the Income Problem

Matt doesn't disagree with Mully's assessment that $20K/year isn't enough to live on. He disagrees with the solution.

Wrong solution: Risk more per trade to pass faster
Right solution: Take more challenges with conservative risk management

If you need more income, the answer isn't to gamble harder—it's to manage more accounts with the same conservative approach that produces consistent passes.

Where They Agree: Multiple Firms Strategy

Despite their fundamental disagreement on risk management, both experts agree on one critical point: use multiple prop firms.

Recommended Firm Selection

Matt's advice: choose firms that have been in business for multiple years. The fact that over 100 firms went out of business in 2024 means longevity matters.

Examples of established firms:

• FTMO (industry leader, been around for years)
• Lark Funding (Matt's firm, over 3 years in business)
• Other firms with proven track records and consistent payout histories

The Trader vs. Gambler Distinction

Perhaps the most important distinction Matt makes is between two types of people in the prop firm space:

Matt emphasizes that if you want to eventually trade for hedge funds, manage institutional capital, or build a legitimate trading career, you need verifiable track records. Gambling-style trading produces data that no serious institution will accept.

The Business Model Perspective

As a prop firm owner, Matt provides insight into why certain trading behaviors are being restricted:

Respectable firms now use trading data to:

• Identify skilled traders who can be monetized through B-booking or data licensing
• Create sustainable profit models beyond just evaluation fees
• Build pools of traders who produce valuable, consistent trading data

Pure gambling produces none of this value. It's just random noise that firms can't use.

The Challenge Fee Mental Framework

Interestingly, both experts agree on how to view challenge fees mentally:

However, they diverge sharply on what this means practically:

Mully's interpretation: Since you're only risking the fee, you should risk aggressively on the simulated account
Matt's interpretation: Since you're risking real money on the fee, you should take the challenge extremely seriously and trade conservatively

The difference hinges on whether you focus on the simulated account or the real money at risk in challenge fees.

The Verdict: Which Approach Actually Works?

From a mathematical and sustainability standpoint, Matt's conservative approach has significant advantages:

Evidence for Conservative Approach:

• 100% pass rate on FTMO challenges (Matt's personal result)
• Lower total expenditure on challenge fees due to fewer failures
• Creates sustainable trading data that firms value
• Builds genuine skills rather than relying on luck
• Produces track records usable for career advancement

Evidence Against High-Risk Approach:

• Over 100 firms went bankrupt partly due to allowing this behavior
• Doesn't improve expected value, only increases volatility
• Requires substantially more capital for the volume approach to work
• Creates boom-bust income cycles rather than stability
• Produces unusable trading data

The Middle Ground Solution

Perhaps the optimal approach combines elements of both philosophies:

1. Use conservative risk management (cutting risk in half in drawdown) to maximize pass rate
2. Take multiple challenges across 2-3 different established firms
3. Cycle between firms for payout efficiency while maintaining conservative trading
4. Build capital gradually through consistent payouts, then scale by managing more accounts
5. Create valuable track records that open doors to larger opportunities

This approach provides the income scaling that Mully correctly identifies as necessary, but through multiplication of conservative successes rather than gambling for quick wins.

Final Thoughts: Choose Your Path Wisely

The debate between aggressive "time efficiency" and conservative risk management ultimately comes down to a fundamental choice: do you want to be a trader or a gambler?

Both paths exist in the prop firm space. The gambling path might produce occasional spectacular wins. But as Matt points out with the industry bankruptcy statistics, it's not a sustainable long-term strategy—not for firms, and not for traders.

The trading path requires more patience. It takes longer to build significant income. But it produces:

• Near 100% pass rates when done correctly
• Sustainable income streams
• Valuable skill development
• Usable track records for career advancement
• Long-term survival in an industry where hundreds of firms have failed

As Matt concludes: "This is just an argument against his argument, not a personal attack." Both content creators want traders to succeed. They simply disagree fundamentally on what success looks like and how to achieve it.

The question for you: which path will you choose?

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