Inner Musings On Funded Challenges

Date: February 19, 2023

Outline

00:19 - Today’s Topic: The Measure Of The Tape -.

06:25 - Gap risk and the potential draw on liquidity.

12:48 - No secret weapon in Enigma.

17:13 - When you get invited to a party, bring your favorite outfit.

23:35 - Using a bullish divergence and a slow stochastic.

27:34 - What really makes the market go up or go down -.

32:57 - What has helped support the narrative that the market is in a range?

37:59 - The problem is you’re not spending enough time looking at what market profile you’re in.

43:58 - What to Expect From The Market In February.

50:34 - Daily High and Low of the Week.

55:20 - What was the range of the weekly high and low over a 15 minute timeframe?

01:01:19 - How do you know when a bearish breaker is going to happen?

01:06:34 - You can’t fake price.

01:16:46 - Are you more fearful of losing your job or not being able to pay for groceries because the world is about to go upside down?

01:22:55 - Why am I doing this? Why am I doing this?

01:26:58 - What difference does it make if you don’t have boundaries?

01:32:22 - Why he stopped the 2021 mentorship.

01:39:07 - Mentorship is not something that makes one exempt.

01:45:47 - How to live your life the way you want to live your life -.

01:52:03 - How to overcome the fear of hurting yourself in these markets.

01:59:13 - The first half of my life was very selfish.

02:03:38 - It’s therapy, it’s therapy.

02:08:21 - Your best friend is your journal -.

02:14:06 - Don’t live your life like you don’t have any money.

02:21:17 - The money in my bank account doesn’t make me happy.

This is what I’m trying to teach you: don’t treat this like a game. It isn’t a video game — it’s war. It’s absolute, brutal, unforgiving war. You’re going to feel it inside you, even in a demo account. Your pride, your sense of being right or wrong, everything gets pulled into the equation. The outcomes matter to you.

You're going to reset your demo account and say, “This is bullshit — that didn’t happen. Let me start again.” Unfortunately, that’s disastrous: you’ve conditioned yourself not to respect risk and to expect only sugar-coated outcomes.

I blew my first accounts. Look at me now—I can tell you what the market will do. It’s all part of the learning process. You have to find yourself, and that means falling down and figuring it out. It hurts, but that pain keeps you from taking bigger risks that could knock you down harder the next time, maybe so hard you can’t get back up. You want to learn in the right conditions.

👉

You need to build experience in spotting where the market is unlikely to go and where it’s most likely headed. You also need to know what kind of retracement is reasonable. That’s how you find setups where your stop loss can be under five handles.

I’ve shown stops tighter than one handle, but that’s not necessary. A five-handle stop or less is a solid baseline. For most Inner Circle Trader students this year, that level of risk is manageable and comfortable.

Trading requires assuming risk—it’s the nature of the business. If you’re unwilling to take on any risk, you won’t make it. That’s the truth. Losses are part of the game, and you need to accept them if you want longevity.

It all comes down to perspective: fear can paralyze you, while unrealistic expectations can blind you. But risk is everywhere in life. Your next breath isn’t guaranteed. A simple trip to the store has countless risks, but you don’t dwell on them—you’ve experienced it enough to dismiss the fear. You even know the potholes on your road and how to avoid them without looking.

Trading works the same way. Watching candles unfold minute by minute builds that familiarity. Over time, experience replaces fear.

If you’re wrong, that’s exactly what the stop loss is for—to limit your loss. It’s not an excuse to say, “Okay, I’ll buy it at a higher price so I can take an even bigger hit when I’m wrong.” That’s what you must avoid. That kind of thinking should be kicking your ass right now.

Chasing price is what happens when you buy after the fact. Instead, buy into a down-close candle. That habit will save you far more times than it will hurt you. Yes, sometimes you’ll still be wrong, and it’ll go lower to hit your stop, but overall it protects you.

What you do not do is buy a candle after a fair value gap expansion has already started. If you chase it there, it can retrace, push deeper into that gap, close it entirely, or run straight into your stop. Either way, you’re taking on more loss than necessary.

So, how do you pass the $50,000 funded account challenge? The profit target is 6%—that’s $3,000. Honestly, that’s nothing. Over four weeks, anybody with discipline can find that. Notice I said four weeks. Yes, they require a minimum of five profitable days before your first payout, but that doesn’t mean you have to cram the whole challenge into five days. Who said that?

They let you trade up to five contracts. Forget that. Scratch it. Don’t even consider it. That’s suicide. This is about building a steady, secondary income stream. Bread-and-butter money. If you can cover your car note, your rent, your mortgage—or even a large chunk of it—you’re winning. Don’t let anyone tell you otherwise.

The rules say your max daily loss is $1,000, and your total loss limit is $2,000. Blow past that, and you’re done. With one ES contract, every handle is $50. That means $1,000 is 20 handles. Have you ever seen me use a 20-handle stop? No. Never. I teach you to work off the 1-minute chart, where five handles is plenty. Most of your stops will be even tighter, but if you need five, use five. Ignore the snobs who act like anything more than two handles is amateur. The stop has to fit the setup, not your ego.

For this challenge, no pyramiding, no scaling in. One trade, one shot. One ES contract. That’s it. And guess what? Running one contract removes 90% of the stress. You’re not freaking out watching $500 swings every tick. One contract makes or loses $50 per handle, and that’s manageable.

I proved it with Thinkorswim—industry standard. One contract. Losses included. Still doubled the account in five weeks. Showed the statements. Transparent. That’s the reality.

So when you look at that 6% target, remember—this is the same number I gave on BabyPips years ago: 6% a month. Compound that every month and you double your equity in a year. Doesn’t matter if your account is $5,000 or $50,000. Six percent per month = 100% a year.

Some of you hear that and think, Wow, doubling a $50k account would change my life. And you’d be right. But others still think, That’s not enough. And that mindset is exactly why most people blow it.

How much are you making right now from your trading? Stop thinking about money backwards. You’re trying to leap straight into Olympic-level returns—“I need a $15,000 first withdrawal, I need five figures.” Why not just aim for $1,000, cover your groceries, maybe your electric bill, and feel that weight come off your shoulders? That’s the right mindset. But nobody writes books about that, nobody makes YouTube videos about that except me. That’s real-world shit. That’s how you master money—by not expecting to get rich quick, because the market will teach you fast that it doesn’t work that way.

The market moves up and down all day long. Five handles a day—that’s the aim. If you risk 2.5 handles to get five, even better. You can make money trading one-to-one. The only reason people say otherwise is because most traders suck and don’t know how to read price. If you suck, yes—your losses will eat your wins. But I’m teaching you how to read price action, to know when it’s most likely to go up, down, or chop sideways. That’s the difference.

So, your model is simple: one shot, one kill. Risk no more than five handles. Bread-and-butter setup: risk five, take five, and get out. Don’t worry about it not being 2:1 or 3:1. We’re not gambling fifteen times an hour. We’re waiting for very specific setups in specific time windows—London, New York morning, or New York afternoon. If the window isn’t open, you don’t trade. The casino isn’t open. Sit your ass down and wait.

That’s how you pass these funded challenges. That’s how you build consistency.

Our stop is five handles or less, and that’s where we aim. We have four weeks to hit the $3,000 profit target, which breaks down to $750 per week. Trading one E-mini contract, that’s only 15 handles—completely achievable.

Look for the ideal day that offers the opportunity for a full 15-handle run. If you hit it, you’re done for the week. Don’t try to force more trades; trust the process. The strategy repeats daily, monthly, and yearly as long as markets are open.

Focus on one setup that can give the full 15 handles. It may involve a medium or high-impact news driver or a shift in market structure. Use a 15-minute chart for clarity, take the trade if it fits your skill set, and let the week’s goal be achieved without overtrading.

Take the 15 handles over three trading days—just three five-handle runs. That’s $750 per week. This removes pressure; you don’t need to rush. Ignore social media, trolls, and outside opinions—they’re not paying you.

You can split it however it fits your schedule:

• Two trades at 7.5 handles each over two days, or
• One trade per day, three days, five handles each.

Trade in the morning or afternoon session, or use the lunch hour for reversals. Between 8:30 and 4:00, there are multiple setups each day. On a one-minute chart, five-handle moves are abundant—just focus and take them.

Once you learn this method, the challenge becomes easy. Avoid overtrading—don’t risk five contracts or a full 2% drawdown. Aim for about $300 per day, roughly five handles.

Break the 15 handles over five days—three handles per day if needed. Keep it manageable, don’t rush, and focus on consistent, small gains rather than chasing large, risky moves.

Focus on profitability and risk management, not “correctness.” Preserve capital first. Daily, the E-mini S&P moves three handles countless times—use that.

Risk up to five handles, but exit after a small move—like three handles—to practice capturing consistent gains. This teaches you to overcome fear, trade efficiently, and profit even in low-volatility days. Big moves are nice, but consistent small wins sustain your account.

It's just three handles. Just three handles. It's happening all day long. You're not thinking about how to do it. Market moves into a fair value gap and trades higher—it hasn’t reached your buyside liquidity pool or premium yet. You can use an order block to buy with a five-handle stop loss and three-handle limit. Do that multiple times, and there’s your 15 handles, in and out in a minute or two. That’s high-frequency trading—micro fluctuations adding up. You don’t need a full run or to reach a liquidity pool; three points of fluctuation happen constantly. You can see this on a 15-second chart every 15 minutes. High-frequency algorithms aren’t waiting—they’re constantly chipping away, making billions. You’re focused on just meeting your own ends. Start small, one contract, manage risk, and build. One contract with lots of small gains and controlled losses can generate $25,000 over five and a half weeks. Repeat this seven months out of the year, and you have a sustainable approach. You’re not expected to trade every month or every day. Learn to lose correctly—it won’t hurt you. Practice in a demo, make mistakes, see how to recover, and remove fear from trading.

Price will always have an open, high, low, and close. As long as the market is open, this pattern repeats. Some days will be volatile, others choppy, and you may lose—but that’s just one day. The next day, the same phenomena repeat. This is the bottom-of-the-barrel approach: simple math and numbers. The key is understanding where these price fluctuations occur, like on one-minute charts, because they repeat constantly.

Every day presents opportunities, but it might not be your opportunity—and that’s fine. I’m showing you the lowest threshold required to find something. To overcome fear of entering a trade—fear it might go wrong or move against you—you push the button in a demo. As soon as it moves a small amount—three ticks in my bond market example, less than $100—you close it. Then observe what happens, log it, and repeat. Track how long it takes to get small moves, like three handles. Use a five-handle stop loss, but don’t worry. This is teaching yourself to overcome fear by desensitization—small, controlled “laboratory experiments” on a one-minute chart.

There will be times when the price runs to your stop loss—that’s fine. Pay attention: how long did it take? What did you miss? Did it give any insight? Many times, the move will hit your three-handle target almost immediately, your limit order closes, stop cancels—you’re out, maybe $150. Track how long these experiments take, the success rate, and after about 50 of them, move to four-handle targets. Keep repeating—risk five for five, practice over and over. Once you can do this consistently for three months on a demo, with no fear and no concern for outcome, then you’re ready for live trading. Until then, you’ll fail.

You have to do these things correctly, or you’ll pay the price. If you don’t, your learning will take longer than necessary, you’ll lose money needlessly, and you’ll stress yourself out. Doing it wrong builds mental scar tissue—thinking you can be the exception only reinforces that damage.

Why invest the time, money, energy, and emotions? Because if you rush in unprepared—into funded accounts, live trading, or all that chaos—you’ll fail and feel regret. That regret creates mental scar tissue. Scar tissue isn’t elastic; it restricts you, making fear, anxiety, and performance pressure much harder to overcome. Many young traders treat their failures like badges of honor, comparing scars from lost accounts like it’s a competition. That’s dumb and wastes time. Right now, the environment is harsh, and mistakes cost real money—so being reckless only makes it worse.

We’re the rebels. We can flip off the system, say “fire me, I’m unemployable, fuck off.” But what happens when an unexpected event hits? The stock market doesn’t open, central bank digital currencies change forex, or currencies disappear and unify—are you ready? Back in 1992, looking at the S&P daily range with what would now be a typical stop loss, I couldn’t imagine the volatility we see today. It was completely unrealistic to anticipate the opportunities and challenges we now take for granted.