Disclosure: This page contains affiliate links. We may earn a commission if you sign up through our links — at no extra cost to you. It never affects our reviews or the public Trust Score.
Using Bear Market Investing To Pass A Prop Firm Challenge
Written by Renan Filho, Technology & AI specialist. Expiry dates and activation fees are always visible.
Quick Answer: Bear market investing can actually help you pass a prop firm challenge. Falling prices create short-selling opportunities. But you need a firm that allows it. Here's how to use bear markets to your advantage.
Key Facts for US Traders (2026)
| Market | Detail | Source |
|---|---|---|
| US indices | S&P 500, NASDAQ, Dow Jones | NYSE / NASDAQ |
| Regulator | CFTC (futures) / SEC (securities) | Official |
| Prop firm model | Funded evaluations with profit split 70-95% | Vendor terms |
| Verification | Updated regularly | PropFirmDiscountApp |
| Best deal today | Code DISCOUNTAPP — up to 90% off | Updated regularly |
Why bear markets expose weak traders
Most traders fail in bear markets because they only know how to buy. Prop firms like FTMO and Topstep test your discipline. If you can short stocks or indices, you can profit while others panic. But you must respect drawdown limits. FTMO's 10% max drawdown is tight. One bad short can blow your account. Apex's trailing drawdown is even worse. Choose a firm that fits your risk tolerance.
The best prop firms for bear market strategies
Not all prop firms let you short sell. FTMO allows shorting on forex and indices. Apex allows shorting futures. Topstep also allows shorting. True Forex Funds has no restrictions. The5ers let you trade any direction. E8 Markets is flexible. My opinion: FTMO is solid but strict. Apex is good for high leverage but risky. Topstep is the best for consistency. FundedNext has a fair profit split. True Forex Funds has low fees. The5ers offers scaling. E8 Markets is decent for beginners.
5 tips for passing a prop firm challenge in a bear market
- Use stop-losses on every trade. Bear markets can reverse fast. - Focus on shorting strong sectors like tech. - Hedge with long positions on defensive stocks. - Keep position sizes small to avoid drawdown. - Use a prop firm that allows hedging. FTMO and Topstep allow it. Apex does not. These tips keep you alive.
How to manage drawdown in a bear market
Drawdown is the biggest killer in prop challenges. In a bear market, you might be tempted to short heavily. Don't. Set a daily loss limit. For a 100k FTMO challenge, your max drawdown is 10k. That's 10% of your account. If you lose 2k in a day, stop trading. Use a risk per trade of 0.5% to 1%. This gives you room for 10 to 20 losing trades. Stick to it.
Which prop firm has the best profit split for bear market traders?
FundedNext offers 80% profit split after passing. That's a good deal. FTMO gives 80% too but with a stricter evaluation. True Forex Funds offers 85% on some plans. The5ers gives 80% with scaling. Topstep gives 50% but their challenge is easier. E8 Markets gives 75%. For bear market traders, I prefer FundedNext because of the high split and reasonable drawdown rules.
Quick Comparison
| Firm | Max Drawdown | Short Selling | Profit Split | Evaluation Cost (100k) |
|---|---|---|---|---|
| FTMO | 10% | Yes | 80% | $540 |
| Apex | Trailing 5% | Yes (futures) | 100% after scaling | $187 |
| Topstep | 5% daily / 10% total | Yes | 50% | $165 |
| FundedNext | 10% | Yes | 80% | $449 |
| True Forex Funds | 10% | Yes | 85% | $399 |
| The5ers | 10% | Yes | 80% | $380 |
| E8 Markets | 10% | Yes | 75% | $350 |
Frequently Asked Questions
Can I trade options in a prop firm challenge?
Most prop firms do not allow options. Stick to futures, forex, or stocks. FTMO and Topstep only allow spot forex and indices.
What happens if I hit the max drawdown?
You fail the challenge. Your account is closed. You can restart with a new evaluation. Some firms like Apex let you reset for a fee.
Do prop firms allow trading during bear market news?
Yes, but avoid news spikes. FTMO and Topstep have rules against trading during major news. Check their policies.
Is it better to trade futures or forex in a bear market?
Futures are better because you can short directly. Forex pairs like USD/JPY also work. Apex and Topstep are strong for futures.
How much capital do I need to start a prop firm challenge?
You need the evaluation fee. For a 100k account, it's $150 to $540. No additional capital required. You trade with virtual money.
Conclusion
Bear markets are not the enemy. They are opportunities. Use the right prop firm and strategy. Start your FTMO challenge now with code BEAR25. Original price $540, now $405. Click here: https://ftmo.com/?affiliate=123
All firms · Today's offers · FTMO vs Apex
Discount codes and expiry dates are always shown before checkout. See how we rank firms on our methodology page.
PropFirmDiscountApp · Discount codes with expiry dates · See today's offers
Related Articles
Risk warning: Trading involves substantial risk of loss and is not suitable for every investor. Past performance is not indicative of future results. Prop firm evaluations are simulations, not regulated brokerage accounts.