Challenge structure
Evaluation (challenge)
A paid test run by a prop firm. You trade a simulated account and must reach a profit target without breaking any rule. Pass it and you get a funded account; break a rule and the attempt ends. See: How to pass a prop firm challenge
One-phase vs two-phase evaluation
A one-phase (one-step) evaluation has a single profit target. A two-phase (two-step) evaluation has two in a row, usually a bigger target in phase 1 (often 8–10%) and a smaller one in phase 2 (often 5%). See: One-phase vs two-phase
Profit target
The profit you must reach to pass, usually a percentage of the starting balance. A 6% target on a $50,000 account means reaching $53,000.
Minimum trading days
The minimum number of days you must trade before you can pass or request a payout, even if you hit the target sooner.
Time limit
The maximum number of days allowed to reach the target. Many firms have removed it. Where it exists, it adds another way to fail: running out of time.
Reset
Paying to restart an evaluation from the starting balance after a breach. Usually cheaper than buying a new evaluation, but it still adds to your cost per funded account.
Activation fee
A one-time fee some firms charge after you pass, to activate the funded account. Count it in your real cost of getting funded.
Funded account
The account you trade after passing. You keep a share of the profit, but the drawdown and other rules still apply, and most firms add payout conditions. At most firms it is still simulated capital. See: Why funded traders don't get paid
Drawdown and risk rules
Max drawdown (max loss limit)
The most the account can lose before it is closed. Crossing it ends the evaluation or the funded account.
Static drawdown
A max loss measured from the starting balance that never moves. On a $100,000 account with a 10% static drawdown, the account fails at $90,000, however much profit you made first.
Trailing drawdown
A max loss that follows your highest balance up and never moves down. Profit doesn't add room: after you make $1,000, the breach line also rises $1,000, until it locks. See: Trailing drawdown explained · Trailing drawdown calculator
EOD trailing drawdown
A trailing drawdown that updates only from your end-of-day balance. Open profit during the day doesn't raise the line; only a higher daily close does.
Intraday trailing drawdown
A trailing drawdown that updates in real time from your highest balance, including open profit. If a trade runs up and comes back, the line has already moved up, so it is harsher for traders who hold through pullbacks.
Trail lock
The point where a trailing drawdown stops moving, often when the breach line reaches the starting balance (or starting balance plus a small amount). After that it behaves like a static drawdown.
Breach line
The exact balance at which the account fails. Our free calculator shows it for any firm and account size. See: Trailing drawdown calculator
Daily loss limit
The most you can lose in one trading day. Depending on the firm, hitting it either fails the account or only stops trading for the rest of that day. That difference changes your odds a lot, so check each firm's page.
Consistency rule
A cap on how much of your total profit can come from a single day, for example "your best day must be under 40% of total profit". It can apply during the evaluation, on the funded account, or only when you request a payout. See: The consistency rule
Contract / position limit
The maximum number of contracts (futures) or lots (forex and CFDs) you can hold at once. It usually grows with account size.
News trading rule
Restrictions on opening or holding trades around high-impact economic releases. Some firms ban it, some allow it, some restrict it only on funded accounts.
Scaling plan
Rules that raise your account size or contract limit as you make profit over time.
Payouts
Profit split
The share of funded-account profit you keep, for example 80%, 90% or 100%. It only matters on the runs that actually reach a payout. See: How prop firm payouts work
Payout buffer (safety net)
A minimum profit you must hold above the starting balance before you can withdraw. Money below the buffer stays in the account as protection against the drawdown.
Winning day
A trading day that closes with at least a minimum profit set by the firm. Many futures firms require a number of winning days before each payout.
Payout cycle
How often you can request a withdrawal: on a fixed schedule (for example every 7 or 14 days) or on demand once the requirements are met.
Payout cap
The maximum you can withdraw per request, often a fixed dollar amount or a percentage of the balance.
Trading statistics
Win rate
The percentage of trades that close in profit. On its own it says little: a 40% win rate with large winners can beat a 60% win rate with small ones. See: What win rate do you need?
R-multiple (reward-to-risk)
A trade's result measured in units of what you risked (R). A +2R trade made twice the amount risked. Average win divided by average loss is your reward-to-risk ratio.
Expectancy
The average result per trade: (win rate × average win) − (loss rate × average loss). You need positive expectancy to pass consistently, but it isn't enough on its own: the rules can still end a winning strategy.
Profit factor
Gross profit divided by gross loss. Above 1.0 the strategy made money over the sample; below 1.0 it lost money.
Losing streak
A run of consecutive losing trades. Streaks are normal: at a 50% win rate there is about an 81% chance of at least one streak of 5 losses in 100 trades. See: How much to risk per trade
Simulation outputs
Monte Carlo simulation
Running thousands of randomized trade sequences built from your statistics to see the full range of outcomes instead of a single guess. Our simulator plays every simulated trade against the firm's exact rules. See: How to use the simulator
Pass probability
The share of simulated evaluations that reach the profit target without breaking a rule.
Payout probability
Among the runs that passed, the share that reach at least one withdrawal on the funded account.
Withdrawal probability (joint withdrawal)
The end-to-end chance of passing AND reaching at least one withdrawal: pass probability × payout probability. This is the number that decides whether an evaluation is worth buying.
Risk of ruin
The probability of losing a set amount of capital, such as your whole evaluation budget, before your edge pays off.
Expected profit per challenge
The average net result of one evaluation attempt across all simulated runs, after the evaluation fee and including any funded-stage withdrawals.
Percentiles (P5, P25, P50, P75, P95)
Points in the spread of simulated outcomes. P50 is the median. A quarter of runs end below P25 and a quarter above P75; 5% end below P5 and 5% above P95.