What is Prop Firm Challenge?
A paid evaluation where traders prove they can hit a profit target while respecting drawdown limits — passing earns a funded account.
A prop firm challenge (also called an evaluation or combine) is a paid assessment designed to identify disciplined traders. Pass the evaluation and the firm funds your account — you trade their capital and split the profits.
Typical challenge structure:
| Phase | Profit Target | Max Drawdown | Time |
|---|---|---|---|
| Phase 1 | 8–10% | 10% overall / 5% daily | 30 days |
| Phase 2 | 4–5% | 10% overall / 5% daily | 60 days |
| Funded | — | 10% overall / 5% daily | Ongoing |
Major prop firms and their rules:
| Firm | Phase 1 Target | Daily Drawdown | Overall DD |
|---|---|---|---|
| FTMO | 10% | 5% | 10% |
| FundedNext | 8% | 5% | 10% |
| BrightFunded | 8% | 5% | 10% |
Common failure reasons:
1. Breaching the daily drawdown on a single bad day
2. Overtrading trying to hit the profit target quickly
3. Holding positions over high-impact news events
4. Not using a stop-loss
Sizing strategy for challenges:
Risk 0.5–1% per trade. With a 5% daily drawdown limit and 1% risk, you can lose 5 trades in a day before failing — enough buffer for bad days without reckless sizing.
Compare the major prop firms:
Related Calculators
FTMO Calculator
Track your FTMO daily drawdown limit in real time. Pre-configured for FTMO's 5% daily loss rule on Challenge and Verification accounts.
FundedNext Calc
Track your FundedNext daily drawdown in real time. Pre-configured for FundedNext's Stellar 2-Step daily loss limits across all account sizes.
BrightFunded Calc
Track your BrightFunded daily drawdown in real time. Pre-configured for BrightFunded's 5% daily loss limit across all account sizes.