Prop firm challenge structure: targets, limits, phases
A challenge is defined by three parameters: profit target, daily loss limit and maximum loss. Each is explained below.
Three parameters
Profit target: required gain to clear a phase, typically 8% or 10%.Daily loss limit: maximum loss in one trading day, typically 4% or 5%.Maximum loss: maximum total decline, typically 8% or 10%. Breaching either limit terminates the attempt.Phase count
One, two or three phases. A standard 2-Step: 8–10% in phase 1, 5% in phase 2. Completion of the final phase triggers the funded account.
Instant accounts skip evaluation entirely; see instant funding and 1-Step vs 2-Step.
Minimum days and time limits
Some firms require 3–4 minimum trading days. Time limits are largely obsolete, but a 30-day inactivity closure is common.
Post-pass process
Trade review, then KYC: typically a MyKad or passport and proof of address. The funded account keeps the same loss parameters without a target; profit is split at the agreed rate.
FAQ
Typical duration?
Trader-determined. Without a time limit, two weeks to two months is common.
Outcome of failure?
The fee is forfeited. Some firms offer discounted or free retries.