Guide
How prop firm challenges work
Last reviewed: 16 September 2026·Tradelyze
A prop firm challenge is a paid trading evaluation in which you must reach a profit target without breaking the firm's loss limits. Pass it, sometimes in two phases, and the firm gives you a funded or payout-eligible account. Break a loss limit once and the attempt usually ends, however much profit came before.
In plain English
You pay a firm for a test account. To pass, you have to make a set amount of profit without losing too much in one day or in total. Some firms also want the profit spread over several days. Pass, and the firm lets you trade an account where profits can be paid out, sometimes after a second test. Lose too much even once, and that attempt is usually over.
New to testing strategies? Start with what backtesting is. Already know the rules? Go straight to prop firm rules and backtest metrics.
What is a prop firm challenge?
A prop firm challenge is a paid evaluation of your trading. A prop firm, short for proprietary trading firm, is a company that lets traders use an account under its rules and pays out part of the profits. It sells these evaluations to find traders it will back. Traders who pass get a funded or payout-eligible account. Firms also call a challenge an evaluation, a combine or a funded account evaluation.
The account you trade during a prop firm challenge is usually simulated, meaning no real money is at risk in the market. Topstep's help center calls its Trading Combine “a simulated account with one rule and two objectives.” FTMO sizes its accounts in “Initial Simulated Capital.”
Every prop firm challenge mixes two kinds of rule. Objectives are things you must reach, such as a profit target or a minimum number of trading days. Limits are lines you must never cross, such as a daily loss limit or a maximum drawdown. Missing an objective usually means you have not passed yet. Crossing a limit usually ends that attempt.
A prop firm challenge matters for your money because the fee is spent whether or not you pass. Topstep's Program Overview says the Trading Combine “requires a monthly subscription.” So the question to answer before paying is not whether your strategy makes money over a year. It is whether the strategy can reach the target without crossing a limit even once.
What happens in each phase of a prop firm challenge?
A prop firm challenge runs in up to three stages. Firms name the stages differently, and not every program has all three.
- Evaluation. The first phase. You trade the test account toward a profit target while staying inside the loss limits. FTMO calls this phase the FTMO Challenge; Topstep calls it the Trading Combine.
- Verification. A second phase, used only in two-step programs. It is another round of the same test, and the target can differ. FTMO's 2-Step Challenge has a Verification phase with a 5% target; its 1-Step Challenge has none.
- Funded stage. The account you earn by passing, where profits can lead to payouts. The profit target usually goes away, but other rules stay. FTMO calls this the FTMO Account. Topstep's first funded stage is the Express Funded Account, and its Live Funded Account comes later, when Topstep's Risk Team calls a trader up.
| Program | Stages | Profit target | Minimum trading days | Source |
|---|---|---|---|---|
| FTMO 2-Step Challenge | FTMO Challenge → Verification → FTMO Account | 10% of the Initial Simulated Capital, then 5%; none on the FTMO Account | At least 4 Trading Days in each phase; none on the FTMO Account | FTMO, Trading Objectives |
| FTMO 1-Step Challenge | FTMO Challenge → FTMO Account | 10% of the Initial Simulated Capital | None listed for this challenge; its Best Day Rule means one day alone cannot pass | FTMO, Trading Objectives |
| Topstep | Trading Combine → Express Funded Account (Standard or Consistency path) → Live Funded Account | Set in dollars by account size: $3,000 on a 50K account, $6,000 on 100K and $9,000 on 150K, as listed on 16 September 2026. Topstep's overview lists no Profit Target for the two funded stages | “You can pass in as few as two days” | Topstep, Trading Combine Parameters, Topstep Program Overview and Consistency at Topstep |
On a $100,000 FTMO 2-Step account, those targets are $10,000 in the first phase and $5,000 in Verification. Time limits vary by firm and by program. This page found no time limit for either firm's challenge on the pages it cites, so read the terms of the exact account you buy. Tradelyze does not check time limits.
What are the five rules in a prop firm challenge?
The prop firm programs on this page build their challenges from five types of rule. Two are loss limits that usually end an attempt. Two are objectives you must reach. One caps how much of the profit a single day may supply. Firms change the numbers far more often than the types of rule, so learn the types first.
Daily loss limit
A daily loss limit caps how much the account may lose within one trading day. FTMO's Trading Objectives page sets the Maximum Daily Loss at 5% of the Initial Simulated Capital on the 2-Step Challenge and 3% on the 1-Step. On a $100,000 2-Step account that is $5,000 a day, and the amount does not grow as the account grows. Firms differ on when the day resets, whether open trades count, and whether hitting the limit fails you or only pauses trading. How a daily loss limit is measured covers each difference.
Maximum drawdown (static or trailing)
A maximum drawdown limit caps how far the account may fall in total. A drawdown is a fall from an earlier level. A static limit is measured from the starting balance and never moves. FTMO's 2-Step Challenge sets a static Maximum Loss of 10% of the Initial Simulated Capital. A trailing limit follows the account up. Topstep's Maximum Loss Limit, $2,000 on a $50K account, rises with the end-of-day balance and never moves down, per Topstep's help center. It locks once it reaches the starting balance. How trailing drawdown moves shows why a trailing floor can end an account that is still in profit.
Profit target
A profit target is the gain you must reach to pass a phase, usually set as a percentage of the starting balance. FTMO's 2-Step Challenge asks for 10% of the Initial Simulated Capital in the first phase and 5% in Verification, per its Trading Objectives page. A phase is passed only when every objective is met. Reaching the target on day two still leaves FTMO's four-day minimum to finish.
Minimum trading days
A minimum trading days rule sets how many separate days you must trade before you can pass. FTMO requires at least 4 Trading Days in each phase of the 2-Step Challenge. It counts “any day – measured from 00:00:00 to 23:59:59 CE(S)T – during which at least one position is opened.” Topstep's Trading Combine Parameters article says “You can pass in as few as two days.” A minimum trading days rule does not end an attempt; it delays the pass. A strategy that trades once a week needs four weeks to trade on four separate days.
Consistency rule
A consistency rule caps how much of your profit may come from your single best day. Topstep's help center says a Trading Combine best day “must stay at or below 55% of your Profit Target,” and above that “your Profit Target increases.” On Topstep's Express Funded Account Consistency path, the figure must be 40% or below for payout eligibility. FTMO's 1-Step Challenge has a Best Day Rule: the best day may not exceed 50% of Positive Days' Profit, the sum of results on all profitable days. A consistency rule usually delays a pass or a payout rather than ending the account. The prop firm consistency rule works through the arithmetic.
Why do profitable strategies still fail prop firm challenges?
A profitable strategy fails a prop firm challenge when its losses arrive in the wrong order or the wrong size for the limits. A backtest's total profit sums up many months. A challenge is one path through those trades, and it ends the moment a limit is crossed. Three mechanisms explain how.
- A losing streak early. If several losing trades come before the winners, the account can reach its drawdown limit before the profit shows up. The same trades in a luckier order would have passed. This is sequence risk, and risk of ruin explains how to estimate the chance of it.
- One bad day. A daily loss limit looks at one day at a time. A strategy that loses little on average can still have one session that uses the whole daily allowance. At a firm that treats the limit as a violation, that one day fails the attempt, however good the month was.
- A trailing floor. A trailing limit rises with the account. Profit made early lifts the floor, so giving that profit back can end the attempt while the account is still near its starting balance.
| Day | Day's result | End-of-day balance | Trailing floor | Status |
|---|---|---|---|---|
| Start | – | $50,000 | $48,000 | Floor sits $2,000 below the starting balance |
| Day 1 | +$1,500 | $51,500 | $49,500 | New high; the floor rises $1,500 |
| Day 2 | −$600 | $50,900 | $49,500 | The floor does not move down |
| Day 3 | −$700 | $50,200 | $49,500 | Still in profit |
| Day 4 | −$700 | $49,500 | $49,500 | Floor reached: attempt over, only $500 below the start |
In this constructed example, the account was never down more than $500 from where it started, yet it failed. It gave back $2,000 from its $51,500 high. Topstep's Trading Combine rule is not to let the balance “hit or go below” the Maximum Loss Limit. Topstep also monitors the limit in real time, so a dip to the floor during a session would have ended the attempt even earlier.
Check this on your own results
Size positions so that your backtest's worst losing stretch fits inside the limit with room to spare. The limit is a fixed dollar amount, while every loss grows with position size. Position sizing for prop firm challenges turns a dollar limit into a trade size. Monte Carlo simulation for prop firm challenges shows how the same trades behave in other orders.
How long does a prop firm challenge take?
A prop firm challenge takes as long as the slowest of three things. The first is reaching the profit target. The second is trading the minimum number of days. The third, where a consistency rule applies, is earning enough total profit that your best day becomes a small enough share of it. There is no single answer, so estimate the time from your own backtest.
trading days needed ≈ the larger of the minimum trading days and (profit needed ÷ average profit per trading day)
The first line works for a cap measured against total profit. Topstep words its Trading Combine cap against the Profit Target and raises the target instead, so check its own worked examples. For the average profit per trading day, divide your backtest's net profit in dollars by the number of separate days it traded.
| Consistency rule | Best day | Profit needed | Trading days needed |
|---|---|---|---|
| None | $6,000 | $10,000 | 20 |
| Best day at most 50% of total profit | $6,000 | $12,000 ($6,000 ÷ 0.50) | 24 |
| Best day at most 30% of total profit | $6,000 | $20,000 ($6,000 ÷ 0.30) | 40 |
If the strategy trades every weekday, 20 trading days is about four weeks and 40 is about eight. In this constructed example the 4-day minimum never decides the answer, because the target takes far longer. The consistency rule does decide it: one big day can double the time a challenge takes.
Two cautions apply. An average hides losing days, and a slower pace keeps the account exposed to the loss limits for longer. A smaller position size protects against the limits but also stretches the time. Why a smaller position size makes an evaluation take longer explains that trade-off. If your program has a time limit, compare the estimate with it yourself.
Which backtest number predicts each prop firm rule?
Each prop firm rule has one backtest number that predicts it, and it is rarely the headline figure. Win rate, for example, says almost nothing about any of the five rules on its own. Which backtest statistic predicts which prop rule explains each pairing in more depth.
| Challenge rule | Backtest number to check | Where it shows in Tradelyze |
|---|---|---|
| Daily loss limit | Worst single-day loss, measured from the day's opening balance, in dollars | The max_daily_drawdown row of each firm's Rule Results table, when the rule set has a daily limit |
| Maximum drawdown (static or trailing) | Deepest intraday drawdown, measured from the start for a static limit and from the high for a trailing one; the Monte Carlo 95th-percentile drawdown | The Max Drawdown tile; the second number of MC Max DD Real→P95 on the robustness card; the max_total_drawdown row |
| Profit target | Net profit, and average profit per trading day for how long it takes | The Profit tile; the profit_target row |
| Minimum trading days | Separate days with at least one trade | The min_trading_days row |
| Consistency rule | Best day's profit divided by total profit, or by the profit target where the firm words it that way | The consistency row |
Tradelyze builds its figures from closed trades. A dip inside a trade that recovered before it closed never shows, so treat each drawdown figure as the least the real dip could have been. Why a backtest under-reports breach risk explains the gap.
What does Tradelyze check against a prop firm challenge, and what does it not check?
Tradelyze checks a TradingView strategy's backtest against the rules of each prop firm you select, from firm presets or your own custom rules. It does not place trades or take a challenge for you. Each firm gets a card with a Qualifies or Not Feasible badge and a Rule Results table. The table lists each rule with its Actual value, its Limit and a short message.
Tradelyze checks these rules. Maximum total drawdown is always checked; each of the others is checked only when the rule set defines it:
- Maximum daily drawdown (
max_daily_drawdown): the worst day's fall, as a share of the starting account size by default. - Maximum total drawdown (
max_total_drawdown): the deepest fall, using the rule set's drawdown type: Static, EOD Balance, Trailing Realtime or Trailing EOD. Trailing Realtime follows closed trades, not live equity. - Profit target (
profit_target): the backtest's net profit percentage against the target. - Minimum trading days (
min_trading_days): separate days on which a trade closed, counted in the strategy's exchange timezone. - Consistency (
consistency): the best day's profit divided by total profit. - Minimum trades (
min_trades): the total number of trades.
Not checked by Tradelyze
Time limits, news-trading rules and weekend-holding rules. The custom rule form has Time limit (days), News trading and Weekend holding allowed fields, but Tradelyze does not evaluate them.
A challenge-length stretch. Tradelyze checks the rules across the backtested trades as a whole, not over a few weeks starting on a date you pick. A backtest that made 10% over three years has not shown it can make 10% within a month.
Dips inside open trades. Every figure comes from closed trades. Tradelyze also counts a trading day on the date a trade closed. FTMO counts a day on which a position is opened, so the two day counts can differ.
Presets can be out of date
Presets record a firm's rules as understood when they were written, and Tradelyze does not check that they are current. As reviewed on 15 September 2026, Tradelyze's Topstep presets require 5 trading days and cap the best day at 50% of total profit. They also trail the drawdown from the highest closed-trade balance. Topstep's help center, retrieved the same day, says you can pass the Trading Combine in as few as two days. It words its cap as 55% of the Profit Target, and its Maximum Loss Limit trails the end-of-day balance. Verify every limit with the firm, and use a custom rule when a preset differs. Custom prop firm rules explains how to enter one.
Qualifies means the settings Tradelyze recommends for that firm passed every rule it checked; Not Feasible means at least one rule failed. If nothing failed but a rule could not be checked, the card shows no badge. Qualifies describes a backtest on your data. It is not a prediction that you will pass the challenge. What Qualifies and Not Feasible mean covers the card in more detail, and how credits are used covers what selecting a firm costs.
What should I read next to prepare for a prop firm challenge?
Read these pages in order. Together they turn a firm's rules into numbers you can check on your own backtest.
- Prop firm rules and backtest metrics: which backtest statistic predicts each rule.
- Daily loss limit: how the daily allowance is measured and reset.
- Trailing drawdown: how a trailing floor moves and when it stops.
- Prop firm consistency rule: how the best-day cap works.
- Position sizing for prop firm challenges: how many contracts or lots fit a limit.
- Risk of ruin: the chance a losing run hits the limit.
- Monte Carlo simulation for prop firm challenges: the same trades in other orders.
- Custom prop firm rules: entering your firm's exact terms.
- How Tradelyze validates a strategy: the whole run, from upload to firm cards.
- Learn FAQ: account, data and credit questions.
Learning path · Stage 4: Prop firm challenges and going live · Previous: Robustness score · Next: Prop firm rules and backtest metrics
Check it on your own strategy
In a Tradelyze report, each prop firm you select gets a Qualifies or Not Feasible badge and a Rule Results table. Tradelyze re-runs an uploaded TradingView Pine Script strategy from your exported trade list and price data. It then runs parameter optimization, walk-forward analysis, a five-check robustness score and prop firm rule checks. It does not place trades, give financial advice or guarantee a challenge pass, and it is in beta.
To judge the whole report, not one tile, use the pre-trade checklist. If a firm card reads Not Feasible, see what to do when a strategy fails validation.
Create an account. Already a user? Open your strategies.
Frequently asked questions about prop firm challenges
How do prop firm challenges work?
You pay for an evaluation account and trade it toward a profit target without breaking the firm's loss limits, usually a daily loss limit and a maximum drawdown. Some programs add minimum trading days or a consistency rule. Pass, sometimes in two phases, and you get a funded or payout-eligible account. Break a loss limit once and that attempt usually ends, even if the account was in profit before.
What is a funded account evaluation?
A funded account evaluation is another name for a prop firm challenge: a paid test of your trading on an account the firm usually simulates. Topstep's help center describes its Trading Combine as a simulated account with one rule and two objectives. Traders who meet the objectives without breaking the rules move on to an account where profits can lead to payouts.
What is the difference between the evaluation, verification and funded phases?
The evaluation is the first test: reach a profit target inside the loss limits. Verification is a second test in two-step programs; at FTMO its target is 5% of the Initial Simulated Capital, against 10% in the first phase, per FTMO's Trading Objectives page. The funded stage is the account you earn by passing, where profits can lead to payouts and other rules still apply.
How long does a prop firm challenge take?
It takes as long as the slowest of three things: reaching the profit target, trading the minimum number of days, and meeting any consistency rule. In a constructed example, a strategy averaging $500 a trading day needs 20 trading days for a $10,000 target. If its best day made $6,000 and the cap is 30% of total profit, it needs $20,000 and 40 trading days.
What are minimum trading days in a prop firm challenge?
Minimum trading days is the number of separate days you must trade before you can pass. FTMO requires at least 4 Trading Days in each phase of its 2-Step Challenge, counting any day on which at least one position is opened, per its Trading Objectives page. Topstep's help center says its Trading Combine can be passed in as few as two days.
Can I pass a prop firm challenge in one day?
Not at the two firms on this page. Topstep's Trading Combine Parameters article answers no, and says you can pass in as few as two days if your best day stays below 55% of your Profit Target. FTMO's 2-Step Challenge requires at least 4 Trading Days per phase, and its 1-Step Best Day Rule caps the best day at 50% of Positive Days' Profit, which one day alone cannot meet.
What happens if I break a rule during a prop firm challenge?
It depends on the rule. Crossing a loss limit usually ends the attempt: Topstep's help center says an account that reaches its Maximum Loss Limit, including unrealized losses, is liquidated immediately. Missing an objective usually only delays a pass. At Topstep, a Trading Combine best day above 55% of the Profit Target raises the Profit Target rather than failing the account.
Why did my profitable strategy fail a prop firm challenge?
Usually because of the order and size of its losses, not its average. A losing streak early can reach the drawdown limit before the profit arrives. One bad session can use a whole daily allowance. A trailing floor that rose with early profit can end an account still near its starting balance. Test smaller position sizes and other orders of the same trades before paying.
Can I backtest a prop firm challenge?
Yes, partly. A backtest can measure the numbers each rule depends on: the worst single-day loss, the deepest drawdown, total profit, trading days and the best day's share of profit. It cannot test every rule, such as news restrictions, and a figure built from closed trades misses dips inside open trades. Treat a backtest pass as a minimum requirement, not proof you will pass.
Which backtest number matters most for a prop firm challenge?
Check the two loss limits first, because they end an attempt. Compare your backtest's worst single-day loss with the daily allowance in dollars, and its deepest intraday drawdown with the maximum drawdown limit, measured from the high point if the limit trails. Then read the Monte Carlo 95th-percentile drawdown: the depth that 95% of reshuffled versions of your trades stayed within.
What does Tradelyze check for a prop firm challenge?
Tradelyze checks a strategy's backtest against each selected rule set: maximum daily drawdown, maximum total drawdown with its drawdown type, profit target, minimum trading days, consistency and minimum number of trades. Each firm card reads Qualifies or Not Feasible, with a Rule Results table. It does not check time limits, news-trading or weekend-holding rules, and it places no trades.
Are Tradelyze's prop firm presets up to date?
Not always. Presets record a firm's rules as understood when they were written. As reviewed on 15 September 2026, Tradelyze's Topstep presets cap the best day at 50% of total profit, while Topstep's help center says 55% of the Profit Target. Check every limit on the firm's own site, and enter a custom rule when the preset differs.
Does Qualifies in Tradelyze mean I will pass the real challenge?
No. Qualifies means the recommended settings passed every rule Tradelyze checked on your historical trades. The rules are checked across the whole backtest, not over a challenge-length stretch, using closed trades only, and time limits, news and weekend rules are not checked. Past trades will not repeat in the same order, so treat Qualifies as a reason to look further, not a forecast.
Sources
Rules change; verify with the firm
Prop firm rules change often and differ by account type and purchase date. Every firm-specific figure on this page was read on the firm's own site on 16 September 2026. Check the current terms for the exact account you intend to buy before paying for an evaluation.
- FTMO, Trading Objectives, ftmo.com/en/trading-objectives, page metadata last modified 13 May 2026, retrieved 16 September 2026 — on the 2-Step Challenge, a Profit Target of 10% of the Initial Simulated Capital in the FTMO Challenge phase and 5% in Verification, a Maximum Daily Loss of 5% and a static Maximum Loss of 10%; at least 4 Trading Days in both phases, a Trading Day being “any day – measured from 00:00:00 to 23:59:59 CE(S)T – during which at least one position is opened”; no Profit Target and no Minimum Trading Days rule on the subsequent FTMO Account. On the 1-Step Challenge, a Profit Target of 10%, a Maximum Daily Loss of 3%, an end-of-day trailing Maximum Loss of 10%, and a Best Day Rule that the Best Day “does not represent more than 50% of your Positive Days' Profit”. The page's “No time limit” line refers to FTMO's Free Trial, not to the Challenge.
- Topstep, Topstep Program Overview, help.topstep.com article 8284099, page metadata last modified 10 September 2026, retrieved 16 September 2026 — the Trading Combine “requires a monthly subscription”; the Express Funded Account, on a Standard or a Consistency path, is earned by passing the Trading Combine; the Live Funded Account is Topstep's capital, “Called up by the Risk Team after consistent XFA performance.” The overview summarizes the Trading Combine consistency target as a share of total profits, while the Consistency at Topstep article words it as a share of the Profit Target; this page follows the dedicated article.
- Topstep, Trading Combine Parameters, help.topstep.com article 8284197, page metadata last modified 10 September 2026, retrieved 16 September 2026 — “a simulated account with one rule and two objectives”; the rule not to let the account balance “hit or go below the Maximum Loss Limit”; and, answering whether the Trading Combine can be passed in one day, “You can pass in as few as two days, but keep your best day below 55% of your Profit Target.”
- Topstep, Consistency at Topstep, help.topstep.com article 8284208, page metadata last modified 14 September 2026, retrieved 16 September 2026 — “Your single best day of profit must stay at or below 55% of your Profit Target. If it exceeds that, your Profit Target increases.”; the Best Day Recommendations table giving Trading Combine Profit Targets of $3,000 on a 50K account, $6,000 on 100K and $9,000 on 150K. On the Express Funded Account Consistency path, the Consistency % must be 40% or below for payout eligibility.
- Topstep, What is the Maximum Loss Limit?, help.topstep.com article 8284204, retrieved 16 September 2026 — $2,000 on a 50K account, $3,000 on 100K and $4,500 on 150K; “It rises as your end-of-day balance grows, but never moves down. Once it reaches your starting balance, it locks permanently.” The limit updates at the end of each trading day, is monitored in real time, and counts realized and unrealized P&L; an account that reaches it is liquidated immediately.
- Tradelyze implementation, reviewed 15 September 2026 — the rule checks
max_daily_drawdown(only when a daily limit is defined),max_total_drawdown(always, with drawdown type Static, EOD Balance, Trailing Realtime or Trailing EOD, measured from closed trades),profit_target(the backtest's net profit percentage),min_trading_days(separate exit dates in the exchange timezone),consistency(best day's profit divided by total profit) andmin_trades; rules checked across the scored backtest, with no challenge-length window; the custom rule form's Time limit (days), News trading and Weekend holding allowed fields, which are not evaluated; the Topstep presets' 5 trading day minimum, 50% consistency limit on total profit and trailing drawdown measured from the highest closed-trade balance; and the firm card's Qualifies and Not Feasible badges, with no badge when nothing failed but a rule could not be checked, and a Rule Results table of Status, Rule, Actual, Limit and Message. - Constructed illustrations — the $50,000 trailing-limit account and the $100,000 challenge duration table on this page are constructed illustrations, not measured data. The weeks quoted for 20 and 40 trading days are calendar arithmetic, not a firm statement.