How Futures Prop Firm Challenges Work

You pick an account size, which sets the profit target, drawdown and sometimes a daily loss limit. Prices vary widely, and promotions are common, so compare plans before buying.

You trade the simulated account until your profit reaches the target. Along the way you must stay above the drawdown floor, respect any daily loss limit, and meet any minimum trading days or consistency rule.

• Break the drawdown and the account is closed
• Hit a daily loss limit and trading stops for the day or the account is closed, depending on the firm
• A consistency rule can stop a single large day from passing the test

After passing, many firms ask for an activation fee before issuing a funded account. Rules often change at this stage: the drawdown, consistency and payout conditions of a funded account can differ from the evaluation.

Funded accounts have their own payout rules, such as minimum trading days, a profit buffer, a minimum payout and a payout cycle. When you meet them you request a payout and the firm pays your share of the profit.

Traders most often lose accounts to the drawdown, to oversizing after a loss, and to misreading a rule such as an intraday trailing drawdown. Learn the rules before the first trade.