What is a Prop firm Challenge?
Prop firm challenges are structured performance evaluations where traders pay a one-time fee to demonstrate they can generate consistent profits while managing risk. It is a structured evaluation where a trader needs to demonstrate skill and risk management before receiving access to the firm’s capital. The profit targets and risks differ between Prop Firms. After successfully passing the challenge, the trader is granted access to the firm's capital to manage under a defined risk parameter. Any profit generated on the funded account is distributed between the Trader and the Prop Firm. In most cases, the profit-sharing ratio is set at 80:20 in favor of the Trader.
Most prop firm's programs require traders to go through a 2-phase challenge phase before actually getting funded which in most cases are; Phase 1(the challenge stage) and Phase 2(the verification stage). In order to pass these 2 phases, you must follow these criteria:
Common Prop Firm Rules
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Profit Targets: It greatly differs between different Prop Firms, and for a 2-stage challenge, it ranges between 8% to 10% for Phase 1 and 3% to 5% for Phase 2. For a single stage Challenge, the profit target is mostly 10% before becoming a Funded Trader.
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Maximum Daily Drawdown: It is usually fixed at 5% for a double stage challenge and 3% for a single stage challenge. On instant Funded Program, drawdown is trailing in most cases.
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Maximum Total Drawdown: It is usually set fixed at 10% for most Prop Firms. For Instant funded account, drawdown type is always trailing and moves as account balance or equity increases.
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Consistency Rules: Most Prop Firms institute a consistency rule on their Instant Funded account to differentiate gamblers or high-risk takers to actual profitable Traders. To be able to withdraw profit, you must be a consistently profitable Trader. You should not make more than 15%, 20% 25% or 50% depending on the Prop Firm of your total profit in one day.
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Challenge Trading Period: In most instances, the trading period is unlimited and holding positions over the weekend is either allowed or disallowed.
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Strategy Restrictions: Many prop firms (particularly on Forex and Crypto accounts) prohibit trading during high-impact news events (like CPI or NFP) and often require all positions to be closed over the weekend.
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Account Scaling: Most Prop Firms offers to increase Traders Capital if they show some certain level of trading consistency and fulfill some certain conditions. Some Firms like the 5er% offer account scaling up to a maximum capital of $4million.
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Trading Platforms: Common Trading platforms are MT4, MT5, cTrader, and Match-Trader.
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Allowed Instruments: Forex, indices, commodities, crypto
Reasons you should hire us to pass your Prop Firm challenge
We Our Prop Firm Challenge Passing services are considered the best because of the following reasons:
- We risk only 0.5% to 1% per trade.
- We use Stop-loss on very single trade which matches the risk.
- We do not do revenge trading
- We do not over-leverage your account
- we have a good Understanding market sessions (London, NY, Asian, and Overlapping)
- We Respect the consistency requirements set by the Prop Firm
- We try by all possible means to avoid the daily and total loss limits
Contact us for more information.
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