Evaluation Challenge

An evaluation challenge (often just "the challenge") is the qualification process that stands between you and a funded prop account. You pay a one-time fee, receive a simulated account of a chosen size, and trade it under a fixed set of rules: a profit target to reach, a daily loss limit, and a maximum overall drawdown you must never touch. There is often a minimum number of trading days and sometimes a maximum time window. Reaching the target without breaking any rule advances you — either straight to funding or to a second verification phase. The fee is the firm’s revenue and your cost of attempting; many firms refund it with your first payout, which is worth confirming before you start.

In plain English — An evaluation challenge is the test a prop firm uses to decide whether to fund you. You trade a simulated account and must reach a profit target without breaching the daily loss limit or the overall (max) drawdown. Passing earns access to a funded account; failing usually means buying a new attempt. Some firms run a single phase, others two or more.

On a $100,000 single-phase challenge you might need +8% (a $8,000 profit) while never losing more than 5% in a day ($5,000) or 10% overall ($10,000).