Challenge Strategy
How to Prepare for a Prop Firm Challenge
A practical preparation sequence for prop firm evaluations: programme rules, drawdown room, realistic simulation, execution checks and stopping criteria.
Source updated
- Originally published
- Source updated
In this article
Passing a prop firm evaluation requires meeting the purchased programme's objectives without breaching its rules. No checklist guarantees a pass, a reward or a live trading allocation. A strategy can be disciplined and still lose money; a short profitable simulation can also overstate its reliability.
The following preparation sequence is intended to reveal problems before another evaluation payment. It is not based on a claimed survey of successful funded traders.
1. Identify the exact product
Record the legal firm, programme, purchase version, account size and stage. A company's forex/CFD and futures products can have different rules. Even within CFDs, FTMO's comparison table separates its 1-Step and 2-Step objectives. Do not copy a rule from another account with the same headline balance.
2. Translate the loss rules into a ledger
List the daily loss reference, total loss floor, reset timezone, whether unrealised profit/loss and fees count, and whether the floor moves intraday or at the end of a trading day. Identify any level where trailing stops.
Keep both the current floor and distance to it visible. Subtracting the allowed drawdown from today's balance is wrong if the rule trails an earlier high-water mark. Our drawdown guide walks through the distinction.
3. Size from the remaining room
A nominal account balance is not an amount you can afford to lose. In a hypothetical account with $1,200 remaining to its binding floor, a planned $200 loss uses one-sixth of that room before commissions or slippage. Five such losses would leave only $200.
Choose a personal stop and position size using the strategy's tested loss distribution and the account's actual constraints. There is no universal 0.5–1% rule that makes every programme safe. Stops also cannot guarantee their execution price.
4. Test execution and restrictions
Verify platform order behaviour, cancellation, disconnect handling and emergency contact routes. Check the exact news-event, instrument, overnight, copying and automation policies. FTMO's news policy distinguishes evaluation and subsequent account conditions; a blanket industry-wide two-minute ban is inaccurate.
5. Rehearse the whole path
Replay or paper trade using realistic fees, the programme's floor calculations and its actual trading hours. Include losing periods, not just a favourable run. Keep track of subscription or expiry conditions separately from profit targets. Some evaluations have no fixed completion deadline, while recurring billing can still continue.
A successful rehearsal is useful evidence of compatibility, not proof of a profitable edge or future payment. Decide in advance how much money and time you can spend on attempts.
6. Define reasons to stop
Write down your personal daily stop, what to do after execution failures, and when to suspend the strategy for investigation. Do not increase size simply because a target or billing date approaches. Check for open orders and positions before logging out; closing the platform does not necessarily close exposure.
7. Review process and outcomes separately
For each trade, record whether the setup and risk limits were followed, the actual fill, costs and effect on drawdown. A compliant loss is different from a rule breach. A profitable rule breach still needs investigation.
Use the evaluation mistakes guide for failure examples and the trading plan template to turn those observations into instructions.
Frequently asked questions
How long does passing take?
There is no supported industry average here. Duration depends on the programme, market opportunities and results; some attempts never pass. Read minimum-day, inactivity, expiry and subscription terms separately.
Should I avoid the market open?
That depends on the strategy and instrument. The open can change volatility and execution conditions, but waiting thirty minutes does not establish a higher-probability trade. Test the session you intend to trade.
Does passing mean the next account is live?
No. The next stage may remain simulated with contractual rewards. Check the agreement and eligibility conditions before treating the advertised balance as live capital.
Risk Disclaimer: Trading involves substantial risk of loss. Past performance is not indicative of future results. See our full risk disclaimer.