How prop firm challenges work (2-step explained)

A prop firm lets you trade its money after you prove you can trade within its rules. In a typical 2-step challenge you first make 10% (Phase 1) and then 5% (Phase 2) on a demo-style account, without breaking the loss limits. Then you receive a funded account and share the profits.

The loss limits decide everything. A daily loss limit (often 5%) and a max loss limit (often 10%). Some firms keep the max loss fixed at the starting balance, others trail it behind your highest balance. Break either limit and the challenge is over.

Other rules to read: minimum trading days, time limits (many have none), whether news trading, expert advisors (EAs) and weekend holding are allowed, and what counts as a profitable day.

Honest advice: pass rates are low because people risk too much. Use a small risk per trade, count your limits tighter than the real ones, and treat the fee as a cost, not an investment.

Try the challenge calculator and simulator and compare firm rules side by side.

Education only. This is not financial advice. Trading gold with leverage involves a high risk of losing money.

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