# How prop firm challenges work > A prop firm challenge, or evaluation, is a paid trading test. You trade a simulated account to reach a profit target, typically 5% to 10% of the balance, without breaching a daily loss limit or a maximum drawdown. Pass every phase and you are offered a funded account; breach a limit and the attempt ends. **Source:** https://propfirmpal.com/learn/how-prop-firm-challenges-work **Generated:** 2026-09-25 **Publisher:** Prop Firm Pal — independent prop firm comparison _Prop Firm Pal earns affiliate commission from some listed firms. This is disclosed on-site and does not affect the computed ranking order._ --- _Updated 2026-09-24._ ## The parts of every challenge Every evaluation is built from the same few rules, and the numbers are what differ. - **Profit target.** The gain you must reach. The median phase-one target across the 23 firms with full terms in our [industry report](https://propfirmpal.com/industry-report) is 5%. - **Daily loss limit.** The most you may lose in a day — 3% is the median in the same data. Some firms have none. - **Maximum drawdown.** The floor the account may never touch — 5% is the median. It may be static or trailing, which changes everything; see [drawdown types](https://propfirmpal.com/learn/prop-firm-drawdown-types). - **Minimum trading days.** Some firms require you to trade on a set number of days before you can pass. See [minimum trading days](https://propfirmpal.com/glossary/minimum-trading-days). - **Time limit.** Many evaluations now have none; where one exists it is set per phase, so check it before you plan your pace. See [time limit](https://propfirmpal.com/glossary/time-limit). - **Conduct rules.** News trading, weekend holding, EAs and copy trading, and sometimes a [consistency rule](https://propfirmpal.com/glossary/consistency-rule). ## One-step, two-step and three-step A [two-step challenge](https://propfirmpal.com/glossary/two-step-challenge) has a challenge phase with a higher target and a verification phase with a lower one, both under the same loss limits. A [one-step challenge](https://propfirmpal.com/glossary/one-step-challenge) has a single phase, usually with a higher target or tighter drawdown to compensate. A [three-step challenge](https://propfirmpal.com/glossary/three-step-challenge) spreads a lower target over three phases and tends to be cheaper. Fewer phases is not the same as easier. What decides difficulty is the ratio between target and drawdown: a 10% target with a 6% trailing drawdown is harder than 8% then 5% with a 10% static one. Our [challenge difficulty ranking](https://propfirmpal.com/challenge-difficulty) scores every evaluation on exactly that. Browse by type: [one-step](https://propfirmpal.com/funding-types/one-step), [two-step](https://propfirmpal.com/funding-types/two-step). ## Futures evaluations are built differently Futures prop firms usually run a single-phase evaluation with a dollar profit target and a trailing drawdown in dollars — for example, a $3,000 target and a $2,000 end-of-day trailing limit on a $50,000 account — and often charge monthly until you pass. They also tend to cap contracts and require positions to be flat before the daily close. [Futures vs forex prop firms](https://propfirmpal.com/learn/futures-vs-forex-prop-firms) sets the two models side by side. ## What a challenge costs Fees scale with account size. The cheapest $100,000 evaluation at the median firm in our data costs $419, and the range runs from $149 to $1,105. Some firms refund the fee with your first payout ([refundable fee](https://propfirmpal.com/glossary/refundable-fee)); many sell discounted resets. Active codes are on the [offers page](https://propfirmpal.com/offers), and every evaluation with its price is on the [challenges table](https://propfirmpal.com/challenges). ## What happens if you fail Breaching a hard limit ends the attempt immediately — the account is closed, and the fee is gone. Missing a soft rule, such as a consistency limit, may instead mean you must keep trading before you can pass. See [hard breach](https://propfirmpal.com/glossary/hard-breach) and [soft breach](https://propfirmpal.com/glossary/soft-breach). To try again you buy a new evaluation or a [reset](https://propfirmpal.com/glossary/reset), often at a discount. A few firms give a free retry if you finish the time limit in profit without reaching the target. ## How long a challenge takes There is no standard answer, and speed is not the goal. At a sensible 0.5% to 1% risk per trade, an 8% target can take weeks. The [challenge pass rate calculator](https://propfirmpal.com/calculators/challenge-success) estimates how many trading days your win rate and risk imply, and the longest losing streak your limits survive. ## Frequently asked questions ### How hard is a prop firm challenge? Hard enough that firms profit from failed attempts. Difficulty depends on the ratio of profit target to drawdown and on whether the drawdown trails. The challenge difficulty page ranks every evaluation we track. ### What happens if you fail a prop firm challenge? The account closes and the fee is not returned. You can buy a new attempt or a discounted reset; some firms offer a free retry if you end the period in profit. ### Is a one-step challenge easier than a two-step? Not necessarily. One-step evaluations usually have a higher target or tighter drawdown. Compare the target-to-drawdown ratio, not the number of phases. ### How long should it take to pass a prop firm challenge? As long as your normal risk takes to reach the target. Rushing to pass quickly is the most common way to breach the daily limit. ### Are prop firm challenges worth it? For a trader with a tested edge and controlled risk, a fee-capped route to a large account can be worth it. For a trader still learning, repeated fees usually cost more than the payouts return. ### What is the verification phase? The second phase of a two-step challenge. It usually has a lower profit target than the first phase and the same loss limits, and passing it leads to the funded account. ### Can you use an EA or trade news in a challenge? It depends on the firm. Many allow expert advisors with restrictions and limit trading around high-impact news; the rules apply in the evaluation and the funded account alike. ## Related pages - [Challenge difficulty ranking](https://propfirmpal.com/challenge-difficulty) - [Why traders fail prop firm challenges](https://propfirmpal.com/learn/why-traders-fail-prop-firm-challenges) - [Prop firm drawdown types](https://propfirmpal.com/learn/prop-firm-drawdown-types) - [Challenge pass rate calculator](https://propfirmpal.com/calculators/challenge-success) - [Evaluation in the glossary](https://propfirmpal.com/glossary/evaluation) - [Every evaluation, compared](https://propfirmpal.com/challenges) - [What is a prop firm?](https://propfirmpal.com/learn/what-is-a-prop-firm) — markdown: https://propfirmpal.com/learn/what-is-a-prop-firm.md - [How funded trading accounts work](https://propfirmpal.com/learn/funded-trading-accounts) — markdown: https://propfirmpal.com/learn/funded-trading-accounts.md - [How to get a funded trading account](https://propfirmpal.com/learn/how-to-get-a-funded-trading-account) — markdown: https://propfirmpal.com/learn/how-to-get-a-funded-trading-account.md - [Instant funding vs evaluation](https://propfirmpal.com/learn/instant-funding-vs-evaluation) — markdown: https://propfirmpal.com/learn/instant-funding-vs-evaluation.md - [Why traders fail prop firm challenges](https://propfirmpal.com/learn/why-traders-fail-prop-firm-challenges) — markdown: https://propfirmpal.com/learn/why-traders-fail-prop-firm-challenges.md - [Prop firm drawdown types explained](https://propfirmpal.com/learn/prop-firm-drawdown-types) — markdown: https://propfirmpal.com/learn/prop-firm-drawdown-types.md - [How to scale a funded account](https://propfirmpal.com/learn/how-to-scale-a-funded-account) — markdown: https://propfirmpal.com/learn/how-to-scale-a-funded-account.md - [Futures vs forex prop firms](https://propfirmpal.com/learn/futures-vs-forex-prop-firms) — markdown: https://propfirmpal.com/learn/futures-vs-forex-prop-firms.md - [How to choose a prop firm](https://propfirmpal.com/learn/how-to-choose-a-prop-firm) — markdown: https://propfirmpal.com/learn/how-to-choose-a-prop-firm.md - [Prop firm vs broker vs hedge fund](https://propfirmpal.com/learn/prop-firm-vs-broker-vs-hedge-fund) — markdown: https://propfirmpal.com/learn/prop-firm-vs-broker-vs-hedge-fund.md - [How do prop firms make money?](https://propfirmpal.com/learn/how-do-prop-firms-make-money) — markdown: https://propfirmpal.com/learn/how-do-prop-firms-make-money.md - [How prop firm payouts work](https://propfirmpal.com/learn/how-prop-firm-payouts-work) — markdown: https://propfirmpal.com/learn/how-prop-firm-payouts-work.md - [Can you make money with a prop firm?](https://propfirmpal.com/learn/can-you-make-money-with-a-prop-firm) — markdown: https://propfirmpal.com/learn/can-you-make-money-with-a-prop-firm.md - [Prop firm taxes](https://propfirmpal.com/learn/prop-firm-taxes) — markdown: https://propfirmpal.com/learn/prop-firm-taxes.md - [Are prop firms legit?](https://propfirmpal.com/learn/are-prop-firms-legit) — markdown: https://propfirmpal.com/learn/are-prop-firms-legit.md - [Are prop firms regulated?](https://propfirmpal.com/learn/are-prop-firms-regulated) — markdown: https://propfirmpal.com/learn/are-prop-firms-regulated.md - [Are prop firms going away?](https://propfirmpal.com/learn/are-prop-firms-going-away) — markdown: https://propfirmpal.com/learn/are-prop-firms-going-away.md