Core Rules Every Challenge Has
Most prop firm challenges require hitting a set profit target (commonly 8-10% in Phase 1, 5% in Phase 2) within a time limit. This proves you can generate returns, but rushing to hit the target quickly often leads to oversized risk — pacing matters more than speed.
A hard ceiling on total account loss from the starting balance (or high-water mark), typically 10-12%. Breaching this — even briefly, even intraday on some firms — fails the account instantly, regardless of how the trade later plays out.
A separate, tighter cap (commonly 4-5%) on how much you can lose in a single trading day. This exists specifically to stop revenge trading and prevent one bad day from threatening the whole account — it resets every day regardless of prior performance.
Many firms require a minimum number of active trading days (often 3-5) before you can pass a phase, even if you hit the profit target early. This prevents one lucky trade from passing an evaluation and ensures some consistency is demonstrated.
Some firms require that no single trading day accounts for more than a set percentage (often 20-30%) of your total profit. This is designed to filter out traders who pass on one lucky oversized trade rather than a repeatable process.
Rules vary widely — some firms prohibit holding positions overnight or over the weekend entirely, others allow it with reduced position sizing. Always confirm this before holding through low-liquidity periods where gaps can trigger drawdown limits instantly.
Common Reasons Traders Fail
How to Actually Pass
Why Rules Vary by Firm
Every prop firm sets its own combination of these rules, and the exact percentages, time limits, and permitted strategies differ significantly between firms — always read the specific rulebook for the challenge you're taking rather than assuming industry-standard numbers apply. A rule that's lenient at one firm (like overnight holding) may be an instant disqualifier at another.