How prop firm challenges work, explained simply
Almost every challenge comes down to three rules: hit a profit target, respect a daily loss limit and respect an overall loss limit. Let's go through each.
The three rules
Profit target: how much you need to make to pass a phase, for example 8% or 10%.Daily loss limit: the most you can lose in a single day, for example 4% or 5%.Overall loss limit: how far your account can drop in total, for example 8% or 10%. Touch either limit and the challenge ends.Phases
A challenge can have one, two or three phases. On a 2-Step, phase one usually asks for 8–10% and phase two for 5%. Finish the last phase and the funded account is yours.
Some firms also sell instant accounts with no challenge at all; check our instant funding list.
Minimum days and time limits
Some firms ask you to trade a minimum number of days, like 3 or 4. Time limits have mostly disappeared, but keep an eye out for accounts closed after 30 days without a trade.
After you pass
The firm reviews your trades and asks you to verify your identity (KYC), usually with a passport, driver's licence or other government ID plus proof of address. Then you get your funded account with the same loss rules and no target, and every profit gets split at the agreed rate.
Questions traders ask us
How long does a challenge take?
That's up to you. With no time limit, most traders take somewhere between two weeks and two months.
What if I don't pass?
You lose the fee. Some firms offer a discount or a free retry, though.