Evaluation (Challenge)

An evaluation (commonly called a challenge) is the proving stage that prop firms use to screen traders before giving them capital. You pay a fee, trade a simulated account, and must reach a defined profit target while staying inside the daily drawdown and maximum drawdown limits. Pass, and you advance to a funded account; breach a rule, and you fail.

Evaluations come in different shapes. A one-step evaluation has a single target, while a two-step evaluation splits the test into two phases with separate targets. For example, a $50,000 one-step challenge might require a $3,000 profit target with a $2,000 trailing drawdown and a minimum number of trading days.

The evaluation fee is the firm's primary revenue source, and many traders take multiple attempts. Watch for hidden conditions such as a consistency rule, minimum trading days, or an activation fee charged only after you pass — these turn a "cheap" challenge into a more expensive path to funding.