Four numbers decide almost every prop firm challenge. A second layer of rules decides the rest — usually for people who have already hit the target.
Before we go through them, the one fact that reframes all of them: a challenge fee is not tuition. Tuition implies somebody intends for you to graduate. The fee is revenue the day you hand it over, the outcome is your problem, and every rule below was written by the party that gets paid either way.
That isn't a conspiracy and it isn't a reason to avoid prop firms — plenty of people trade funded accounts perfectly happily. It's just the first honest thing you can know about the deal, and the rules stop looking arbitrary the moment you read them in that light.
The four numbers
Firms dress these up differently, but almost every evaluation is the same four constraints wearing a new logo.
The profit target — usually around 8–10%. What you must make to pass. It's the only number anyone advertises, and it's the only one that isn't trying to end you.
The daily loss limit — usually around 5%. The most you can lose between one daily reset and the next. This resets every session, which sounds generous and isn't, for reasons we'll spend a whole lesson on.
The maximum drawdown — usually around 10%. The most you can lose across the entire run. It does not reset. Depending on the firm it's either fixed under your starting balance or it trails underneath your highest equity, which is a meaningfully nastier animal.
A minimum number of trading days. Stops you passing with one lucky swing. It also quietly guarantees you'll be exposed to the market for longer than your best idea lasts.
Look at what that picture is telling you. The climb you need and the drop that kills you are the same size. They've asked you to walk a tightrope exactly as long as the fall.
That symmetry is not lazy rule-writing. It's the entire diagnostic. If you can make 10% without ever being 10% down, your position sizes are small enough that no single stretch of bad luck can move the account decisively — which is another way of saying you're the kind of trader who can be handed real money. Anyone whose returns come from size big enough to hit the target quickly is, by construction, also big enough to hit the floor quickly. The rules are designed so that those two facts can't be separated.
The rules nobody reads until they've broken one
Underneath the four numbers sits a second layer, and this is where people who hit the target still lose the account.
- Consistency rules. Caps on how much of your total profit can come from a single day or a single trade. Make 9% of your 10% on one gorgeous Tuesday and some firms will void the pass, on the entirely reasonable grounds that they can't tell skill from a jackpot.
- News restrictions. Windows around high-impact releases where you can't open, close, or hold. Varies wildly by firm and is very easy to breach by accident.
- Method rules. Limits on copy trading, on following third-party signals, on certain automation. Lesson five is entirely about this layer, because it's the one that surprises people hardest.
- Weekend and overnight holding. Some firms forbid it outright. Others only forbid it on certain account types, which is worse, because you'll assume you know.
None of these are exotic. All of them are checked after you hit the target, against your full trade history, by someone whose job is to check.
What the test is actually for
Here's the reframe worth carrying through the rest of this course.
The firm is not shopping for the best analyst. It has no way to measure that in thirty days and no particular need for it. It's shopping for someone who will not blow up a funded account, because a funded account that blows up costs the firm real money while a failed challenge costs them nothing.
So every rule is a probe for the same trait: will this person stop? Will they stop when the day has gone badly. Will they stop sizing up when they're behind and the clock is running. Will they stop trading entirely on a day with nothing worth trading.
That's why the whole thing feels so strangely unrelated to whether you can read a chart. It is unrelated. You're not being tested on talent — you're being tested on restraint, using an instrument that's been carefully built so that talent alone can't get you through.
We tested that claim on ourselves in the least flattering way available: we built something with flawless discipline and no restraint whatsoever, turned it loose on our own signals, and watched what it did to the account. That's lesson four, and it's the most expensive paragraph in this course.
Next: the drawdown math — the three different floors, which one trails you, and why the arithmetic is less forgiving than it looks.