Prop Firm Challenge
Prop Firm Challenge — The evaluation phase where a trader must hit a profit target while respecting drawdown limits to qualify for funded capital.
- Quick definition: The evaluation phase where a trader must hit a profit target while respecting drawdown limits to qualify for funded capital.
- Category: Prop Firm Basics
Full Definition
A prop firm challenge typically requires reaching a 8-10% profit target within 30-60 days, while staying inside a 5% daily drawdown and 10% maximum drawdown. Most challenges have additional rules: minimum trading days, no weekend holds, no news trading, etc. Passing converts the trader to a funded account where they keep a profit split on real (or simulated) capital.
Related Terms
Maximum Drawdown · Daily Drawdown · Profit Target · Consistency Rule
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