Prop firm challenges: rules and strategy

Prop firms give traders capital to manage — from $10,000 to $200,000 and more — and keep part of the profit. To get an account, you pass an evaluation (a challenge).

Typical rules

• daily drawdown — usually no more than 5%;
• total drawdown — usually no more than 10%;
• profit target — about 8–10% in phase one and 5% in phase two.

How to pass

• Lower risk: 0.25–0.5% per trade instead of 1%. That leaves room for a long losing streak without breaking the rules.
• Good ratio: look for trades where the target is at least 3 times the risk.
• No rush: stability matters more than speed. Prop firm rules exist to filter out gamblers.

Every firm has its own exact rules — always read them before buying a challenge.