How a prop firm challenge actually works

A prop firm challenge is an assessment. You pay a one-off fee, you trade a simulated account under a published rule set, and if you hit the profit target without breaking a risk rule you are moved onto a funded simulated account that pays a share of the profit you generate. Nothing you trade is client money, and no regulated investment service is provided.

The phases

One-step programs test you once. Two-step programs test you twice, with a lower target in the second phase, which rewards consistency over a single lucky week. Both use the same daily loss limit and maximum drawdown, so the risk discipline never changes — only the target does.

The four numbers that decide everything

• Profit target — the gain you must reach, expressed as a percentage of the starting balance.
• Daily loss limit — the most your equity may fall inside one trading day, measured against the day's opening balance and including floating losses.
• Maximum drawdown — the hard floor for the account. Static drawdown is fixed to the starting balance; trailing drawdown follows your highest equity upward.
• Minimum trading days — the number of separate days you must trade so the result reflects a process rather than one position.

Static versus trailing drawdown

Static drawdown is easier to hold onto once you are in profit: the floor never moves, so profit becomes genuine buffer. Trailing drawdown ratchets up behind your equity high, which means a large unrealised gain permanently raises the level at which you fail. If you scalp into big intraday spikes, trailing will punish you far harder than static.

Why floating P&L matters

Most breaches are not caused by closed losses. They are caused by an open position that dipped past the limit before it recovered. Our engine marks every open position to live prices, so the drawdown you see is the drawdown that counts — hoping a trade back is not a strategy the rules recognise.

Read the full rule set, including hold times and news windows, on the Rules page before your first trade.

After you pass

Passing converts your evaluation into a funded simulated account with the same risk limits and a profit split. Rewards are requested from the payouts page, reviewed against the published rewards policy, and paid from company funds after identity verification.

All trading on Next Scale Funded is simulated. Nothing on this page is investment advice.