How to pass a prop firm challenge: a rules-first plan
Most people who buy a prop firm challenge don't pass it. In March 2025 the CEO of The Funded Trader said only 5 to 10% of their clients passed. The usual reason isn't a bad strategy. It's a rule: one red day that went too deep, a trade left open into the news, equity that slipped under the maximum loss line. This plan is built around the rules.
1. Write down the four numbers before your first trade
Every challenge comes down to four numbers. Here they are for FTMO's 2-Step Challenge on a $100,000 account, as FTMO publishes them on its Trading Objectives page (checked October 2026):
| Rule | FTMO 2-Step, $100,000 | In practice |
|---|---|---|
| Profit target | 10%, then 5% in the verification | Reach a $110,000 balance, then $105,000 |
| Maximum daily loss | 5% ($5,000) | Equity can't fall more than $5,000 below the balance at midnight CE(S)T |
| Maximum loss | 10% ($10,000), static | Equity must stay above $90,000 |
| Minimum trading days | 4 in each phase | Days on which you open at least one trade |
Other firms use different numbers and, more importantly, different ways of measuring them: a daily limit on balance or on equity, a static or a trailing maximum loss, a day that resets at midnight in Europe or at the New York close. Find these on the firm's own rules page before you pay, not on a review site.
2. Size your risk from the daily limit, not from the account
A $100,000 account sounds big, but with a 5% daily limit you have $5,000 to lose on any one day. Size every trade from that number.
Risking 1% ($1,000) per trade, you can take four full losses in a day and still have $1,000 of room. Risking 2% ($2,000), two losses and one open trade in the red can end the challenge before lunch.
Open trades count too. FTMO checks the daily limit against equity, which includes the profit or loss of open positions, swaps and commissions. Two open trades that are each $2,000 in the red, plus a $1,500 loss you already closed, add up to $5,500: a breach, even though you only closed one losing trade.
A simple habit: before you open a trade, add up the distance to the stop on every open position plus today's closed losses. If the total would go past the daily limit, don't open it.
3. Turn the profit target into a trade budget
A 10% target feels far away, so traders push their size. Do the arithmetic instead.
Risk 1% per trade, aim for twice that on winners and win half of your trades: on average each trade earns 0.5% (0.5 × 2% − 0.5 × 1%). Reaching 10% takes about 20 trades. At 0.5% risk it takes about 40.
These are averages, not promises; losing streaks happen. But a budget tells you roughly how many trades you need, which is the best cure for doubling up after a loss. FTMO's 2-Step has no time limit, so there's no reason to rush. Other firms do set one, so check.
4. Set a personal stop well before the firm's
A common habit among funded traders is to stop for the day at about half of the firm's daily limit: on a 5% limit, that's −2.5%. It stops one bad day from becoming the last one, and it leaves room for slippage on trades that are still open.
Do the same for the maximum loss. Decide in advance what you'll do if you get halfway to the floor, for example halving your risk until you're back near the start.
5. Read the rules people forget
- Consistency. For FTMO challenges ordered from 12 October 2026, your best day can't be more than 50% of your total profit. Going over isn't a breach, but you have to keep trading until it's back under 50%.
- News. Some firms don't let you open or close trades in a window around high-impact news, or allow it only during the evaluation.
- Weekends and overnight. Some accounts can't hold trades over the weekend.
- Trailing maximum loss. On FTMO's 1-Step, the 10% maximum loss follows your highest end-of-day balance. See trailing vs static drawdown.
- Reset time. A daily limit that resets at midnight in Prague isn't the same as one that resets in the New York evening. Know when your day starts. More in daily drawdown explained.
6. Rehearse the exact rules before you pay
A $100,000 challenge usually costs several hundred euros or dollars, and failing it is an expensive way to learn the rules. You can rehearse them first. In the PrepFunded simulator you set the same target, daily loss (on balance or on equity), maximum loss (static or trailing) and time limit, then trade markets built on real price history, candle by candle, until passing feels routine.
Rehearse these rules for free
Set your firm's exact target, daily loss and maximum loss in the PrepFunded simulator and trade markets built on real price history, candle by candle. Fail here for free, not on a paid challenge.
Sources
- FTMO, Trading Objectives
- Finance Magnates, "Only 1 in 20 traders pass prop firm challenges, reports The Funded Trader" (March 2025)
Rules checked on 30 October 2026. Firms change their rules, so confirm them on the firm's own site before you buy a challenge.
PrepFunded is a challenge simulator. It isn't a prop firm, it doesn't offer funded accounts and nothing here is investment advice.