Which Prop Firm Has the Easiest Challenge? A Breakdown of Evaluation Rules

If you’re looking to get funded by a prop firm then you’re probably wondering which one has the easiest challenge. No one wants to go through a strict evaluation process as it makes it difficult for traders to pass this challenge. The good thing here is that not all prop firm challenges are created equal. Some have more forgiving rules with lower profit targets and fewer restrictions that make them a better choice for traders who want an easier path to funding. So let’s discuss some evaluation rules of some of the most popular prop firms and see which one gives traders the best shot at passing.

What Is a Prop Firm Evaluation Challenge?

A prop firm evaluation challenge is a test that traders must pass to qualify for funding. This 2-step challenge process consists of achieving specific performance targets within a given period while following risk management rules such as drawdown limits. The goal is to check the trader’s ability to follow a strategy and manage risk and consistency before granting access to larger capital.

Most challenges are divided into multiple phases such as an initial evaluation phase and a verification phase. Each phase has different profit targets and risk parameters. Traders must pass these stages with discipline and avoid excessive risk-taking. Once traders pass this evaluation they get funded with a trading account where they can start live trading. 

What Makes a Prop Firm Challenge Easy?

Now let’s talk about what actually makes a challenge easier or harder. It is based on some factors including: 

Profit Target

The lower the profit target the easier it is to pass. Some firms require traders to achieve a 10% profit target in phase 1 while others set the bar as low as 5%. A lower profit target means traders don’t have to push as aggressively and reduce the risk of overtrading or making emotional decisions.

Drawdown Rules

Drawdown rules determine how much risk a trader can take before failing the challenge. Firms with a higher max drawdown give traders more leniency. Some firms provide up to 12% overall drawdown while others cap it at 5%. The more room traders have for temporary losses the better they can recover from market fluctuations and execute trades without excessive fear.

Time Limits

Some firms require traders to hit their profit targets within a strict time frame such as 30 days while others provide unlimited time. Having more time means traders can wait for the best setups rather than forcing trades just to meet a deadline. When traders have no time limit then they can trade in a relaxed mode and easily apply their trading strategy without fear of time. 

Consistency Rules

Certain firms impose consistency requirements which means traders must spread their profits across multiple days rather than making a majority of their gains in a single trade. Some firms may limit daily profits or enforce a minimum number of trading days. These rules can make the challenge more limited and difficult to complete even though their goal is to promote discipline.

Trading Restrictions

Some firms place limitations on traders such as banning high-impact news trading or requiring stop-losses with restricting overnight and weekend trades. The fewer restrictions a firm imposes the easier the challenge becomes which helps traders to stick to their personal strategies rather than adjusting to imposed limitations.

Now that we know what to look for how you can choose the right one? Let’s see. 

How to Choose the Right Prop Firm for You

Choosing the right prop firm evaluation challenge ultimately depends on your risk tolerance, trading style, and goals. Here are a few questions to ask yourself when considering different firms:

• Do the profit target and time limit align with my trading strategy? If you prefer a low-risk approach then you may want a challenge with a lower profit target or no time limit.
• Can I comfortably meet the drawdown rules without changing my strategy? Understanding your personal risk tolerance and historical drawdowns in your trading is important to choosing a firm with suitable rules.
• Does the leverage and position sizing provided by the firm suit my trading style? Some firms provide high leverage which can be useful for short-term traders but also can be risky for those with a more conservative approach.
• Are the trading hours flexible enough for my schedule? If you are unable to trade during the most popular periods of the day then find out those companies that allow weekend and overnight trading.
• What is the cost of the challenge and does the fee structure make sense to me? 

Final Thoughts:

The level of difficulty depends on the firms. Different firms have different evaluation criteria. If you want to choose those firms that provide easy evaluation criteria then you need to search firms and read their criteria in detail and choose one that you think you can easily achieve.