| Plan Size | This is the starting amount of the funds you will be working with in your evaluation / challenge account. A $50k plan means you will start trading with $50,000 in your account and your profit targets and drawdown are all relative to this amount. |
| Profit Target | In general, profit targets do not vary much between prop firms and most often you need to achieve a 6% increase in the value of your account in order to pass the challenge or evaluation account in order to get funded. Profit target must be achieved without breaking any rules or losing more than the maximum amount allowed under drawdown limits. |
| Drawdown | One of the major differences between prop firm evaluations are the rules they have regarding drawdown. Drawdown is when you are losing money on a trade. Some firms apply drawdown limits at the end of the trading day (EOD) while others operate an intraday drawdown. The total amount you are allowed to lose is most commonly 5% of your starting balance but as you go into profit the drawdown balance is moved up so that it is calculated from the highest balance you reach. The drawdown balance does not go back down. Here is an example of a failed evaluation which illustrates this perfectly. This was a $50k evaluation account from FlexyTrade with a profit target of $53,000 and an intraday drawdown of $2,500. As you can see from my drawdown limit, my account balance had reached $52,762, just $238 short of passing the evaluation. Unfortunately I was AFK (away from keyboard) for a few minutes and I left a trade open WITHOUT a STOP LOSS. This is what happens when you break your own trading rules, lesson learned 🙂 |