Evaluation Phase
The trading test period(s) a trader must pass — hitting profit targets while respecting all risk rules — before receiving a live funded account.
What is an Evaluation Phase?
An evaluation phase (also called a challenge phase) is the test stage where a trader must prove they can trade profitably while following the firm's risk management rules. Most firms have 1 or 2 phases before granting a live funded account.
Phase structures
| Model | Phases | Description | |---|---|---| | 2-Step | Phase 1 + Phase 2 | Standard; higher target in P1, lower in P2 | | 1-Step | Phase 1 only | Faster to funded, usually stricter rules | | Instant Funding | 0 | Pay fee, get funded immediately with a profit split cap |
Key rules during evaluation
All of these apply simultaneously:
- Hit profit target
- Stay within daily drawdown
- Stay within maximum drawdown
- Meet minimum trading days
- Follow firm-specific rules (no news trading, no EAs, etc.)
Cost
Evaluation phases cost a one-time fee (typically $50–$700 depending on account size). If you fail, you must purchase a new challenge.
How Firms Apply This Rule
FTMO uses a 2-phase model. Funding Pips offers 1-step and 2-step options. FundedNext offers both standard and instant models.
Related Terms
Profit Target
The minimum profit percentage a trader must earn to pass each phase of a prop firm challenge before moving to the next stage or receiving a funded account.
Profit Split
The percentage of trading profits a funded trader keeps versus what is paid to the prop firm, typically ranging from 70% to 95% in the trader's favour.
Minimum Trading Days
The minimum number of calendar or trading days a trader must be active in the market before being allowed to pass a challenge phase, even if the profit target is already met.
Consistency Rule
A rule requiring that no single trading day generates more than a set percentage of your total profits, preventing traders from 'getting lucky' on one big day.