Evaluation Phase
Definition
The evaluation phase is the testing period where prop firms assess a trader's skill before granting a funded account. Most firms use a two-phase evaluation consisting of a Challenge and a Verification phase.
The evaluation phase is designed to filter out traders who cannot manage risk consistently. In FTMO's model, Phase 1 (Challenge) requires hitting a 10% profit target with a 10% max drawdown and 5% daily loss limit within 30 days. Phase 2 (Verification) requires a 5% profit target within 60 days with the same risk limits.
Different firms structure evaluations differently. Some have single-phase evaluations with higher fees, while others like FundedNext offer multiple evaluation paths. The key metrics evaluated are: ability to hit the profit target, adherence to drawdown rules, and often a consistency requirement.
Statistically, pass rates for prop firm evaluations range from 5% to 15%. The most common reason for failure is drawdown violation, not inability to profit. This is why traders who use compliance tracking tools like PropJournal tend to pass at significantly higher rates — they avoid accidental violations that would otherwise end their challenge prematurely.
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