Learn · Prop firm challenges · 7 min read
How prop firm challenges work
A prop firm (proprietary trading firm) lets you trade its money instead of your own. To get an account, you usually pay a fee and pass a challenge: a test where you must hit a profit target without breaking any loss rules.
The basic deal
- You pay a one-time fee for a challenge, for example a $100,000 account.
- You trade it and try to reach the profit target without breaking the daily loss or max loss limit.
- If you pass, you get a funded account (often a simulated one) and keep a share of the profits, called the profit split.
- If you break a rule, the account ends and you'd need to buy a new challenge.
Challenge types
- 2-Step: two phases. A common setup is a bigger target in phase 1 and a smaller one in phase 2. Usually the loosest loss limits.
- 1-Step: one phase, so you get funded faster, but the loss limits are usually tighter.
- Instant: no test. You pay more and start on a funded account right away, usually with tight rules.
The rules that end most challenges
- Daily loss limit: the most you can lose in one day. See our drawdown guide.
- Max loss limit: the most you can lose in total. Sometimes it trails your highest balance.
- News rules: some funded accounts can't trade right around big news. See our news rules guide.
- Weekend holds: some accounts must close trades before the weekend.
What the firms we track offer
| Firm | Challenge types, sizes and profit split |
|---|---|
| FTMO | 2-Step, 1-Step, Instant · $10k to $200k · split Up to 90%, depending on the account type |
| The5%ers | 2-Step, 1-Step · $5k to $100k · split Varies by program, rising toward 100% as the account grows |
| E8 Markets | 1-Step · $5k to $500k · split 80–100% (you choose at checkout) |
Rules checked on each firm's own site (Oct 22, 2026, Oct 24, 2026). Rules change often, so check before you buy.
Is it worth it?
A challenge fee is money you can lose, and many traders don't pass on the first try. The traders who do best treat the rules as their risk plan: small position sizes, a hard daily stop, and no trading around news they don't understand. Start with our position size guide if you haven't.
Some links on this page are affiliate links. If you buy through them, Pipzilla earns a commission at no extra cost to you.
- You pay a fee, hit a profit target, and avoid breaking the loss limits.
- 2-Step is usually the most forgiving; Instant costs more with tighter rules.
- Most challenges are lost to the daily loss limit, not the target.
Find the firm whose rules fit how you trade →
For learning only, not financial advice. Trading on margin is high risk.