The target is easy; the drawdown is the trap
Every prop firm evaluation is really two numbers pulling against each other. One is the profit target — usually 8% to 10% of the account — the amount you must make to get funded. The other is the drawdown, split into a daily loss limit and a total loss limit, the amount you are allowed to lose before the account is closed and the fee is gone. Traders obsess over the target because it is the reward, but the target is rarely what fails them. What fails them is the drawdown, because a normal, profitable strategy still produces losing streaks, and if your position size is large enough that a routine streak breaches the daily or total limit, you will be knocked out before your edge has a chance to compound toward the target.
This is why the single most important input here is risk per trade. Risk 2% and a 5% daily drawdown is gone after three losers in a session — and any strategy with a 45% win rate throws three-loss streaks constantly. Risk 0.5% and the same 5% daily buffer absorbs ten straight losses, which is a streak you might see once a year. Nothing about your entries or your win rate changed; only the size did, and the size is the entire difference between passing and re-buying. The table above makes this concrete: it holds your edge fixed and shows how the survivable losing streak collapses as risk per trade climbs.
How to use it
1. Enter the firm's account size, profit target, and both drawdown limits — they are on the challenge's rules page.
2. Enter your own honest stats: risk per trade, reward-to-risk, win rate, and how many trades you take a day.
3. Read the verdict. It compares your expected profit per trade against the target, and the losing streak your strategy naturally produces against the streak the drawdown allows.
4. Add the challenge fee and your profit split to see how much funded profit — and how many trades — it takes to earn the fee back, which is the real test of whether the challenge has positive expected value.
Common mistakes
Sizing for the target instead of the drawdown. Big size reaches the target faster but breaches the drawdown faster too, and the drawdown always wins the race for over-sized accounts. Ignoring the daily limit. Many traders plan around the total drawdown and forget the daily one, which is tighter and ends the session — and often the whole evaluation — in an afternoon. Assuming your live win rate. Evaluations are short samples; a strategy that wins 45% over a thousand trades can easily show 30% over the fifty trades of a challenge, so leave a wide margin. Treating the fee as sunk. The fee only makes sense if funded payouts recover it quickly; if recovery takes many months, the expected value of the challenge is negative even when your edge is real.
FAQ
Is this only for FTMO-style firms? No — it works for any evaluation with a profit target and drawdown limits, including crypto prop firms that fund USDT-perpetual futures trading. Enter that firm's specific numbers.
What win rate should I use? Your worst realistic one, not your best. Challenges are short, so use a win rate a few points below your long-run average to stress-test the drawdown fit. Pair this with the risk of ruin calculator for the probability of hitting the limit.
How do I lower the losing-streak risk without lowering my edge? Cut risk per trade. It is the only input that widens your survivable streak without touching your win rate or reward-to-risk. Use the expectancy calculator to confirm the smaller size still has a positive dollar edge.