Prop firm challenge — Trading Glossary

A paid evaluation from a proprietary trading firm: reach a profit target without breaking its loss limits, and the firm gives you a funded account.

Typical rules are a 10% target (5% in a second phase), a 5% daily loss limit and a 10% maximum loss. Industry estimates put the share of buyers who get funded at roughly 5–15%.

Also called: prop firm, prop challenge, funded account challenge, prop firm challenges.

Taught in

Passing a Prop Firm ChallengeSurvive First

Why most challenges fail on the rules rather than the setup: what 40,000 simulated challenges show about risk per trade, the daily loss limit that counts open trades, the personal rules that keep you inside it — and the honest limit of small risk.

Also covered in that lesson

Daily loss limitThe most a prop firm account may lose in one trading day — commonly 5% — after which the account fails. At many firms it counts open trades as well as closed ones.