How forex trading challenges work

Most prop firms give traders challenge evaluations, which are composed of 2 stages.

The first stage of the  evaluation process is the challenge. The forex Challenge stage has rules to be followed, and the Profit Target must be hit in order to obtain live funds. The maximum time limit in order to finish the forex trading challenge is 30 days, the trader can go on to the verification phase as soon as all of the trading objectives (profit target, drawdown limits respected, minimum days respected) have been satisfied. Most forex challenges must be finished in 10 trading days at minimum.  The second and last stage of the evaluation process is verification. The Verification stage’s goal is to evaluate trader’s consistency in trading. The prop firm must be certain that traders can trade profitably using their system or technique over the long term while adhering to the rules. Compared to the first stage of the forex trading challenge level, the Verification stage’s Trading Objectives are simpler. The Profit Target is halved in the Verification process, and traders have a full 60 days to succeed.

What happens when trading challenges rules are breached ?

The account will be automatically invalidated. Traders will no longer be able to use that account in the Evaluation process if they break any of the Trading Objectives. They’ll need to purchase a new one. The prop business will give traders a new forex trading Challenge at no cost if they are successful in not breaching any of the Trading Objectives (whether that be the first stage Challenge or Verification) in the majority of forex challenges, but there is an exception. Prop businesses are aware that market conditions aren’t always favorable for a trader, and they place a high value on risk management abilities because it prevent traders in blowing up their accounts. Additionally, if traders have not exceeded the loss limits, have traded for at least 10 days, and have more than 5% profit, on equity, on their forex Challenge, 3 days before the trading period ends, traders are eligible for a free extension of 14 calendar days for the challenge.

What happens after passing the forex trading challenge?

When a trader becomes a funded trader, after successfully passing the 2 stages of the challenge. The prop firm will provide the trader with the most convenient trading environment (low spread, low commissions) and with real capital to trade with. In the funded accout the Profit Target will be fully removed, in order to offer traders the flexibility to trade with peace of mind and to ensure that they are not stressed out by pursuing any targets. Prop firms simply ask that traders abide by the drawdown criteria (daily and maximum drawdown limits), which are the most significant ones. The prop firm account is linked to a real money live trading account of the proprietary trading firm. Once the traders has achieved some profits and wants to withdraw, The trader will have to send an email to the Proprietary trading firm support that will issue the cash. After the payout has been confirmed legit and the rules have been respected, the payout will be sent, i twill usually take within 1-2 business days. Payouts are usually processed with Regular bank wire transfers, Skrill, or cryptos. For a profit split of up to 90%, there is no required minimum profit. Whatever profit traders make, the prop firm will divide it by 80/20and give traders the money.