Explainer
How to pass a prop firm evaluation
An evaluation measures whether you can keep to a firm’s fixed rules, so you prepare by writing your own rules down and testing them against those limits.
Updated
What an evaluation measures
A prop firm evaluation is a test account with a set of rules. You trade it, and the firm checks two things: whether your result reaches the target, and whether it stayed inside the limits on the way there.
The limits do most of the work. A single day or a single trade that breaks one of them can end the attempt, even if the account was ahead.
Every program writes its own rules, so this page does not give figures. Read your program’s rulebook and use its numbers, not anyone else’s.
- Evaluation
- A test account run under a firm’s rules, used to decide whether a trader moves to a funded account.
- Profit target
- The result an evaluation account has to reach.
- Loss limit
- How far the account may fall. It can be fixed from the start or trail the account’s highest balance.
- Consistency rule
- A rule about how the result is spread across days or trades.
What you can control before you start
You cannot control the market. You can control three things: whether you know the rules, whether your own trading rules are written clearly enough to follow under pressure, and how much you risk on each trade.
Most evaluation trouble comes from the first and the third. A trader who has not worked out what a trailing limit does, or who risks too much on each trade for the room the limit leaves, runs into the rule rather than the market.
Turn the limits into things you can test
A limit is a distance. A backtest records distances. That is the link.
Measure risk in R, the distance from entry to your initial stop. Divide the dollar loss limit by the dollars you risk on one trade and you get the limit in R: how many full stops it holds. A backtest reports its deepest fall in R, so the two can sit side by side.
In our reports, max drawdown is the largest fall of cumulative net R below its running peak, in exit order, starting at 0. The findings also show the longest losing streak. Those two numbers are the first thing to compare with a limit.
Nothing you test beforehand can promise an outcome. Testing shows how your rules behaved against limits like yours, on past data.
Test the rules before you spend on an attempt
Write your rules so they have one reading, run them on real futures history with costs on, and read every trade. Commissions and fees vary by broker; a backtest should use your own.
Hold some months back. In our service about 30% of months, spread across every year, are held back for each strategy. Those months are the part of the history you did not tune the rules on.
If your rules are not exact yet, use a replay first. Our Trade Lab replays NQ, ES and GC bar by bar, with later bars hidden, and it is free with an account and a verified email.
What a backtest cannot do
Simulated results do not represent actual trading. They are built with the benefit of hindsight, and they cannot show how a live day feels after a run of losses.
A backtest also uses fixed rules, and an evaluation is traded by a person. That is why the replay and a small forward test matter. They test the part of the job a backtest cannot.
A short routine
Here is the order that keeps the work honest.
- Read the program’s rules and write each limit in one plain sentence.
- Write your trading rules so they cannot be misread.
- Run them with costs, and read every trade.
- Compare the deepest fall in R, the longest losing streak and the lowest day with each limit.
- Change one thing at a time and run again.
Questions and answers
Can a backtest tell me whether I will pass an evaluation?
No. A backtest shows what your rules did on past data. It does not predict a future attempt, and simulated results do not represent actual trading.
What does a prop firm evaluation measure?
Whether the account reaches its target while staying inside the firm’s loss limits and any other rules, such as a daily limit or a consistency rule.
Do I need to know the rules before I backtest?
Yes. A limit is only useful as a test if you know exactly how your program measures it, so read the rulebook first.
Is a replay useful for evaluation practice?
It is useful for rules that are not exact yet. You step through history one bar at a time and make each decision yourself. It does not replace a test of fixed rules.
Does this page name which program to use?
No. We do not rate programs or point you to one. Programs differ, and each one’s own rulebook is the source for its numbers.