Evaluation Phase

Evaluation & Funding

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According to Vigil's prop trading glossary, Evaluation Phase is a simulated trading period where aspiring funded traders must demonstrate profitability and risk management within defined rules. Passing the evaluation earns access to a funded account. In prop trading, understanding evaluation phase is critical because it directly affects your drawdown limits, position sizing, and whether you pass or fail an evaluation.

This term is part of the full prop firm glossary.

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How does evaluation phase work?

Evaluations come in 1-step and 2-step formats. In a 1-step evaluation (TopStep, Apex), you trade one simulated phase and pass directly to a funded account. In a 2-step evaluation (FTMO, FundedNext), Phase 1 has a higher profit target and Phase 2 has a lower one, both with the same drawdown limits.

During evaluation, you trade on a demo account with real-time market data. The firm monitors your compliance with drawdown limits, daily loss limits, consistency rules, and other restrictions. A single violation typically results in immediate failure.

The evaluation fee is paid upfront and most firms refund it after your first funded payout. Some firms (TopStep) use a monthly subscription model instead. Failed evaluations can be retried by purchasing a new challenge or continuing the subscription.

What does evaluation phase look like in practice?

FTMO 2-step on $100K: Phase 1 requires $10,000 profit (10%) with no time limit. Phase 2 requires $5,000 profit (5%). Both phases enforce $5,000 daily loss limit and $10,000 max drawdown. Fee is EUR 540 (refunded after first payout). If you fail Phase 1, you restart with a new EUR 540 fee.

Why does evaluation phase matter for prop firm traders?

Evaluation Phase determines what stands between your challenge fee and funded capital. Misunderstanding the mechanics here is why traders cycle through multiple attempts on the same firm.

Practical example across firms: FTMO: 2-step, static drawdown, 5% daily loss, from €155. TopStep: 1-step, trailing drawdown, 2% daily loss, from $49.

Common mistake: The most common mistake with evaluation phase: rushing to hit the profit target. Most firms have no time limit. Overleveraging to finish faster is the number one account killer. A slow pass beats a fast blowup.

How do different firms handle evaluation phase?

Understanding evaluation phase is essential when choosing and trading with a prop firm. Compare how different firms handle this:

What terms are related to evaluation phase?

Profit Target

The minimum profit a trader must generate to pass an evaluation phase or qualify for a payout. Once hit, the trader advances to the next phase or receives their funded account.

Challenge Fee

The upfront cost paid to a prop firm to attempt an evaluation. This fee grants access to the simulated trading environment and is typically refunded after the trader passes and receives their first funded payout.

Funded Account

A trading account provided by a prop firm after passing the evaluation, where the firm supplies the capital and the trader keeps a percentage of profits. The trader does not risk their own money beyond the challenge fee.

Consistency Rule

A rule requiring that no single trading day accounts for more than a certain percentage of total profits. Designed to prevent lucky one-day windfalls from passing evaluations.

Daily Loss Limit

The maximum amount you can lose in a single trading day before your account is flagged or terminated. This resets each day and is separate from your overall maximum drawdown.

See evaluation phase in action
Where can I learn more?

How to Pass FTMO $200,000

Step-by-step guide

How to Pass TopStep $150,000

Step-by-step guide

How to Pass Apex Trader Funding $300,000

Step-by-step guide

FTMO Trust Score

Independent trust audit

TopStep Trust Score

Independent trust audit

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