2By The Numbers: The 96% Failure Machine
3Phase 2 Is Intentionally Harder Than Phase 1
You'd think Phase 2 would be easier—the profit target is lower. It's not.
The Drawdown Switcharoo:
According to industry analysis, "some firms apply static drawdown in Phase 1 and then introduce trailing drawdown or stricter conditions in Phase 2."
This creates a fundamental contradiction where Phase 2, despite having lower profit targets, can actually be harder to pass due to the drawdown rule changes.
Static Drawdown (Phase 1):
Your maximum loss is fixed from your starting balance. If you start with $100,000 and have a 10% max drawdown, you can never go below $90,000.
Manageable. You have a clear line you can't cross.
Trailing Drawdown (Phase 2):
The key issue: "If your balance falls, the drawdown does not move back down — it stays at the highest level reached, meaning you are always walking a tightrope."
Example: You start with $100,000. You make $2,000 (balance: $102,000). Your trailing drawdown is now $92,000 (10% from $102,000). If you take a $4,000 loss, you're at $98,000—above the original $90,000 static line but BELOW the $92,000 trailing line.
You fail. Even though you're still profitable overall.
Why this is designed to fail you: The moment you enter profit in Phase 2, the trailing drawdown restricts your trading range. You must maintain perfect entries or risk violating a drawdown that wouldn't have existed in Phase 1.
4The 3 Evaluation Models Explained
Prop firms use three evaluation models. Each has different failure mechanisms:
Model #1: Two-Step Evaluation (Most Common)
Phase 1: Hit 8-10% profit target within 30 days, stay within static drawdown.
Phase 2: Hit 5% profit target, but now with trailing drawdown + consistency rule.
The trap: Phase 2 looks easier (lower target) but the trailing drawdown makes it exponentially harder.
Model #2: One-Step Evaluation
Single Phase: Hit profit target in one evaluation period. Marketed as "faster."
The trap: The profit target is still high (8-10%), but consistency rules and time pressure apply from day one with no practice phase.
Model #3: Three-Step Evaluation
Three Phases: Each phase has progressively smaller profit targets but adds new rules.
The trap: More phases = more opportunities to fail. New rules get added in Phase 2 and Phase 3 that didn't exist in Phase 1.
5The Consistency Rule: A Mathematical Trap
The consistency rule is one of the most deceptive failure mechanisms in prop firm evaluations.
How the Consistency Rule Works:
The consistency rule states: "The consistency rule limits how much of your total profit can come from a single trading day, and if your biggest day accounts for more than a set percentage of your total profit, you may be disqualified."
Typical limits: 30-40% maximum from any single day.
Example: How It Punishes Good Trading
You need $1,000 profit to pass. The firm has a 30% consistency limit.
Day 1: You execute a perfect trade and make $600. (Excellent!)
Problem: $600 is 60% of your required $1,000. You now violate the consistency rule.
Forced solution: You MUST make at least $1,000 MORE in smaller increments just to lower that 60% below 30%.
Result: You're punished for skilled trading and forced to overtrade to dilute your best day.
The truth: "Consistency rules add complexity and increase the number of failed evaluations, which benefits prop firms whose business models depend heavily on evaluation fees."
11How to Actually Pass Evaluations (Despite the Traps)
Evaluations are designed to fail you. But some traders still pass. Here's how:
✅ Trade Smaller, More Consistent Profits
Aim for 0.5-1% gains per day instead of trying to hit the target in one week. This naturally defeats the consistency rule.
Why: If every day is 0.5-1%, no single day can be 30%+ of total profit.
✅ Ignore Time Pressure
Professional traders think in quarters and years, but prop firm challenges make you think in days and hours. This mismatch guarantees failure.
Solution: Trade only your best setups. If you don't hit the target in 30 days, reset and try again with zero psychological pressure.
✅ Choose Firms with Unlimited Time or Static Drawdown
Avoid firms that switch to trailing drawdown in Phase 2. Look for firms with consistent drawdown rules across all phases.
Why: Static drawdown gives you a clear safety line instead of a moving target.
✅ Verify Scaling Plan Before Passing
Check contract limits, position size restrictions, and any new rules that apply only to funded accounts.
Why: Passing the evaluation doesn't matter if scaling restrictions cause re-failure on the funded account.
✅ Avoid Firms Where Reset Fees Are Unlimited
If a firm profits more from reset fees than from funding traders, their incentives are misaligned.
Why: Firms that make money from failures design evaluations to maximize failures.
📋 Final Takeaways
- →96% fail by design - Only 4% pass evaluations, only 1% keep funded accounts long-term
- →Phase 2 is harder - Firms switch from static to trailing drawdown, making Phase 2 exponentially more difficult despite lower profit targets
- →Consistency rule trap - 30-40% single-day profit cap forces overtrading even after hitting targets
- →Psychological breakdown - 30-day time pressure creates urgency that professionals never experience, guaranteeing failure for 90%+
- →Reset fee revenue model - Unlimited retries at $50-$80 per reset generate perpetual income from failures, misaligning firm incentives
- →Scaling trap - Even if you pass, contract limits and position size restrictions cause re-failure on funded accounts