Only 4% pass prop firm challenges. Not because traders can't trade - because rules are contradictory, hidden restrictions emerge only after funding, and the consistency rule punishes your best trades.
The Truth: Profit targets contradict drawdown limits. Commissions count as losses. News trading allowed in challenge but banned after funding. Rules are designed for maximum failure.
This investigation exposes contradictory requirements, hidden restrictions, statistical impossibilities, and how to identify rule traps before you pay.
Only 4% pass prop firm challenges. Investigation reveals rules designed for maximum failure: consistency rule punishes skilled trading, profit targets contradict drawdown limits, and hidden restrictions emerge only after funding.
Industry analysis shows these aren't skill-based failure rates - they're rule-based disqualifications.
The consistency rule limits single-day profits to 30-45% of total profits. Sounds reasonable until you realize what it actually does.
Example: How It Punishes Good Trading
You need $1,000 profit. Firm has 30% consistency limit. Day 1: You make $600 (great trade!)
Consistency: 60% = FAIL.
Now you MUST make at least $1,000 MORE in smaller increments just to lower that 60% below 30%. You're punished for making a skilled trade.
According to BrightFunded analysis, this rule is "anti-quant" - it penalizes strategies with long-tail performance that backtests prove profitable.
Profit target: 10%. Max drawdown: 10%. Sounds achievable?
The Problem:
You need 10% return without EVER dipping 10% below your high water mark. One bad day after hitting target = fail. Commission costs make it tighter.
Traders crush targets then get disqualified the next day on daily drawdown despite being profitable overall.
Hidden rules in fine print. Commission calculations, time zones, news restrictions often buried deep.
Confirm restrictions are identical. FTMO allows news trading in challenge, bans it after funding.
Factor commissions into loss limits. Account for spread widening during news.
#1: Consistency Rule (30-45% limit) - Punishes best trades
#2: Daily Drawdown + Profit Target Contradiction
#3: Hidden News Trading Ban (post-funding only)
#4: Commission/Swap Counting as Losses (undisclosed)
96% failure = 96% of challenge fees are pure profit. Too many passes = liability.
Complex rules create violation opportunities. Easier to deny payouts with 50+ rules vs 5 simple ones.
Post-funding restrictions (news bans, tighter limits) designed to trigger violations and reclaim accounts.
As BabyPips states: "Rules stacked in firm's favor, designed to limit payouts."
According to FTMO's official FAQ, here's the bait-and-switch:
News trading ALLOWED. Trade freely during all news releases.
News trading BANNED 2 min before + 2 min after major news on targeted instruments.
The Trap:
If your strategy relies on news trading, you pass challenge then immediately violate funded rules. Strategy that got you funded is now banned.
Not from bad trading. From rule violations: consistency limits, daily drawdown, hidden restrictions.
1% keep funded accounts beyond 6 months. Post-funding restrictions designed to reclaim accounts.
Avoid firms that punish single-day profits. Look for "no consistency rule" in marketing.
Ask if restrictions change after funding. Get it in writing.
Include commissions, swaps, spread widening in loss calculations. Build buffer.
Hidden rules in fine print. Time zones, commission treatment, news restrictions.