Evaluation phase
The evaluation phase is the first stage of a two-step prop firm challenge, in which you must reach a profit target — commonly 8% — without breaching the account's loss rules.
While the phase is live, every core rule applies at once: a daily loss limit of commonly 4–5%, a maximum drawdown of commonly 10%, and minimum trading days, commonly three to five. Many firms no longer impose a maximum time limit, so any pressure to finish quickly comes from the trader, not the calendar.
Passing means hitting the target with every rule intact; the account then advances to the verification phase, where the target drops to commonly 5% under the same limits. Breaching any loss rule ends the attempt, and continuing requires a new fee or a paid reset.
The phase is defined by asymmetry: you must gain 8% while never losing more than about 5% in a single day or 10% in total. Oversized positions can reach the target in days but collide with the daily cap during a routine losing streak, which is why the rulebook itself is commonly described as the real opponent; see prop firm rules explained.
Example
On a $100,000 evaluation with typical numbers, the target is $8,000, the daily floor sits $5,000 below each day's starting level, and the overall floor is $90,000. A trader risking about $1,000 per trade needs eight net winning trades' worth of progress while never letting one day's losses stack past five.