Verification phase
The verification phase is the second and final stage of a two-step prop firm challenge; the profit target drops — commonly to 5% — while the loss rules stay exactly the same.
Its purpose is to filter luck. A trader who gambled through the evaluation phase must now produce profits a second time, and the lower target rewards the patient version of the same strategy rather than a bigger bet.
The rulebook carries over unchanged: a daily loss limit of commonly 4–5%, a maximum drawdown of commonly 10%, and minimum trading days counted again from zero. Passing grants the funded account, and at many firms the challenge fee is returned later with the first payout.
The commonly cited failure mode here is impatience. Because the target is smaller, traders oversize to finish in a day or two and cross the daily limit instead. One-step challenges remove this phase entirely in exchange for stricter drawdown terms; the comparison is drawn in one-step vs two-step challenges.
Example
On a $100,000 verification with typical numbers, the target is $5,000 with the same $5,000 daily cap and $90,000 overall floor as phase one. Spread across five trading days, that is an average of $1,000 of net progress per day — half the pace phase one required, under identical risk constraints.