Prop Firm Evaluations Guide: How to Pass in 2026
What are prop firm evaluations? Prop firm evaluations are skill test accounts which prop firms give to traders in order to test their trading skills and strategies. Traders are required to meet specific profit targets without violating any trading rule, in order to qualify for the prop firm’s funded account.
Introduction
Think of the evolution of trading as those days when technology was limited and travelers had to rely on their feet while only the rich could afford horses and camels. Compare it to today when you can easily afford to board taxis, buses, and the likes, to reach your destination without wasting time.
The trading space is also experiencing similar evolution. There used to be a time when only the rich could easily make meaningful profits from trading. This was because they were the ones who could afford to deposit ten to hundred thousands of dollars into their trading accounts.
But prop firms come to flip the script. Now, you no longer need big capital before you can make big profits. Prop firms now offer tens of thousands to hundreds of thousands worth of evaluation accounts for relatively affordable fees. You can easily trade a $100k evaluation account by paying $500 to $700 fee. This precisely gives traders more reasons to trade with prop firms in 2026.
In this guide, we’ll explore prop firm evaluation rules, proven risk management guides to protect your evaluation accounts, and also provide you with a detailed guide on how to pass your evaluation accounts in 2026.
What You’ll Learn
- How prop firm evaluations work (updated rules & models)
- The most common reasons traders fail evaluations, and how to avoid them
- Proven practical risk management guide to protect daily & overall drawdown
- A step-by-step evaluation guide for your prop account
- Recommended prop firms for you in 2026
How Prop Firm Evaluations Work (Updated Rules and Evaluation Models)
Prop firms provide their traders evaluation accounts also known as challenge accounts. At this stage, you’re given specific profit targets which you are required to meet up with. The profits you make at the evaluation stages are solely to test your trading skills — you can not withdraw them.
Prop firm evaluations are in three models:
- The 1-step evaluation — a single phase account which only requires you meet a single profit target. After meeting this requirement, you’ll get your funded account credentials.
- The 2-step evaluation — a two phase evaluation account which requires you meet two different profit targets (one at phase one, and another at phase 2) before you get access to your funded account.
- The 3-step evaluation — a three phase evaluation account which requires you meet three different profit targets (phase 1, phase 2, and phase 3) before you get access to a funded account.
After you successfully pass your evaluation account, you will be given access to a funded account. This is the stage at which you can withdraw the profits you make.
Simply put: propfirm evaluation accounts test your skills, why prop firm funded accounts reward your skills with profits.
Updated Trading Rules You Should Keep in Mind Going into 2026
Prop firms operate on strict trading rules which they put in place to keep traders and capital in check. Here is a list of prop firm evaluation rules you should keep in mind going into 2026 (N.B: these rules vary from one firm to the other) :
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Daily Loss Limit
The daily loss limit is the maximum amount you’re allowed to lose in a single trading day. If you exceed this limit, your account is breached.
Example: FTMO enforces a 5% daily loss limit.
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Maximum Drawdown Rule
Maximum drawdown rule defines the maximum amount you’re permitted to lose overall. Breaching this rule results in immediate account termination.
Example: FTMO allows a 10% maximum drawdown.
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Profit Target
The profit target is the amount you must make to pass a phase or qualify for a payout.
Example: FTMO requires 10% in Phase 1 and 5% in Phase 2.
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News Trading Rule
News trading rules determine whether trading during high-impact news events is allowed. Always check if your firm restricts or permits news trading.
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Minimum Holding Time
Some firms require trades to be held for a minimum duration before closing, either manually or automatically.
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Minimum Trading Days
This refers to the minimum number of trading days required to complete a phase, regardless of how quickly you hit the profit target.
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Weekend Holding Rule
Check whether the firm allows holding trades over the weekend. This is especially important for swing traders.
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Consistency Rule
The consistency rule limits how much profit can come from a single trade or trading day. It is mainly of two types: profit consistency and lot size consistency.
This rule is common in instant funded accounts, although it is now being applied by some firms to evaluation accounts.
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High-Frequency Trading & Tick Scalping
This rule affects scalpers the most. If you’re a scalper, check restrictions on trade frequency and minimum holding time per trade.
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Copy Trading & Group Trading
Some firms restrict copying trades between accounts or trading as part of a group. Always confirm this beforehand.
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Martingale Rule
Firms define martingales differently. Check the firm’s FAQ to understand position scaling limits and restrictions.
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Expert Advisors (EAs) & Bots
If you use automated trading systems, confirm whether the firm allows EAs or bots, as well as under what conditions.
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Leverage Rules
Leverage rules define how much buying power you can use per trade. They prevent overexposure, and most firms automatically block trades that exceed allowed leverage.
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Inactivity Rules
Inactivity rule defines a period of time which your account is not to be without a trading activity. Most prop firms deactivate your evaluation account if you do not open any trade for a period of 30 days.
