Want to trade with big capital but only have a small account? That’s where prop firms (proprietary trading firms) come in. But before you can access their funds, most require you to pass a prop firm challenge.
Here’s how it works and what you need to know to succeed.

What Is a Prop Firm?
A proprietary trading firm (prop firm) allows skilled traders to trade the firm’s capital in exchange for a share of the profits—often up to 70–90%.
You don’t need to risk your own money beyond the upfront fee for the challenge.
Popular firms include:
- FTMO
- MyForexFunds (some changes recently)
- The5ers
- True Forex Funds
- FundedNext
What Is a Prop Firm Challenge?
A prop firm challenge is a test that evaluates your ability to trade consistently, manage risk, and protect capital. It’s a simulated account with strict rules.
If you pass, you’ll earn a funded account where you trade real capital and keep a percentage of the profits.
Key Elements of Most Challenges
1. Profit Target
You need to reach a set return—typically 5–10%—within a certain period (e.g., 30 days).
2. Maximum Daily Loss
You cannot lose more than a certain percentage in a day, often 4–5%.
3. Maximum Overall Loss
Your total losses across the challenge cannot exceed 8–10%.
4. Minimum Trading Days
You usually need to trade for 5–10 separate days, even if you hit the profit target early.
5. Trading Style Rules
Some firms prohibit:
- Holding trades overnight or over weekends
- News trading (e.g., trading during major economic events)
- Using high-frequency bots or copy trading