Two-Step Challenge

Structure of the two phases

The two-step challenge is the standard path to a funded account at a prop firm. Phase 1 requires a higher profit target, historically 8–10 % of the nominal account balance. Phase 2 serves as a consistency check with a lower target, usually 4–5 %. The same loss limits apply in both phases: a daily loss limit of typically 4–5 % and an overall loss limit of typically 8–10 %. Many providers also require minimum trading days (e.g. 4–5 per phase); time limits have been dropped by many providers in recent years.

How it differs from other models

A one-step challenge drops phase 2 – but its rules, often a trailing drawdown, tend to be stricter. With instant funding the trader starts without an evaluation but under tighter limits and a lower profit split. The two-step challenge sits in between: more testing effort, but historically milder rules in the funded account.

The economics of the challenge

Participation costs a fee that scales with account size (often €100–700). A failed attempt requires a new fee or a paid reset. Historically only a minority of participants passes both phases – fees from failed attempts are a core revenue source for many providers. Some prop firms refund the fee with the first payout.

Why participants fail

The most common reason is not the profit target but breaching the loss limits – often through oversized positions close to the target or after a losing streak. A rule breach ends the challenge immediately, regardless of interim progress. Practising a provider's exact parameters under realistic conditions reduces paid failed attempts: the GlanWick simulator replicates two-step conditions with profit targets and loss limits risk-free – GlanWick is a training and simulation tool and not a prop firm itself.