PROP FIRM BASICS
An evaluation is a paid test on a simulated account. A funded account is the stage where your results are mirrored by the firm and you are paid a share. What changes is not usually the difficulty but the consequences: a breach on an evaluation costs the fee, a breach on a funded account costs the income.
By the Finotaur Team · Last updated: 27 July 2026
THE TWO STAGES
Both stages usually trade on simulated accounts. That surprises people who assume a funded account means trading the firm's capital directly. In most models the firm mirrors profitable traders' activity in its own accounts and pays a share of the result, which is why the rules on a funded account are often tighter rather than looser.
The differences that matter to a trader day to day are the fee structure, the payout mechanics, the rules that gate withdrawal, and what happens when a limit is breached.
| Evaluation | Funded account | |
|---|---|---|
| Cost | A fee, one-off or monthly, paid by you. | Often a smaller ongoing fee, sometimes none. Varies widely. |
| Goal | Reach a profit target without breaching a limit. | Generate withdrawable profit within the payout rules. |
| Payout | None. Profit made during an evaluation is not yours. | A share of profit, subject to minimum days, consistency and other gates. |
| Cost of a breach | The account ends. You lose the fee and may be able to reset for another. | The account ends. You lose the income stream and usually re-enter at evaluation. |
| Typical rule pressure | Profit target plus drawdown and daily loss limits. | Usually no profit target, but consistency and payout gates apply. |
The most consequential asymmetry is at the bottom of the table. An evaluation breach costs a fee that is usually modest. A funded breach costs whatever that account was earning, plus the time to pass again. Traders frequently size the same way at both stages, which prices those two outcomes identically when they are not.
EVALUATION FORMATS
A one-step evaluation has a single profit target. Pass it without breaching a limit and you move to funded. It is faster and usually carries a tighter drawdown or a stricter consistency requirement in exchange.
A two-step evaluation splits the process into two phases, typically with a smaller target in the second. The total profit required is often higher, but each phase individually is less demanding, and the extra phase gives the firm a second sample of your trading before committing.
Neither is objectively easier. The one-step compresses the same assessment into fewer trading days, which raises the pressure per session; the two-step spreads it out, which raises the total number of days you must avoid a breach. Which suits you depends on whether your risk of failure is concentrated in single bad sessions or in gradual drift.
Some evaluations have a maximum duration, some do not. An unlimited evaluation removes the pressure to force trades near a deadline, which is worth more than it sounds.
Whether a breached evaluation can be reset, at what cost, and whether progress is retained. This materially changes the real cost of failing.
How and when the account size increases on a funded account. Some plans require sustained performance over months before any increase.
Some firms charge a separate fee to activate a funded account after passing. Worth knowing before you pass rather than after.
THE HARD PART
The pattern is common enough to be worth naming. A trader passes an evaluation with a disciplined process, reaches a funded account, and breaches it within weeks. The strategy did not change and the rules did not get harder.
What changed is that the outcome now means something. During an evaluation the downside is a fee. On a funded account there is real income attached, and that changes behaviour in specific directions: holding losers longer because a loss now costs something real, and cutting winners early to protect a payout that is within reach.
Both behaviours are visible in a trade log before they are visible in the account. Average hold time on losers lengthening, average R on winners shrinking, and position size drifting away from the calculated figure are all measurable, and all of them precede a breach rather than following it.
The traders who transition cleanly tend to be the ones who did not change anything at all, and the only reliable way to know whether you changed anything is to have recorded what you were doing before.
BEFORE YOU PAY
Prop firm terms vary more than any comparison article can keep current, and several firms have materially revised drawdown, consistency and payout rules with little notice. Treat every external summary, including this one, as a description of the categories rather than of any firm's live terms.
The list below is what to locate in the actual agreement before paying an evaluation fee. Each of these has been the subject of a surprise for someone.
It sometimes differs between evaluation and funded, and whether it trails on realised or unrealised equity changes your risk budget substantially.
Minimum trading days, minimum trades, consistency percentage, and any holding-period restriction. Meeting the profit target alone is rarely sufficient.
How often you may withdraw, the minimum withdrawable amount, and what share you keep.
Whether a reset is available, what it costs, and whether you re-enter at evaluation or lower.
STEP BY STEP
Confirm the model separately for evaluation and funded. They are not always the same, and the funded stage is sometimes the stricter of the two.
Minimum days, minimum trades, consistency percentage, holding rules. Write them down so meeting the profit target is not mistaken for qualifying.
The real cost of failing is the evaluation fee plus the reset cost plus the time. That total is the number to weigh, not the headline fee.
The account's face value is not the risk budget at either stage. Derive it from the distance to the limit.
Position size, intended risk, hold times and average R. This becomes the baseline you compare against once funded.
Lengthening holds on losers, shrinking R on winners and size drifting from the calculated figure are the measurable early signs of the transition problem, and all three appear before a breach.
FAQ
An evaluation is a paid test with a profit target, where any profit made is not yours. A funded account is the stage after passing, where your results are mirrored by the firm and you receive a share of the profit subject to payout rules. Both usually trade on simulated accounts.
In most models the account you trade is simulated, and the firm mirrors profitable traders' activity in its own positions. The payout you receive is real money; the account you place orders in typically is not. This is also why funded-stage rules are often tighter rather than looser than the evaluation.
Neither is objectively easier. A one-step compresses the assessment into fewer trading days, which increases pressure per session, and usually pairs that with a tighter drawdown or stricter consistency rule. A two-step spreads it across more days, lowering the demand per phase but increasing the number of days you must avoid a breach.
Because the consequences change even though the rules do not. With real income attached, the common behavioural shifts are holding losers longer and cutting winners early to protect a payout. Both show up in a trade log as lengthening hold times on losers and shrinking average R on winners, usually weeks before the breach.
Which drawdown model applies at each stage and whether it uses realised or unrealised equity, every gate between profit and payout including minimum days and any consistency percentage, the payout schedule and profit split, and what a breach costs including whether a reset is available. Confirm all of it in the agreement rather than from a comparison article.
Frequently, and sometimes with little notice. Drawdown mechanics, consistency thresholds and payout terms have all been revised across the industry. Any external summary, including this page, describes the categories rather than a specific firm's current terms, so the agreement is the only authoritative source.