Table of Contents
Introduction to Prop Firm Challenges
Prop trading firms provide traders with access to funded accounts, allowing them to trade with the firm’s capital while keeping a share of the profits. To qualify for a funded account, traders must pass an evaluation phase that assesses their ability to manage risk and generate consistent returns. The most common evaluation structures include the One Step Challenge Prop Firm model and the 2 Step Evaluation process.
Each evaluation model has its advantages and disadvantages, and choosing the right one depends on a trader’s experience, strategy, and risk tolerance. Understanding the pros and cons of these models can help traders make an informed decision when selecting a prop firm.
What is a One-Step Challenge Prop Firm?
A One Step Challenge Prop Firm requires traders to pass a single phase before receiving a funded account. This means that traders only need to meet specific profit targets and risk parameters in one stage, without having to repeat the process.
Pros of One-Step Challenges
- Faster Access to Funding
Since traders only need to complete one phase, they can obtain a funded account much quicker compared to a 2 Step Evaluation. This is ideal for experienced traders who want to start trading with firm capital as soon as possible. - Lower Psychological Pressure
With only one challenge to pass, traders experience less stress compared to having to complete multiple evaluation phases. This allows traders to focus entirely on executing their strategies without worrying about repeating the process. - Simplified Process
One-step challenges have straightforward requirements, making them easier to understand. Traders only need to meet profit targets and stay within risk limits for a single evaluation, without worrying about additional conditions. - More Suitable for Aggressive Traders
Traders who prefer high-risk, high-reward strategies may find one-step challenges more appealing, as they do not have to maintain consistency over multiple phases.
Cons of One-Step Challenges
- Higher Entry Fees
Since these challenges offer a faster route to funding, they often come with higher entry fees compared to 2 Step Evaluation models. Traders must be prepared to invest more upfront. - Stricter Risk Management Rules
Many One Step Challenge Prop Firms enforce tighter risk limits to prevent reckless trading. This can be challenging for traders who rely on flexible risk management techniques. - Lower Profit Splits in Some Cases
Some prop firms offering one-step challenges provide lower profit splits to funded traders compared to those who complete a two-step evaluation.
What is a 2 Step Evaluation?
A 2 Step Evaluation requires traders to complete two phases before qualifying for a funded account. The first phase usually has higher profit targets, while the second phase focuses on consistency and risk management.
Pros of Two-Step Evaluations
- Lower Entry Costs
Most 2 Step Evaluations have lower challenge fees compared to one-step challenges. This makes them a more cost-effective option for traders who prefer a structured evaluation process. - More Emphasis on Consistency
The two-step model encourages traders to focus on long-term consistency rather than short-term gains. This is beneficial for traders who use disciplined strategies that prioritize steady profits. - Higher Acceptance Rates
Since traders have two phases to prove their skills, the passing rate can be higher compared to a one-step challenge where traders only get one chance to qualify. - Better for Risk-Averse Traders
Traders who prefer lower risk and a more measured approach to trading may find 2 Step Evaluations more aligned with their trading style.
Cons of Two-Step Evaluations
- Takes Longer to Get Funded
Since traders must pass two separate phases, the process of obtaining a funded account takes longer compared to a One Step Challenge Prop Firm. - More Psychological Pressure
Completing the first phase does not guarantee funding, as traders must also pass the second phase. This can create additional stress, especially for traders who perform well in the first phase but struggle in the second. - Stricter Consistency Rules
Some 2 Step Evaluations require traders to maintain specific consistency rules, such as limiting lot sizes or setting profit distribution requirements. This can restrict trading flexibility.
Which Evaluation Model is Best for You?
Choosing between a One Step Challenge Prop Firm and a 2 Step Evaluation depends on a trader’s individual goals and trading style.
- For aggressive traders who prefer fast funding and are confident in their ability to hit profit targets quickly, a one-step challenge may be the better option.
- For traders who focus on consistency and prefer a structured approach, a two-step evaluation can provide a smoother path to long-term success.
Funding Pips and Prop Firm Evaluations
Many traders look for firms that provide flexible evaluation models, such as Funding Pips, which offers opportunities for traders to access capital through structured challenges. Whether choosing a one-step challenge or a two-step evaluation, traders must ensure that the firm provides favorable conditions, including reasonable drawdown limits, high profit splits, and access to a reliable trading platform.
Final Thoughts
Both One Step Challenge Prop Firm and 2 Step Evaluations have their advantages and drawbacks. The right choice depends on a trader’s risk appetite, experience level, and trading objectives.
For those looking for quick funding and a straightforward process, one-step challenges may be the ideal solution. On the other hand, traders who prioritize consistency, lower fees, and a structured evaluation process may find that a two-step evaluation better aligns with their strategy.
Regardless of the evaluation model, success in prop trading depends on strong risk management, disciplined execution, and selecting a prop firm that offers the best trading conditions.
