If you fail a prop firm challenge, the evaluation account is closed, the fee you paid is not refunded, and you owe the firm nothing further — there is no debt, no margin call and no obligation to buy another evaluation.
That is the mechanical answer, and it is the one most traders need first, because the fear on the night of a failure is usually bigger than the fact. You have not lost money you did not have. You have lost a fee and a month of work.
I have spent 37 years in the markets, twenty of them on institutional FX desks, and I have mentored more than 1,000 traders since 2009. The traders who eventually get funded are rarely the ones who never failed. They are the ones who read the failure correctly and changed one thing before they paid again.
A prop firm evaluation fails mechanically. There is no committee and no argument. One number crosses a line, and the account stops.
On the programme we run, the trigger set is published before you pay: 2.5% maximum daily loss, 7.5% maximum total drawdown on accounts up to $100,000, every position carrying a stop loss from the moment it opens, 2.5% maximum open risk across the book, and a minimum of five trading days. The full list of evaluation rules sits on the funding page, and it is worth reading twice before you pay anyone, anywhere.
Four things happen in the minutes after a breach:
There is a second category that traders confuse with failure: a warning. Some rules give you one. Maximum open position risk is a written warning on the first occurrence and ends the evaluation on the second. A position opened without a stop loss gets a single warning, and any profit on that position is void while any loss on it still counts. Those are not failures. They are the last cheap signal you will get.
This is the part that separates a prop evaluation from every other form of leverage. On a personal account, a bad month costs you the capital. On an evaluation, the worst case is the fee.
| Account size | Fee (two-step) | Maximum loss | Daily loss limit | 1% risk per trade |
|---|---|---|---|---|
| $10,000 | A$60 | $750 | $250 | $100 |
| $25,000 | A$125 | $1,875 | $625 | $250 |
| $50,000 | A$250 | $3,750 | $1,250 | $500 |
| $100,000 | A$500 | $7,500 | $2,500 | $1,000 |
Read the fee column against the loss column. A$250 buys you the authority to trade a $50,000 account with a $3,750 loss limit. That asymmetry is the entire product — and it is also part of the reason failure rates are what they are. A fee that small makes an attempt feel cheap, and cheap attempts get made without preparation.
Two costs are easy to miss.
The first is that the fee is not a subscription. On our programme it is one-time, there is no monthly charge while you trade, and there is no fee once you are funded. That also means there is no discounted reset. Fail, and the next attempt costs the same as the first. Some firms sell cheaper resets; we do not, and I think that is the correct call, because a cheap retry encourages the wrong behaviour.
The second is the 30-day money-back guarantee. It applies before your first trade and not after. The moment you place a trade, the programme has started and the fee is non-refundable. That is a fair line, but it means the guarantee protects a change of mind, not a bad month.
Every failure maps to one of five causes, and each cause has a different fix. Fixing the wrong one is how traders spend four fees in a row.
| Failure | What it actually says | The fix |
|---|---|---|
| Daily loss breach | Size too large for the daily limit, or no stopping rule after a loss | Size from the daily limit, and end the day at two losses |
| Maximum drawdown | No cap on the losing run the strategy can produce | Reduce risk per trade until a normal run fits inside 7.5% |
| Position closed without a stop | Conviction replacing a defined risk | Stop and size on the order ticket, every time |
| Open risk breach | Correlated positions treated as separate bets | Net correlated pairs to one exposure |
| Prohibited practice | News-window or strategy rule broken on a technicality | Read the news rule and the platform clock before the session |
The consistency rule is a sixth thing that costs traders their funding, and it is not a failure. On our programme no single trading day may account for more than 50% of total profit. Break it and the result does not qualify — the evaluation does not end. You keep trading until no single day is above half the profit. Traders who read that as a breach and walk away are throwing away a live account.
Here is the arithmetic that decides whether a second fee is worth paying.
Take a strategy with a 40% win rate and honest risk control. The probability of five consecutive losses starting on the next trade is 0.6 to the fifth power, which is 7.8%. Over a 100-trade sample you should expect roughly three separate runs of five losses. This is illustrative arithmetic, not a projection of anyone's results — but the structure of it does not change with skill.
Now match that to the loss limit. A $50,000 account with a 7.5% maximum loss and 1% risk per trade absorbs seven full losses. A normal run of five takes you to 5% — still alive, but with only 2.5% of room left for the rest of the month. At 2% risk the same run takes you to 10%, and the account is gone before the run has finished.
Same trader. Same entries. Same edge. One gets funded and one pays another fee.
That is what a retry bought without a size change actually is: the same bet on the same arithmetic, with the same expected outcome and another A$250 attached to it.
The mistake almost everyone makes is starting at the profit target. Start at the loss limit instead, because that is the only number that ends the account.
| Risk per trade | Full losses in a row before the 7.5% limit | Full losses in one day before the 2.5% limit |
|---|---|---|
| 0.25% | 29 | 9 |
| 0.50% | 14 | 4 |
| 0.75% | 9 | 3 |
| 1.00% | 7 | 2 |
| 1.50% | 4 | 1 |
| 2.00% | 3 | 1 |
Two rows in that table matter more than the rest. At 1% risk you get two losses in a day and the session is over — the third breach is the daily limit, not the drawdown. At 1.5% risk a single loss takes 60% of the daily allowance, so one more stops you for the day.
Then work the target. At +0.35R expectancy per trade and 0.5% risk per trade, expected progress is 0.175% of the account per trade, so a 10% target is roughly 57 trades of average performance. At 1% risk it is roughly 29 trades — but you only have seven losses of room, and the table above says runs of five happen regularly. That is the trade-off nobody puts on a sales page: the target is a function of sample size, not bet size.
There is one more structural point. Our evaluation has no time limit. That is not a marketing line — it removes the incentive that causes a large share of failures. When a challenge has a 30-day clock, a trader who is 4% short in week four doubles size to finish, and the drawdown that follows is arithmetic, not bad luck. No clock, no reason to over-leverage.
The urge after a breach is to buy the next attempt the same evening. That urge is the same impulse that produced the breach. Do this instead:
A desk treats a blown limit as a process failure to be reviewed. Retail treats it as a personal failure to be avenged. The difference in outcome is not talent. It is the existence of a review loop.
That loop needs a complete record of every trade, including the ones that broke a rule, which is why the Game-Changer Ecosystem is built around a journal and a dashboard rather than a set of entry signals. Signals tell you what someone else did. A record tells you what you did, and only the second one can be audited.
The bottom line: Failing a prop firm challenge costs you the fee and nothing else — the account closes, the debt is zero, and the only thing that decides whether the next attempt is worth buying is whether your risk per trade changed. At 1% risk a 7.5% limit gives you seven losses of room and two in a day; at 2% it gives you three and one. Read the breach as data, resize from the limit rather than the target, and pay again only once the record shows a different process. Trading involves risk, and no evaluation structure removes it. Past performance is not indicative of future performance.
Written by Brad Gilbert, Founder & Head Trader at Traders4Traders — 37 years trading, twenty of them for investment banks, mentoring 1,000+ traders since 2009.
The evaluation account is closed and the fee you paid is not refunded. You owe the firm nothing further: no debt, no clawback and no obligation to buy another evaluation. If you want to try again you buy a new evaluation, usually at the normal price rather than a discounted reset.
No. On an evaluation the worst case is the fee. You are trading a simulated account against a loss limit, not borrowing capital, so a breach ends the account rather than creating a debt. The genuine losses are the fee and the time spent.
Generally no, and it is worth checking before you pay. On our programme a failed evaluation is not refunded, and the 30-day money-back guarantee only applies if you have not yet placed a trade. After the first trade the fee is non-refundable.
Only if the record shows the breach came from position size. Buying the same account size with the same risk per trade reproduces the same arithmetic and the same expected outcome. Recompute size from the loss limit, test it on a defined sample, then decide.
Small enough that a normal losing run fits inside the maximum drawdown. With a 7.5% maximum loss and 2.5% daily limit, 1% risk per trade allows seven consecutive losses and two in a day. At 0.5% it allows fourteen and four. Most failures come from sizing that leaves fewer than five losses of room.
The daily loss limit resets every trading day and covers realised plus unrealised losses; maximum drawdown is measured from your starting balance and does not trail. On our programme the daily limit is 2.5% and the maximum drawdown is 7.5%, with the floor fixed at 92.5% of the starting balance.
The Game-Changer Trading System gives you the same tools the desk uses every day.