You pass a prop firm challenge by reaching the profit target without ever touching the daily loss limit or the maximum loss, and by trading on the minimum number of days. How to pass a prop firm challenge is therefore mostly a sizing question: on CMC Funded the target is 8% then 5% on Classic, or 10% on Direct, and each trade must be small enough that a losing run cannot reach a limit.
In short
- A challenge has three conditions: reach the profit target, stay above the daily loss limit and the maximum loss at every moment, and trade on at least 3 days in each phase.
- The loss limits end the account the moment they are reached, so the plan starts with how much you can lose, and only then asks how much you want to gain.
- Risking 0.5% of the account per trade on a $25,000 Classic account is $125, and 20 losses in a row are needed to reach the $2,500 maximum loss.
- The daily loss limit is measured on equity, so the floating result of every open trade counts against it, as well as closed trades.
- There is no time limit on CMC Funded, so nothing in the rules asks you to hurry.
How to pass a prop firm challenge: what are the conditions?
Passing means meeting three conditions at once. You reach the profit target for the phase, you never let the account fall to the daily loss limit or the maximum loss, and you trade on a minimum number of separate days. Break any loss limit and the attempt ends, however close you were to the target.
On CMC Funded the Classic 2-Step route has two phases, with targets of 8% and then 5% of the phase's starting balance. The Direct 1-Step route has one phase with a 10% target. Both routes need 3 trading days per phase, so one very good session cannot clear a phase by itself. The profit target guide sets out each figure in dollars for every account size.
The two loss limits do different jobs. The daily limit is 5% (Classic) or 4% (Direct) of that day's starting equity. The maximum loss is 10% (Classic) or 6% (Direct) of the starting balance, and it is fixed: it never moves up when you make money. If you want the wider picture first, the guide to what a prop firm is explains where the challenge sits in the programme.
Which route should you choose, Classic or Direct?
Choose the route whose limits you can trade inside with your normal position size. Classic gives wider limits (5% daily, 10% maximum) and asks for two smaller targets in a row. Direct gives tighter limits (4% daily, 6% maximum) and asks for one 10% target, so the target is large next to the room you have.
A quick way to compare is the room-to-target ratio. On Classic Phase 1 the maximum loss is 10% against an 8% target, which is 1.25 times the target. On Direct it is 6% against 10%, or 0.6 times. Put another way, a Direct account has only 6% of room below its start while it works towards a 10% gain, so the same strategy runs closer to the floor.
Classic also means more days of trading: two phases with 3 minimum trading days each. Direct reaches the reward stage after one phase. Neither is easier in itself. If your strategy produces large swings in equity, the wider limits of Classic leave more room. If you trade a few well-defined setups a week and keep losses small, the single target of Direct may suit you. Fees differ too, from $99 to $499 on Classic and $149 to $549 on Direct, depending on the account size.
How do you size trades so the loss limits stay out of reach?
Size each trade from its stop, not from a hunch: risk a fixed share of the account, divide by the stop distance in dollars per lot, and round down. A fixed risk of 0.5% per trade keeps a daily limit of 5% about ten losses away, and a fixed floor of 10% about twenty losses away.
The sum is: lots = dollars at risk ÷ (stop in pips × dollars per pip per lot). On EUR/USD one standard lot is worth $10 per pip, so a $125 risk with a 25-pip stop is $125 ÷ (25 × $10) = 0.5 lots. The position size calculator does the same sum, and the position sizing lesson walks through it for other markets.
Two limits shape the size. The first is the single-trade risk you can repeat without worrying. The second is the total you could lose at once, because the daily limit counts floating loss on every open position. Three trades risking $125 each, all open together, can lose $375 in one move if they share the same driver, such as a stronger dollar. Count correlated trades as one bigger trade.
Leverage is chosen at purchase, from 1:10 to 1:500. It changes the margin a position needs and the size you can open, and does not change the dollars at risk once you size from the stop. Higher leverage magnifies both gains and losses, so a lower leverage setting is one way to stop yourself opening more than you planned.
How do you build a trading plan for the challenge?
A challenge plan is a short written list of what you trade, when you trade it, how big each trade is and when you stop for the day. Writing it before the first trade matters because the limits are unforgiving and decisions made mid-loss tend to be worse than decisions made in advance.
Keep the plan to one page with these parts, each as a rule you can check after the fact:
- The markets and the hours you trade. Pick one or two instruments and a window, so you learn how they behave. The trading sessions lesson helps you choose the hours.
- The setups you take. Name them, and say what the chart must show before you enter.
- The risk per trade, as a share of the starting balance, and the largest number of trades open at once.
- The daily stop. Decide the loss at which you close the platform for the day, well inside the daily limit.
- The target for the week. A small number of good trades per week is a plan; "as many as it takes" is not.
- What you record. The trading plan lesson and the trading journal template give you something to copy.
The daily stop is the part that most often decides a challenge. A rule such as "three losses or 1.5% down, whichever comes first, then I stop" costs nothing on a normal day and removes the worst day from the account. The revenge trading guide shows how a stop-for-the-day line is tied to the daily limit.
Worked example: Phase 1 on a $25,000 Classic account
This example takes a $25,000 Classic account, where the Phase 1 target is 8% ($2,000), the daily loss limit on the first day is $1,250 and the maximum loss floor is $22,500. The plan risks 0.5% ($125) per trade and aims for twice the risk. The prices are for illustration.
- The risk per trade is $125. On EUR/USD with a 25-pip stop, the size is $125 ÷ (25 × $10) = 0.5 lots.
- The target on each trade is 50 pips, so a winner makes 50 × $5 = $250 (0.5 lots is $5 per pip), which is 2R, twice the risk.
- The daily stop is three losses, or $375. That is 30% of the $1,250 limit, so a full bad day leaves $875 of the limit unused.
- The Phase 1 target of $2,000 is 16R. Every $250 winner is 2R and every $125 loser is minus 1R.
- The room to the maximum loss is $2,500, which is 20 losing trades at $125, with none of them offset by a winner.
How fast can this plan reach 16R? It depends on how often the setups win. The table uses the plan's own 2:1 payoff, before costs, and counts how many trades 16R takes at each hit rate. The rates are examples to show the arithmetic and are not a forecast.
| Share of trades that win | Expected result per trade | Trades to reach 16R |
|---|---|---|
| 40% | 0.2R, or $25 | about 80 |
| 45% | 0.35R, or $44 | about 46 |
| 50% | 0.5R, or $63 | about 32 |
Two things follow. A modest change in win rate changes the number of trades a lot, so the plan needs a journal that shows what your rate really is. And losing runs are a normal part of the arithmetic: at 40% wins, a run of ten straight losses has a 0.6% chance on any given ten trades, and it would cost $1,250, half the room to the floor. The sequence that ends an account is rarely one bad trade; it is a bad run followed by a larger trade to recover.
Simulated trades carry trading costs, as they would on a live account: a commission when a trade opens and when it closes, a price markup on some symbols, and holding costs on positions kept overnight. These reduce each winner and add to each loser, so the true number of trades to 16R is higher than the table shows. The risk to reward ratio guide covers expectancy in full.
How do you handle a losing day?
Handle it by stopping at your planned daily stop and doing nothing else until the next day. A losing day only does damage if you answer it with larger trades, so the rule should end the day before the temptation to recover appears.
The daily limit also moves with your equity. It is worked out again at the start of each day from that day's starting equity: 5% on Classic, 4% on Direct. In the example, a day that starts at $25,000 allows $1,250. After a $375 losing day the next day starts at $24,625 and allows $1,231, a little less. An unused allowance does not carry over, and the limit is not a budget you can bank.
After a loss, ask three questions before the next trade. Did the setup meet every rule in the plan? Was the size what the plan says? Is the trade independent of the one that just lost, or is it the same idea in different clothes? If the answer to any is no, skip it. The FOMO trading guide covers the urge to chase moves you have missed, which is the other half of the same problem.
What happens in Phase 2 and at the reward stage?
On the Classic route you move to Phase 2 after Phase 1, with a 5% target against the same kind of limits. After that comes the reward stage, which has no profit target, and where the loss limits still apply. On Direct, the single phase leads straight to the reward stage.
Phase 2 asks for less, 5% (for example $1,250 on a $25,000 account), so it is tempting to relax. The same sizing rules apply. The lower target means fewer trades are needed, which is a reason to take fewer trades, not larger ones. The lesson on moving from challenge to reward stage covers how the rules carry over.
Rewards depend on performance, so treat the challenge as practice at the habit that matters most: keeping losses small enough to keep trading.
How passing works on CMC Funded
On CMC Funded every challenge account is simulated and traded on Match-Trader, in USD, with a size of $10K, $25K, $50K or $100K. The figures below are the first day's daily limit, the maximum loss floor and the Phase 1 target, with a 0.5% risk per trade for scale.
| Account | Daily limit (first day) | Maximum loss floor | Phase 1 target | 0.5% risk |
|---|---|---|---|---|
| Classic $10K | $500 | $9,000 | 8% ($800) | $50 |
| Classic $25K | $1,250 | $22,500 | 8% ($2,000) | $125 |
| Classic $50K | $2,500 | $45,000 | 8% ($4,000) | $250 |
| Classic $100K | $5,000 | $90,000 | 8% ($8,000) | $500 |
| Direct $10K | $400 | $9,400 | 10% ($1,000) | $50 |
| Direct $25K | $1,000 | $23,500 | 10% ($2,500) | $125 |
| Direct $50K | $2,000 | $47,000 | 10% ($5,000) | $250 |
| Direct $100K | $4,000 | $94,000 | 10% ($10,000) | $500 |
The daily limit is measured on equity and counts open positions. Reaching a limit ends the account, and there is no warning stage. Overnight and weekend holding are allowed, with holding costs, and news trading is allowed, so any position held through an event is exposed to the move. There is no time limit on a phase, which is why a plan can wait for its setups.
For a Direct $25,000 account, the same $125 risk is a tenth of the $1,000 daily limit, so eight full losses reach it, and 12 losses reach the $1,500 of room above the $23,500 floor. The sizing does not change between routes; the number of losses you can absorb does. The daily loss and maximum loss lesson shows how the two limits combine, and the rules page has the current wording.
Common mistakes
- Sizing to the target instead of the limits. Starting from "I need $2,000" produces larger trades than starting from "I can lose $125".
- Forgetting floating loss. Open trades count towards the daily limit before they are closed.
- Treating the daily limit as a fixed dollar figure. It is worked out afresh each day from that day's starting equity.
- Trying to finish in the minimum 3 days. Nothing in the rules asks for it, and rushing tends to raise the risk you take each day.
- Raising size after a winning run. A larger trade makes the next loss a larger share of the room you have left.
A longer list, with the arithmetic for each, is in the guide to common prop firm challenge mistakes.
Questions traders ask
How long does it take to pass a prop firm challenge?
There is no fixed answer. CMC Funded has no time limit, and the only timing rule is 3 trading days per phase. How long you take depends on your risk per trade, how often your setups appear and how they perform. A smaller risk per trade means more trades are needed to reach the target.
Can you pass a challenge by risking more on each trade?
You can reach the target in fewer trades, and you also reach a loss limit in fewer losses. At 2% risk on $25,000, a trade risks $500, so three losses in a day use $1,500 and end a Classic account. The size that suits your plan is the one you can lose repeatedly without changing behaviour.
Do you need a different strategy for a prop firm challenge?
Not a different strategy, but a different risk plan. A strategy that works on a personal account may produce losing runs that a daily limit and a fixed floor cannot absorb. Test your own strategy against the limits first, using a paper trading period, and size it to survive the worst run you have recorded.
What happens if you fail a challenge?
The attempt ends when a loss limit is reached. Because the account is simulated, the loss is not a debt, and the fee is the cost of the attempt. Use your journal to find what produced the loss, and check the rules page before you plan another attempt.
Next steps
Work through the how a challenge works lesson, then size a trade for your account with the position size calculator. Read the limits for your route on the rules page and see how the phases fit together on the how it works page.
You can compare the Classic and Direct routes on the challenges page.