Evaluation Phase vs Funded Phase: Key Differences

Phase Overview

Most prop firms have a two-stage process: the evaluation phase (proving you can trade profitably) and the funded phase (actually trading firm capital). While they seem similar, the rules, psychology, and expectations differ significantly.

What Changes in the Rules?

1. Consistency Rules Often Relax or Disappear

During evaluation, many firms enforce strict consistency rules (30-50% max profit per day). Once funded, these often disappear completely or become much more lenient.

2. Profit Targets Disappear

Evaluation requires hitting specific profit targets ($3,000, $6,000, etc.). Once funded, there are no targets - you simply trade and keep your profit split. You're not racing to a goal anymore.

3. Drawdown Rules Usually Stay the Same

The drawdown limits typically remain consistent between eval and funded phases. If you had a $2,000 drawdown during eval, you'll usually have the same in funded. This is the firm's core risk management.

4. Minimum Trading Days Requirements

During eval, you might need 2-7 minimum trading days. Once funded, minimum trading days apply to payout requests - you must trade X days before each withdrawal.

Expectations & Psychology

Evaluation Phase Mindset

During evaluation, you're under pressure. You have profit targets, time pressure (often self-imposed), and the fear of failing and losing your entry fee. This leads many traders to:

• Overtrade to hit targets faster
• Take excessive risk on "must-win" trades
• Revenge trade after losses
• Ignore their trading plan in pursuit of the goal

Funded Phase Mindset

Once funded, the psychology shifts dramatically. You've "made it" - now the goal is to stay funded and generate income. This often leads to:

• More conservative trading (protecting the account)
• Better adherence to trading plans
• Less emotional decision-making
• Sustainable, long-term thinking

Payout Structure & Requirements

Evaluation Phase: No Payouts

You cannot withdraw money during evaluation. Your "profits" are simulated - they prove your ability but aren't real earnings. Once you pass, those evaluation profits disappear and you start fresh at your funded account balance.

Funded Phase: Regular Payouts

Once funded, you earn a percentage of your profits (typically 80-100%). Payout requirements vary:

Profit Split Scaling

Many firms offer profit split increases over time. You might start at 80%, then scale to 90% or even 100% after hitting milestones like:

• Total profits withdrawn ($5,000, $10,000, etc.)
• Time in funded status (6 months, 1 year)
• Number of successful payouts (5, 10, 20)

Tips for Success in Each Phase

Evaluation Phase Strategy

• Treat it like real money: Don't take risks you wouldn't take when funded
• Plan your consistency: Track daily profits and stay within limits from day one
• Don't rush: There's no time limit - take your time and trade your plan
• Document your trades: Review what worked to replicate in funded phase
• Use proper position sizing: Calculate risk per trade based on drawdown limits

Funded Phase Strategy

• Protect your funded status: Don't risk your account on revenge trades
• Scale slowly: Don't immediately max out position sizes - ease into it
• Maintain consistency: Even if rules relax, consistent profits are better than huge swings
• Meet payout requirements: Trade the minimum days before requesting withdrawals
• Reinvest wisely: Use payouts to fund additional accounts or save for security

Final Thoughts

The transition from evaluation to funded is one of the most critical moments in prop trading. The rules change, the psychology shifts, and the stakes become real. Success comes from understanding these differences and adapting your approach accordingly.

Remember: passing evaluation is just the beginning. Long-term success in funded accounts comes from sustainable trading, risk management, and treating your funded account like a business, not a lottery ticket.