Profit Target: The Percentage You Must Reach to Pass

Profit Target: The Number That Defines the Test

By PropTrader1 2 min read Published October 28, 2026

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A profit target is the percentage gain you must reach to pass a prop firm evaluation - the other half of the test, alongside the loss limits you must respect while reaching it. One-phase evaluations commonly ask 10%; two-phase evaluations ask around 8-10% in phase one and 5% in phase two.

Worked example: FTMO's 2-Step asks 10% then 5% (so €5,000 then €2,500 of trading on the $50,000 size); FundedNext's Stellar 2-Step asks 8% then 5% (help.fundednext.com, checked 28 October 2026); The 5%ers' High Stakes NEW rules ask 10% then 5% with an 8%-then-5% variant on Classic (checked 27 October 2026). Same shape, different burden.

How to read a target: compare it against the maximum drawdown, not against zero. A 10% target with a 10% static floor is a 1:1 risk-to-reward structure for the firm; a 10% target with 6% is a much harder exam. Some firms fold the target into an add-on (FundedNext sells a no-minimum-days option on smaller sizes).

The full comparison of targets and structures: prop firm profit targets; the gates around it: prop firm challenge.

Plain-language material on leveraged-trading risk is maintained by the ESMA investor corner.

Part of the rules & drawdown cluster and the full prop firm glossary.

Frequently Asked Questions

Why is a 50% drawdown harder to recover than a 10% one?

A 50% drawdown requires a 100% gain to recover, while a 10% drawdown only needs 11.1%. Recovery math is exponential. At 30% drawdown you need 42.9% to break even. This is why prop firms cap drawdown at 10-12% rather than higher percentages.

What is the 3-5-7 rule in forex?

The 3-5-7 rule suggests risking 1-3% per trade, keeping total open risk at 5% or less, and limiting single market exposure to 7%. It is a general risk guideline, not a prop firm rule, but following it naturally keeps you within most max drawdown limits.

What is a good maximum drawdown?

For prop firm trading, keeping your actual drawdown under 5% is excellent. Most firms allow 10-12%, but staying well below the limit demonstrates strong risk management and gives you a buffer for unexpected market events.

Is maximum drawdown calculated on balance or equity?

It depends on the firm and drawdown type. Static drawdown is typically calculated on starting balance. Trailing drawdown follows your highest equity. Some firms include floating losses in their calculation, making equity the relevant measure.

What happens when you breach maximum drawdown?

Breaching maximum drawdown results in immediate and permanent account closure. All positions are closed automatically, the challenge is terminated, and there is no refund or appeal. It is the final rule with no second chances.

What is the difference between daily drawdown and maximum drawdown?

Daily drawdown resets every day and limits your loss within a single session. Maximum drawdown is cumulative across the entire challenge or funded period. You can breach max drawdown through many small daily losses that accumulate over time.