Profit Target

The percentage gain a trader must hit to pass a challenge phase — typically 6-10% in phase 1 and 4-5% in phase 2.

Definition

A profit target is the minimum percentage gain a trader must achieve to pass a given challenge phase. The target is usually set as a percentage of the starting account balance: 8-10% in phase 1 of a two-step challenge, 4-5% in phase 2, and 3-4% in phase 3 where it exists. The target must be reached without breaching any drawdown rules along the way. Hitting the target early does not end the phase — most firms require a minimum number of trading days (typically 3-5) before a pass is certified.

Example

A trader on a $100K two-step challenge has an 8% phase 1 target ($8,000) with a 5-minimum-trading-day rule. They reach $8,200 on day 4. The phase does not end — they must trade at least one more day without breaching the drawdown. They hold the balance on day 5, the phase certifies, and phase 2 begins with a 4% target ($4,000 from the new balance of $108,200).

Why It Matters

Profit target percentages sound similar across firms but interact with drawdown rules to create very different effective difficulties. An 8% target with a 5% daily drawdown is far harder than an 8% target with a 10% daily drawdown — the per-trade risk has to be much smaller to avoid a single bad day wiping out progress. Traders comparing firms should look at target and drawdown together, not in isolation.

Related Terms

Evaluation Challenge
The paid skills test a trader must pass to earn a funded account — typically one, two, or three phases with profit targets and drawdown rules.
One-Step Challenge
A single-phase evaluation with one profit target — pass once and the account is funded, with no phase 2.
Two-Step Challenge
The most common evaluation model — two phases, each with its own profit target, usually 8% in phase 1 and 4-5% in phase 2.
Max Drawdown
The overall account loss cap — the total amount an account can drop before the firm closes it.
Daily Drawdown
A per-day loss limit that caps how much an account can lose in a single trading day, separate from the overall max drawdown.
← All termsLast updated 2026-04-21