The 1 Phase Challenge is designed to test your ability to achieve profits while maintaining strict risk management. By following the rules and meeting the objectives below, you can transition directly to a funded account.
1. Daily Drawdown Limit
The daily drawdown is calculated at 3% of your account’s initial balance.
At 5 PM EST, the system checks your starting day balance and equity. The higher of the two is used to apply the daily drawdown limit, but the percentage is always based on the initial balance only.
This ensures that your account remains protected while still allowing room for growth.
Example:
Initial Balance: $100,000 → Daily Drawdown = $3,000
If your balance at 5 PM EST is $100,000 and your equity is $105,000:
Drawdown limit applied = $105,000 – $3,000 = $102,000
Minimum equity allowed that day = $102,000
If your equity falls below this threshold, your account will be considered failed and trading will no longer be permitted.
2. Maximum Loss Limit (Trailing)
The maximum loss limit is set at 6% of your starting balance and functions as a trailing drawdown.
It moves upward as profits increase.
Once your balance grows by 6% above the start, the drawdown locks at the original balance and no longer increases.
Important Notes:
The drawdown updates only after closing a profitable trade.
Once locked, the maximum loss is fixed at the starting balance.
Example Without Growth:
Starting balance: $10,000
Max loss: $600
Dropping below $9,400 = failed
Example With Growth (After Locking):
Balance grows to $12,000 → Max loss = $2,000
If balance then falls to $9,800 = failed (locked at $10,000)
3. Profit Target
To pass the challenge, you must achieve a 8% profit on your account size.
Account Size | Profit Target |
$5,000 | $400 |
$10,000 | $8,000 |
$25,000 | $2,000 |
$50,000 | $4,000 |
$100,000 | $8,000 |
$200,000 | $16,000 |
4. Minimum Profitable Days
You must achieve at least 3 separate profitable days to complete the challenge.
Each profitable day must have a minimum profit of 0.5% of your initial balance for that day.
Profitability is determined based on End-of-Day (EOD) equity to EOD equity, meaning that the calculation does not depend on when trades were opened or closed. Instead, it reflects the change in equity (EOD to EOD) for each trading day.
These profitable days may be consecutive or spread out over the course of the challenge.
5. Consistency Rule
The consistency rule applies only in the funded stage to ensure profits are achieved through balanced trading rather than a single high-risk day. For full details, see the article Consistency Rule Explained – 1 Phase.
Summary Table
Rule / Objective | Requirement |
Daily Loss Limit | 3% of starting day’s balance or equity (whichever is higher) |
Max Loss (Trailing) | 6% of starting balance, trails upward, locks after 6% gain |
Profit Target | 8% of account size |
Minimum Profitable Days | 3 days of 0.5% |
Consistency Rule | 30% consistency applies in funded stage only |