Glossary
Phase
A phase is one stage of a prop firm evaluation, with its own profit target and usually the same loss limits.
What it means
A one step challenge has a single phase. A two step challenge has two: phase one usually has the higher profit target and phase two a lower one. Passing phase one moves the trader to a fresh phase two account, usually at no extra cost. Passing the final phase leads to identity checks and then a funded account.
Firms name phases differently, such as step one and step two, or evaluation and verification. Loss limits normally stay the same across phases, but minimum trading days, time limits and leverage can differ. Traders should read the rules for each phase on their own, because a rule that did not apply in phase one may apply in phase two.
Worked example
Illustrative numbers: on a $100,000 two step challenge, phase one needs $8,000 of profit and phase two needs $5,000, both within a $10,000 maximum drawdown. A trader who reaches $108,000 in phase one receives a new $100,000 account for phase two and starts again from zero profit.
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