2-Phase, 1-Phase or Instant Funding — Which Model Suits You?

The Three Main Models

Most prop firms offer one or more evaluation models. Understanding the differences is crucial before spending money on a challenge. Here's a summary:

• 2-Phase Challenge: The industry standard — two evaluation stages before funding
• 1-Phase Challenge: A single evaluation — faster but typically stricter
• Instant Funding: No evaluation at all — funded immediately, but with tighter rules and lower profit split

2-Phase Challenge — The Standard

This is the most common evaluation model in the prop trading industry. Firms like Topstep and Earn2Trade have popularized variations of this format.

How it works

1. Phase 1: Reach a profit target (typically 8-10%) within 30 calendar days
2. Phase 2: Reach a lower target (typically 4-5%) within 60 calendar days
3. Funded: You receive the funded account, trade with real rules, and request payouts

Rules (typical)

• Daily drawdown: 5%
• Max drawdown: 10%
• Minimum trading days: 5 per phase
• Profit split: 80-90%

Pros

• Most lenient rules of the three models
• Lower fee per dollar of funded capital
• Two phases mean more time and chances to prove yourself
• Higher profit split once funded

Cons

• Takes longer to get funded (2-4 months minimum)
• Two chances to fail = two gatekeepers
• Can feel like a grind for experienced traders

1-Phase Challenge — Speed & Simplicity

Gaining popularity for traders who prefer a faster path.

How it works

1. Single Phase: Reach a profit target (typically 8-10%) within 30-45 days
2. Funded: Pass once and you're funded

Rules (typical)

• Daily drawdown: 3-4% (tighter than 2-phase)
• Max drawdown: 6-8% (tighter than 2-phase)
• Minimum trading days: 5
• Profit split: 75-85%

Pros

• Only one hurdle to pass
• Faster time to funded (can be in 1-2 weeks)
• Simpler process — less room for Phase 2 burnout

Cons

• Tighter risk rules make it harder per trade
• Higher fee relative to 2-phase for similar account sizes
• Slightly lower profit split
• Less margin for error

Instant Funding — Skip the Evaluation

For traders who hate evaluations and want immediate access to a funded account.

How it works

1. Pay the fee: Higher than challenge fees (often 2-5x)
2. Get funded immediately: Start trading and earning from day one

Rules (typical)

• Daily drawdown: 3-5%
• Max drawdown: 5-8%
• Profit split: 50-70% (lower than challenge models)
• First payout: Often after reaching a profit threshold

Pros

• No evaluation stress — start earning immediately
• Good for proven traders who don't want to waste time on challenges
• No risk of "failing" a challenge

Cons

• Significantly higher upfront cost
• Lower profit split means less income per dollar traded
• Rules can still be very strict
• If you breach, you lose a much larger fee

Which Model is Right for You?

• New to prop trading? → Start with a 2-Phase Challenge. The rules are friendlier and the fee is lowest
• Experienced with consistent results? → 1-Phase Challenge gets you funded faster
• Already profitable and hate evaluations? → Instant Funding if you can afford the higher fee
• Tight budget? → 2-Phase Challenge with the smallest account size ($10K-$25K)

"The best model is the one that matches your skill level AND your financial situation. Don't buy instant funding because you're impatient — buy it because you're profitable."