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Next: run your own odds
Put your win rate, payoff and risk into the challenge simulator and see how often the target or the floor comes first.
What is included
- What it is, in plain words
- The formula or mechanism, with exact arithmetic
- How it hits grid, martingale and DCA bots
- A check you can run before you switch a bot on
Who it is for
- People who run or plan to run a trading bot
- Anyone reading a backtest or a bot sales page
- Readers who want the numbers, not the pitch
- Not advice, and not a signal service
Key facts
- A challenge of this kind is an evaluation: reach a profit target before touching a loss limit, usually while meeting rules about trading days and daily losses.
- This page states no figures for any real firm. All numbers belong to a made-up firm with a +8 percent target and a -10 percent floor.
- In our made-up simulation a strategy with zero expectancy reached the target first in 55.2 percent of runs, and one with a 45 percent win rate and 1.5 to 1 payoff in 85.4 percent (approximation, 20,000 seeded runs, 31 Oct 2026).
- Reaching the target first is a matter of odds, not of effort. A bot with no edge still wins some runs by luck.
- The firm's terms change. Test against the version you will actually sign.
What a challenge is, in general
A challenge is a screening test run by a firm that lends or allocates capital. You trade an account under a set of conditions, and if you meet them, you move to the next stage. We do not state any real firm's conditions here because we have not saved a dated copy and they change. The usual pieces are described on the page about reading a prop firm's rules as numbers: a profit target, a daily loss limit, an overall loss limit, minimum trading days, and sometimes a consistency rule and automation rules.
Underneath, the target and the floor make a race. The balance moves up and down with each trade. It ends when it touches the target or the floor. This is the same problem as risk of ruin, with a finish line above as well as below.
A worked example you can reproduce
Take a made-up firm: target +8 percent, floor -10 percent. A made-up bot risks 1 percent per trade, and a winner pays 1.5 times what a loser costs (written 1.5R). Per trade the expectancy is win rate times 1.5 minus loss rate times 1. At a 40 percent win rate that is 0.00R, a coin with no edge once costs are included. At 45 percent it is 0.125R, and at 50 percent it is 0.25R. The expectancy guide shows the formula.
40 percent: 0.40 x 1.5 - 0.60 = 0.000R
45 percent: 0.45 x 1.5 - 0.55 = 0.125R
50 percent: 0.50 x 1.5 - 0.50 = 0.250R
We ran each case 20,000 times with a seeded random generator, so the result is the same every run. A run ends when the balance reaches +8 percent or falls to -10 percent, or after 300 trades.
| Win rate | Expectancy | Target first | Floor first | Avg trades to target |
|---|---|---|---|---|
| 40 percent | 0.000R | 55.2% | 44.6% | 53 |
| 45 percent | 0.125R | 85.4% | 14.5% | 44 |
| 50 percent | 0.250R | 96.8% | 3.2% | 31 |
Look at the first row. The strategy has no edge, yet it reached the target first in 55.2 percent of runs. That is the trap in any evaluation: the target is nearer than the floor, so a coin flip with these distances wins often. Passing one run says little about the strategy. It is also why a pass in one attempt is weak evidence of an edge, and why a bot with no edge that keeps paying for new attempts tends to lose money overall. Our fee maths page works through that cost with made-up fees.
What the simulation leaves out
- The daily limit. A day with several losses can end an attempt before the overall floor is near. See daily drawdown rules.
- Costs. Spread, commission and slippage reduce the payoff and raise the loss on every trade.
- Streaks and clustering. Real trades are not independent coin flips. A bot can lose in clusters when the market changes regime.
- Estimation error. A win rate from a backtest is a guess. A 45 percent backtest can be a 40 percent bot in live trading, and the table shows how much that gap is worth.
- Rule details. Minimum trading days, a consistency cap, news restrictions and automation rules can fail a bot that never touched a loss limit.
How bots meet a challenge
A bot is consistent in the wrong way: it takes every signal at the same size. That is useful, since the risk per trade is fixed and can be set below the limits. It is harmful when the bot scales up after losses, as a martingale does, because the size of the next loss is no longer 1 percent. The rules versus bot types page lists which designs clash with which rule.
How to run your own check
Write the firm's current target, floor and daily limit as numbers. Enter your own win rate, payoff and risk in the challenge simulator, then lower the win rate by five points to see how fragile the answer is. Compare the worst drawdown in your backtest with the floor using the drawdown calculator.
What this page does not tell you
It does not give the targets, limits, fees or phases of any real challenge, and it says nothing about whether any firm allows bots. Its numbers describe a made-up firm. We are not affiliated with any firm and this page is not a promise that any bot or trader will reach any target.
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FAQ
Frequently Asked Questions
What is a prop firm challenge?
It is an evaluation in which you trade an account under set rules and must reach a profit target without touching a loss limit. The details differ by firm, so read the current terms.
Does this page give the FTMO challenge rules?
No. We have no dated copy of any firm's rules, and they change. The numbers here belong to a made-up firm.
Why can a strategy with no edge still reach the target?
Because the target and floor are a race. In our made-up case the target was closer than the floor, so luck alone won more than half of the simulated runs.
Does a pass prove a bot has an edge?
No. One run is one sample. Many attempts and many trades are needed before a result says anything about the strategy.
Can a bot meet the profit target and still fail?
Yes. A bot can break a daily limit, a minimum trading days rule, a consistency rule or an automation rule while the overall result looks fine.
Are the numbers on this page real?
Example numbers are made up to show how the maths works, and the page says so. A figure only counts as exact when the page says it was calculated on a stated date. Nothing you enter in a calculator leaves your browser.
Can I use this to decide whether to run a bot?
It can show whether a bot's numbers hold together and how much an account can lose. It cannot say what the market will do, and it is not advice. Use it to ask better questions, then read the terms of your own broker or exchange.
Is this financial advice?
No. It is general education. The numbers are made up and real rules and results may differ.
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