Failed your prop firm challenge? You're not alone - over 80% of traders fail their first attempt, reporting stress and reduced confidence afterward. But failure is not the end. It's an opportunity to analyze mistakes, improve your strategy, and come back stronger. This complete guide shows you exactly what to do next: how to review your performance, whether to reset ($60-80) or buy new, how to improve your approach, and how to succeed on your next attempt.
You're In Good Company
80%+ of traders fail their first prop firm challenge. Many successful funded traders breached multiple times before passing. The difference between those who eventually succeed and those who give up is learning from mistakes and implementing improvements. This guide will help you become part of the 20% who pass.
Step 1: Analyze Your Performance Data
Before doing anything else, conduct a thorough analysis of what went wrong. Most prop firms provide detailed trading statistics - use them.
Key Metrics to Review:
- Win Rate: What percentage of trades were profitable? (Target: 40-60% depending on risk:reward)
- Risk:Reward Ratios: Were you getting 1:1, 1:2, or 1:3+? Low R:R means you need higher win rate
- Average Drawdown: How deep into losses did you go on average?
- Largest Single Loss: Did one trade breach you or was it accumulated?
- Daily P&L Pattern: Which days were profitable vs losing? Was there a pattern?
- Time of Day Performance: Did you perform better/worse at specific times?
- Number of Trades: Did you overtrade (30+ trades/day) or undertrade (1-2 trades/week)?
- Comparison to Backtest: How different were live results from your historical testing?
💡 Export Your Trading Journal
Download all trade history as CSV/Excel. Create pivot tables showing: Win rate by day of week, Average profit by hour of day, Performance by instrument (ES vs NQ vs Oil), Streak analysis (longest winning/losing streaks). These patterns reveal your strengths and weaknesses.
Step 2: Identify Your Specific Mistakes
Pinpoint exactly what caused the breach. Here are the most common mistakes and how to recognize them:
Mistake #1: Overleveraging
Signs: Single loss exceeded 2% of account, daily loss limit hit with just 1-3 trades, position sizes doubled after losses
Example: Trading 3 micro ES contracts on a $5K account ($15/point) instead of 1 contract ($5/point), causing $150 loss instead of $50 on a 10-point move
Why it happens: Pressure to hit profit targets quickly, overconfidence, trying to "make up" for previous loss
Solution: Strict Position Sizing
Use 0.5-1% risk per trade maximum. On $5K account, risk $25-$50 per trade. With 10-point stop on ES micro, that's 1 contract ($5/point × 10 points = $50 risk). Never increase size mid-evaluation. Lock position sizes in your platform settings if possible.
Mistake #2: Revenge Trading
Signs: Increased position size after losses, took trades outside your plan, rapid-fire trades to "win back" money
Example: Lost $100 on a bad trade, immediately entered 2x size to recover, lost $200 more, spiraled to daily limit breach
Why it happens: Emotional reaction to losses, ego refusing to accept being wrong, gambler's fallacy ("I'm due for a win")
Solution: Hard Stop Rules
Implement rule: After ANY loss, wait 15-30 minutes before next trade. After 2 consecutive losses, stop trading for the day regardless of profit target. Set platform alerts at 50% of daily loss limit ($125 on $250 limit) - if hit, evaluate if continuing is wise. Use accountability partner to review trades before entry.
Mistake #3: Ignoring Daily Loss Limits
Signs: Continued trading after hitting 75%+ of daily limit, "just one more trade" mentality, breached daily limit on multiple days
Example: Down $180 on $250 daily limit, took another trade hoping to recover, lost $100, breached account
Why it happens: Focus on profit target instead of risk management, belief you can "feel" next winner, not tracking P&L carefully
Solution: Strict Stop-Trading Rules
STOP at 75% of daily loss limit - no exceptions. On $250 limit, stop at -$187.50. Better to preserve account and try tomorrow than risk breach. Set hard stop-out in platform if available. Use visible P&L tracker (sticky note, separate monitor) so you always know current drawdown percentage.
Mistake #4: Trading During High Volatility
Signs: Breached during/after major news releases (NFP, FOMC, CPI), largest losses coincided with economic data
Example: Entered ES trade 5 minutes before NFP jobs data, normal 5-point stop hit in seconds due to 30-point spike
Why it happens: Unaware of news calendar, attracted to volatility thinking it means opportunity, overconfidence in stops
Solution: Avoid News Periods
No trading 15 minutes before to 30 minutes after major releases (NFP, FOMC, CPI, retail sales, GDP). Use ForexFactory or Investing.com calendars. Set daily alarms 30 minutes before high-impact events. Volatility creates opportunity but also risk - prioritize preservation during evaluation.
Mistake #5: Straying From Your Plan
Signs: Took setups you've never backtested, ignored your entry rules, traded instruments you don't normally trade
Example: Normally trade ES only, saw Gold moving and took trade despite no Gold experience, lost money
Why it happens: FOMO (fear of missing out), boredom during slow markets, pressure to find trades
Solution: Strict Strategy Adherence
Create written checklist for every trade: [ ] Setup matches backtested pattern, [ ] Risk is 0.5-1% of account, [ ] No major news in next hour, [ ] Market conditions match plan (trending vs ranging), [ ] NOT a revenge trade. Take screenshot of setup and review before entry. If it doesn't match ALL criteria, don't trade.
Step 3: Decide - Reset or Buy New Evaluation?
This is a critical financial decision. Here's how to choose:
| Scenario | Reset Cost | New Purchase Cost | Best Choice |
|---|---|---|---|
| Maven Trading $5K | $70 (typical reset) | $22 (new evaluation) | Buy New (save $48) |
| AquaFunded $5K | $70 | $23 | Buy New (save $47) |
| FundedNext $5K | $70 | $32 (Stellar Lite) | Buy New (save $38) |
| FTMO $10K | $70 | $155 | Reset (save $85) |
| FTMO $50K | $70 | $345 | Reset (save $275) |
| TopStep $50K | $70 | $165/month (new subscription) | Reset (cheaper) |
When to Choose Reset ($60-80):
- Your original evaluation was expensive ($155+)
- You breached near the end (day 25-30) very close to profit target
- You identified ONE specific fixable mistake (e.g., one bad news trade)
- Reset cost is significantly less than new purchase
- You're confident you can pass with minor adjustments
When to Buy New Evaluation:
- Original evaluation was cheap ($15-$40) - reset is 2-3x more expensive
- You breached early (day 1-10) far from profit target
- You need to completely rethink your strategy
- You want to try a different account size or firm
- You need more time to prepare (buying new gives you a fresh start)
⚠️ Reset Trap for Budget Firms
Maven ($22), Goat Funded ($17), AquaFunded ($23) - reset fees of $60-80 are 3x-4x more expensive than just buying new. Always compare costs before choosing reset. Some firms don't advertise discounted retries - ask support about second-attempt pricing.
Step 4: Take a Strategic Break (1-2 Weeks)
Over 80% of traders report feeling stressed and less confident after failing. Taking time helps:
- Clear your mind: Emotional trading caused your breach - break the cycle
- Gain perspective: You'll see mistakes more clearly with distance
- Reduce pressure: Desperation leads to forcing trades
- Study and improve: Use time to analyze data and refine strategy
- Rebuild confidence: Demo trading success during break restores belief
What to do during your break:
- Days 1-3: Complete break from trading - pursue hobbies, exercise, clear your head
- Days 4-7: Thorough analysis - review all trades, journal insights, identify patterns
- Days 8-14: Practice on demo with exact evaluation rules, smaller position sizes, stricter discipline
Step 5: Practice on Demo With Evaluation Rules
This is the most important step. Don't retry until you've PROVEN you can pass on demo.
Simulate Exact Evaluation Conditions
- Same profit targets ($500 on $5K = 10%)
- Same daily loss limits ($250 = 5%)
- Same max drawdown ($500 = 10%)
- Same minimum trading days (5-10 days)
- Track every metric daily
Pass Demo 3 Times Consecutively
Complete the full evaluation on demo without breaching. Do this 3 times in a row. This proves consistency, not luck. If you breach on attempt 4, start over - you need 3 consecutive passes before risking real money again.
Focus on NOT Breaching, Not Profit Target
Your goal during demo practice: Trade for 30 days without hitting daily loss limit or max drawdown even once. Profit target is secondary. If you can consistently avoid breaching, the profit target will come naturally.
Step 6: Implement These Improvements for Next Attempt
1. Reduce Position Sizes
Before: 1-2% risk per trade
After: 0.5-1% risk per trade (cut in half)
Impact: On $5K account, $25-$50 risk instead of $50-$100. Takes longer to hit profit target but dramatically reduces breach risk.
2. Set Stricter Stop-Losses
Before: 15-20 point stops on ES
After: 8-12 point stops with better entries
Impact: Forces higher-quality setups, reduces loss per trade, allows more trades before hitting limits.
3. Trade Fewer Times
Before: 10-20 trades per day looking for opportunities
After: 2-5 high-quality setups per day
Impact: Quality over quantity. Fewer trades = fewer chances to make mistakes, less commission cost, less emotional fatigue.
4. Implement Hard Stop Rules
Write these on paper and stick to your monitor:
- Stop at 75% of daily limit - no exceptions
- Stop after 2 consecutive losses - come back tomorrow
- No trading within 1 hour of any loss - prevents revenge trading
- Max 3 hours of trading per day - prevents fatigue mistakes
5. Start Slower
Don't try to hit 10% profit target in 5 days. Spread it over 15-20 days:
- Target $30-50 per day on $5K account instead of $100+
- Compound slowly: Day 1: +$40, Day 2: +$35, Day 3: +$50, etc.
- Celebrate small wins: Each green day is success, rebuilds confidence
Step 7: Retry With Improved Discipline
When you're ready to retry (after passing demo 3 times), approach it differently:
Before First Trade
- Review your written rules and mistakes from last attempt
- Confirm no major news in next 2 hours
- Set alerts at 50% and 75% of daily loss limit
- Promise yourself: "I will stop at 75% limit NO MATTER WHAT"
- Deep breath - this is a marathon, not a sprint
During Trading
- Check position size before EVERY trade - is it 0.5-1% risk?
- Screenshot setup before entry - does it match your plan?
- Track P&L on paper separate from platform - always know current drawdown
- After each trade (win or lose), 5-minute break - walk around, drink water
- If any doubt about next trade - skip it, there's always tomorrow
End of Day
- Journal: What went well? What could improve?
- Calculate: Current profit, days remaining, average needed per day
- If green day: Celebrate - you're on track
- If red day but within rules: Still a win - you didn't breach
- Plan tomorrow: Which sessions to trade, key levels to watch
Alternative: Try a Different Firm
Sometimes the firm's rules don't match your style. Consider switching:
| Your Trading Style | Failed At | Try Instead | Why |
|---|---|---|---|
| Aggressive day trader | FTMO (5% daily limit) | Apex (no daily limits) | No daily loss restrictions, only max drawdown |
| Swing trader | TopStep (consistency rule) | IC Funded (unlimited time) | No time pressure, no consistency requirements |
| Part-time trader | FTMO (30-day time limit) | Blueberry Funded (instant) | No evaluation, immediate funding |
| Risk-averse trader | FTMO ($155 cost) | Maven ($22) or AquaFunded ($23) | Lower financial risk to practice |
Success Stories: Traders Who Failed Then Passed
Real Example #1: The Overleverager
Failed: Breached FTMO $50K on day 3 with single $1,800 loss (3.6% of account) using 5 ES contracts
Changes: Reduced to 1 ES contract per trade (0.8% risk), practiced on demo for 3 weeks, passed on second attempt in 24 days
Key Insight: "I realized hitting profit target in 10 days vs 25 days doesn't matter - both get you funded. Slower is safer."
Real Example #2: The Revenge Trader
Failed: TopStep $50K breached after revenge trading spiral - lost $150, doubled size to recover, lost $300 more, breached
Changes: Implemented "2 losses = done for day" rule, used accountability partner (texted before each trade after loss), took 2-week break
Key Insight: "Admitting I had an emotional problem, not a strategy problem, was crucial. The break helped reset my mindset."
Frequently Asked Questions
What should I do after failing a prop firm challenge?
After failing a prop firm challenge, follow these steps: (1) Analyze performance - review trading stats like win rate, risk-reward ratios, drawdowns, and compare to backtest data to identify gaps; (2) Identify mistakes - look for overleveraging, revenge trading, emotional decisions, or rule violations that caused the breach; (3) Decide reset vs retry - reset costs $60-80 and reinstates your account, new purchase costs your original evaluation fee ($22-$1,080 depending on firm); (4) Improve strategy - reduce position sizes to 0.5-1% risk, set stricter stops, avoid high-volatility news periods; (5) Take 1-2 week break - over 80% of traders fail first attempt and report stress/reduced confidence, taking time helps clear your mind; (6) Practice on demo - simulate exact evaluation rules for 10-20 days, only retry after passing demo 3 times without breaching; (7) Retry with discipline - start slower with small daily gains, focus on not breaching rather than hitting profit target quickly.
Should I reset or buy a new prop firm evaluation?
Choose reset or new purchase based on cost comparison and how close you were to passing: Reset ($60-80) makes sense if: Your original evaluation was expensive (FTMO $155+, reset is cheaper), you breached near the end (day 25-30) close to profit target, you identified one specific fixable mistake, reset cost is less than new evaluation fee. Buy new evaluation if: Original evaluation was cheap (Maven $22, AquaFunded $23, Goat Funded $17 - reset at $60-80 is 3x more expensive), you breached early (day 1-10) far from target, you need to completely rethink your strategy, you want to try a different account size or firm. Cost comparison: Maven $22 vs reset $70 = buy new (save $48), FTMO $345 vs reset $70 = reset (save $275). Some firms offer automatic 'Second Chance' feature allowing one restart from Phase 1 per challenge, while others offer discounted retries not advertised on their page - always ask support about retry options.
Why do most traders fail prop firm challenges?
Over 80% of traders fail their first prop firm challenge due to these common reasons: (1) Overleveraging - using 2-5% risk per trade instead of recommended 0.5-1%, causing single losses to exceed daily limits ($250 daily limit breached with one $300 loss); (2) Revenge trading - increasing position size after losses to 'win back' money, leading to emotional decisions and larger losses; (3) Ignoring daily loss limits - continuing to trade after hitting 50-75% of daily limit, hoping to recover instead of stopping for the day; (4) Poor risk management - no stop losses, moving stops further away, or risking too much on single trades; (5) Pressure to hit profit targets quickly - trying to reach 10% profit in 5 days instead of spreading over 15-20 days creates unnecessary risk; (6) Trading during high volatility - news releases (NFP, FOMC, CPI) create unpredictable moves exceeding normal stop losses; (7) Straying from proven strategy - taking setups outside your backtested plan because 'it looks good' leads to inconsistent results. The difference between passing and failing is usually discipline and patience, not strategy quality.
How long should I wait before retrying a prop firm challenge?
Wait 1-4 weeks before retrying a prop firm challenge depending on why you failed: Immediate retry (same day to 1 week) if: You breached due to one specific technical error (fat-finger trade, platform issue), your strategy is proven (passed other evaluations before), you have detailed review done and know exactly what went wrong. 1-2 week wait if: You breached due to emotional trading or revenge trading - need time to clear your mind and reduce stress (80% of traders report feeling less confident after failing), you need to adjust position sizes or risk parameters, you want to practice new rules on demo for 10-15 days. 2-4 week wait if: You breached multiple times in the same evaluation, your strategy needs fundamental changes, you're switching to a different firm with different rules, you need to rebuild trading capital to afford another attempt. Best practice: Use demo account during waiting period to practice exact evaluation rules for 10-20 trading days, and only retry after passing demo evaluation 3 consecutive times without breaching. Many successful traders don't pass on their first try - what matters is applying lessons from your previous attempt.
Can I get a refund if I fail a prop firm challenge?
No, prop firms do not offer refunds for failed evaluations in almost all cases. When you purchase a prop firm challenge, you're paying for: The opportunity to demonstrate your trading skills, Access to simulated trading environment and evaluation platform, Risk management systems and oversight, Potential future funding if you pass. The evaluation fee is non-refundable whether you pass or fail. However, there are ways to recover costs: (1) Refund on passing - most legitimate firms (FTMO, FundedNext, Apex, TopStep, AquaFunded, Maven) refund your evaluation fee with your first profit withdrawal if you pass, effectively making the challenge free; (2) Discounted retries - some firms offer 10-30% off for second attempts (not advertised, ask support); (3) Second chance features - FundedElite and some others offer automatic retry from Phase 1 if you breach; (4) Promotional credits - firms sometimes offer credits toward future evaluations during sales periods. Never trust a firm that promises refunds for failed attempts - this indicates they're not a serious evaluation program. The non-refundable nature incentivizes proper preparation before attempting the challenge.
Remember: Failure is Part of the Process
80%+ of traders fail their first attempt. The 20% who pass aren't more talented - they learned from mistakes, improved discipline, and tried again. You can do this.
Disclaimer: Trading involves substantial risk. Prop firm evaluations are challenging and designed to filter out unprepared traders. Only retry after thorough preparation and practice. This guide is for educational purposes and does not guarantee success in future attempts.