Proprietary trading firms (prop firms) provide traders with the opportunity to trade with significant capital in exchange for a profit split. To ensure traders are skilled and consistent, many prop firms use an evaluation process, with the 2-Step Challenge being one of the most popular methods. This article explores how traders can maximize their trading potential with the best prop firms offering a 2-Step Challenge, detailing the benefits, top firms, and key strategies for success.

What is a 2-Step Challenge?

A 2-Step Challenge is a structured evaluation process used by prop firms to assess traders before granting them a funded account. It consists of two phases:

Phase 1: Initial Evaluation

Traders must reach a profit target (typically 8-10%) within a set time period (e.g., 30 days).
They must follow risk management rules, such as maximum drawdowns and daily loss limits.
Traders can use different strategies as long as they comply with the firm’s rules.

Phase 2: Verification

The second phase has a lower profit target (typically 5%) but enforces the same risk management rules.
Some firms extend the trading period for this phase to ensure consistency.
Upon passing, traders receive a funded account where they can trade and earn profits.

Benefits of a 2-Step Challenge

1. Higher Funding Opportunities

The best prop firms provide traders with access to large capital, ranging from $10,000 to $1,000,000, enabling higher profit potential.

2. Encourages Consistency

The two-step process ensures traders demonstrate consistent profitability and risk management skills, making them better long-term traders.

3. Lower Costs Compared to One-Step Challenges

Since the evaluation is split into two steps, traders often pay lower fees compared to instant funding programs, making it more affordable.

4. Builds Risk Management Discipline

By enforcing strict drawdown limits, the challenge helps traders develop better risk management strategies, increasing their success rate in the market.

Best Prop Firms Offering a 2-Step Challenge

Many leading prop firms use the 2-Step Challenge as their primary evaluation method. Here are the top firms offering this challenge:

1. FTMO

Profit Target: 10% (Phase 1), 5% (Phase 2)
Trading Period: 30 days (Phase 1), 60 days (Phase 2)
Maximum Drawdown: 10%
Profit Split: Up to 90%
Key Feature: Scaling plan for increasing capital

2. The Funded Trader

Profit Target: 10% (Phase 1), 5% (Phase 2)
Trading Period: 35 days (Phase 1), 60 days (Phase 2)
Maximum Drawdown: 12%
Profit Split: Up to 90%
Key Feature: Allows high-frequency trading and EA strategies

3. True Forex Funds

Profit Target: 8% (Phase 1), 5% (Phase 2)
Trading Period: 30 days (Phase 1), 60 days (Phase 2)
Maximum Drawdown: 10%
Profit Split: Up to 85%
Key Feature: Weekly payouts for funded traders

4. E8 Funding

Profit Target: 8% (Phase 1), 5% (Phase 2)
Trading Period: 30 days (Phase 1), 60 days (Phase 2)
Maximum Drawdown: 10%
Profit Split: Up to 80%
Key Feature: No minimum trading days required

5. Maverick Trading

Profit Target: 10% (Phase 1), 5% (Phase 2)
Trading Period: Flexible timeline
Maximum Drawdown: 8%
Profit Split: Up to 90%
Key Feature: Personalized coaching and training support

Strategies to Pass a 2-Step Challenge Successfully

1. Develop a Strong Trading Plan

Define clear entry and exit strategies.
Set realistic profit targets and risk-reward ratios.

2. Use Proper Risk Management

Never risk more than 1-2% per trade.
Use stop-loss orders to protect your capital.
Avoid overleveraging to prevent large drawdowns.

3. Trade High-Probability Setups

Focus on major currency pairs and highly liquid assets.
Use technical indicators like RSI, moving averages, and Fibonacci levels.
Avoid trading during high-impact news events unless experienced.

4. Maintain Psychological Discipline

Stick to your trading strategy and avoid revenge trading.
Take breaks and avoid emotional decisions.
Keep a trading journal to analyze mistakes and improve performance.

5. Utilize Demo Accounts for Practice

Before starting the challenge, practice with a demo account to refine your strategy.
Test different market conditions to build confidence.

Conclusion

The 2-Step Challenge is a highly effective method used by the best prop firms to identify skilled traders and provide them with capital. Firms like FTMO, The Funded Trader, and True Forex Funds offer excellent opportunities for traders to prove their consistency and secure funding.

By following proper risk management, developing a solid strategy, and maintaining psychological discipline, traders can maximize their chances of passing the evaluation and achieving long-term success in the forex market.

Maximizing Your Trading Potential with the Best Prop Firms Using a 2-Step Challenge