# What is Profit target?

> A profit target is the gain, usually a percentage of starting balance, a trader must reach in a prop firm evaluation phase to pass it, without breaking any risk rule.

- Source: https://pipvalley.com/glossary/profit-target
- Publisher: PipValley - web design studio for prop trading firms
- Updated: 2026-10-03

In a prop firm, the profit target is the headline number of every evaluation. It is usually stated as a percentage of the starting simulated balance, and it is measured on closed balance at most firms, though some count equity. A two-step program sets one target per phase.

The target and the loss limits work as a pair. A high target with a tight maximum loss produces a low pass rate; a low target with a wide loss limit produces more simulated funded accounts and more payout liability. Firms tune the ratio between them rather than either number on its own.

Some programs, especially instant funding accounts, have no profit target at all and rely on payout rules instead.

## Why it matters

The profit target is the number traders compare first, and it shapes how many accounts reach your funded stage. State it as both a percentage and a dollar figure for each account size, say whether it is measured on balance or equity, and say whether open trades count. Ambiguity here becomes a dispute the moment someone narrowly misses.

## Example

On a $50,000 simulated account with an 8% target, the trader needs a closed balance of $54,000 to pass. Illustrative only.