Glossary · Evaluations
Two-step challenge
- Also called
- 2-step challenge
- verification phase
- phase 2
- two-phase evaluation
What it means
In a prop firm, the two-step challenge is the classic structure popularized by the early forex prop firms. Phase 1 (often called the challenge) carries the larger profit target; phase 2 (often called verification) repeats the test with a smaller target and the same loss limits. Only after both does the trader receive a simulated funded account.
The second phase exists to filter out traders who passed phase 1 on one lucky run. It also gives the firm a second, cheaper data point on the trader's behavior before payout liability begins. Some firms refund the fee with the first payout to offset the extra friction.
Phase 2 is sometimes called the verification phase, phase two, or the second step. Pick one name and use it everywhere the trader will see it.
Related terms
Read these next.
One-step challenge
Evaluation
Profit target
Challenge fee
Pass rate
On your website
Where this shows up on a prop firm site.
Challenge pricing table
Rules pages
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