Also known as:Prop Firm Challenge, Funding Challenge, Trader Evaluation, Prop Challenge
What is Evaluation Account?
An Evaluation Account is a simulated trading account sold by a proprietary trading firm as a skill test. A trader pays a one-time fee, then must hit a set profit target without breaking strict drawdown and risk rules to earn access to a firm-funded account that trades the firm's capital.
The evaluation is the front door of the modern prop-firm model. Instead of a broker collecting a deposit the trader can lose, a prop firm collects a challenge fee and runs the trader on a demo or matched-book environment. Pass, and the trader is promoted to a funded account and keeps a profit split — commonly 80% to 90% of what they generate. Fail a rule, and the account is over, though many firms sell a reset or offer a free retry.
Key takeaways
Traders pay a fee to prove skill, not to fund a tradable balance.
Low entry price relative to dangled capital drives high conversion.
Affiliates earn on the challenge fee, decoupled from the pass rate.
Daily loss limit and overall drawdown are what end most accounts.
Reset and retry sales create recurring affiliate revenue.
The economics for affiliates are what drive the boom. A $5,000 evaluation might cost the trader only $50, and a $100,000 challenge often runs $500 to $600. Because the entry price is low relative to the capital dangled, these offers convert far better than traditional broker sign-ups, and affiliates typically earn 10% to 20% of the challenge fee, sometimes recurring on resets. On a $600 challenge at a 15% payout, that is roughly $90 per sale.
Evaluations usually come in one or two phases. A one-phase model asks for a single profit target (say 8%) under a maximum drawdown; a two-phase model splits it into a challenge and a verification stage with a lower target in each. Both enforce a daily loss limit and an overall trailing or static drawdown that ends the account the instant it is breached.
How it works
A trader buys the evaluation, receives login credentials to a simulated account funded with virtual capital, and trades to a profit target while staying inside the firm's guardrails. The two rules that end most accounts are the maximum daily loss and the overall drawdown (either a static floor or a trailing one that follows the account's high-water mark). Break either and the evaluation fails instantly, regardless of open profit.
When a trader clears the target without a violation, the firm promotes them to a funded account. Payouts to the trader are a profit split on that funded account, released on a schedule (often bi-weekly or monthly) once a minimum profit and minimum trading-days threshold are met. The affiliate's commission, by contrast, is paid on the challenge-fee purchase, so partner revenue is decoupled from whether the trader ultimately passes.
1
Trader buys the challenge
The trader pays a one-time fee scaled to the account size, e.g. $50 for a $5,000 account or $550 for a $100,000 account.
2
Trade to the profit target
The trader must reach the target (often 8-10%) while never breaching the daily loss limit or overall drawdown.
3
Pass verification (if two-phase)
Two-phase firms require a second stage with a lower target to confirm consistency before funding.
4
Get the funded account
On passing, the firm issues a funded account and the trader keeps a profit split, commonly 80-90%.
5
Affiliate is paid on the fee
The partner earns a percentage of the challenge fee at purchase, independent of whether the trader later passes.
Why it matters for partnership: Evaluation accounts convert far better than broker deposits because the barrier is a $50-$600 fee, not risking a trading stake. Affiliates earn a high cut of that upfront fee (often 10-20%) and again on resets, but must set drawdown expectations clearly to keep refunds and churn down.
Real World Example
An affiliate promotes FTMO's $100,000 two-phase challenge, priced around $540, on a 10% commission. They drive 25 challenge purchases in a month and earn roughly $1,350. Because the commission is paid on the fee at checkout, the affiliate is credited whether or not each trader clears the 10% and 5% profit targets to reach a funded account.
Evaluation account vs traditional broker account
Aspect
Evaluation (prop) account
Live broker account
Trader pays
One-time challenge fee
Real deposit at risk
Capital traded
Firm's capital once funded
Trader's own money
Affiliate payout basis
% of challenge fee
CPA or spread revenue share
Barrier to entry
Low ($50-$600)
Higher (real capital)
Main churn driver
Failing drawdown rules
Losing deposited funds
Pro Tip
Publish a plain-language breakdown of the daily loss limit and trailing drawdown before the buy link; traders who understand the rules fail less, refund less, and are far more likely to buy a reset.
Common Pitfalls
Failing to explain the strict drawdown rules up front, which leads to rapid account failures, angry audiences, and a wave of chargeback and refund requests that can threaten your affiliate standing.
FAQ
Is an evaluation account real money?
No. The evaluation runs on a simulated account with virtual capital. Only after passing does the trader receive a funded account, and even then many firms trade on a demo or matched-book environment rather than live markets.
How much do affiliates earn per evaluation sale?
Commonly 10% to 20% of the challenge fee, so roughly $60 to $120 on a $600 challenge, with many firms also paying on resets. Rates vary by firm and volume, and none should be presented as guaranteed income.
What happens if a trader breaks a rule?
Breaching the daily loss limit or overall drawdown ends the evaluation immediately, even with open profit. The trader can usually buy a reset or start a new challenge to try again.
What is the difference between one-phase and two-phase challenges?
One-phase requires hitting a single profit target under the drawdown rules; two-phase splits it into a challenge and a verification stage with lower targets in each to confirm consistency.
Do I earn commission if the trader fails?
Yes. Affiliate commission is paid on the challenge-fee purchase, so your payout is credited at checkout regardless of whether the trader later passes or fails the evaluation.
Are prop firm evaluations regulated like brokers?
Mostly not. Selling a skills challenge is generally not regulated investment activity, so promote them honestly, avoid income guarantees, and check each firm's terms and jurisdiction before marketing.
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