# How to pass a prop firm challenge: simulated odds by edge, risk per trade, drawdown type and consistency rule - specification

Specification written and **frozen 2026-10-14 (approved by the owner the same day, draft 1 unchanged)**, before any simulation of this study was run. Once frozen, any change is documented; bugs may be fixed.

## Why this study, and what was looked at before
- **Chosen by the owner** on 2026-10-14: an article targeting the search "how to pass a prop firm challenge" (variant A of three proposed; the scenarios and the consistency rule were proposed by us and are approved with this specification).
- The site already has "Prop Firm Challenge Pass Rate" (a coin-flip trader on generic futures rules: risk per trade, drawdown type, costs, a daily limit, fees, a historical replay) and the free simulator. This study does **not** repeat those tables. It adds: **traders with and without an edge**, **forex/CFD-style rules on $100,000 in two phases**, **a consistency rule**, and **the funded stage** (the odds of reaching a first payout after passing).
- Engine: `prop_core.js`, the simulator of the existing post, checked there against the gambler's-ruin formula. One addition, off by default: the consistency rule (below). No result of this study was looked at.

## The rules (generic; not any firm's rules)
All amounts are checked on the balance after each closed trade (as in `prop_core.js`: an "intraday" trailing drawdown trails the highest closed-trade balance; no rule sees a dip inside a trade). Trailing drawdowns stop trailing once the floor reaches the starting balance. A daily loss limit is measured from the balance at the start of the day.
- **F1, two-phase forex/CFD style:** $100,000. Phase 1: target +10% ($10,000), maximum loss 10% static ($90,000 floor), daily loss limit 5% ($5,000), at least 4 trading days. Phase 2 (a new account at $100,000): target +5% ($5,000), same limits. Passing F1 means passing phase 1 and then phase 2, simulated independently.
- **F2, one-phase strict:** $100,000, target +10%, maximum loss 6% trailing at the end of the day, daily loss limit 3%, at least 4 trading days.
- **U1, futures style, end-of-day trailing:** $50,000, target +$3,000, maximum loss $2,000 trailing at the end of the day, no daily limit, at least 5 trading days.
- **U2:** U1 with the drawdown trailing intraday (the highest closed-trade balance).
- **Consistency variants (F2-C and U1-C):** F2 and U1 plus a consistency rule: the target counts only when the best single day's profit is at most **40%** of the total profit. If the target is reached while the best day is above 40% of the total, the evaluation goes on (no failure for that alone) until the rule is met or a loss limit is hit.
- **Time:** no time limit; an evaluation still running after 260 trading days (about a year) is reported as "still open", separately from passes and failures. **Time-limit variant (F1-30):** F1 phase 1 with a limit of 30 trading days (expired counts as not passed).

## The traders
Every trade risks a fixed amount R and either wins 1.5 R or loses 1 R (results **after costs**, so the profiles are what a trader nets):
- **Negative edge:** 38% winners, -0.05 R a trade (what many traders net after costs).
- **No edge:** 40% winners, 0 R a trade.
- **Small edge:** 42% winners, +0.05 R a trade.
- **Good edge:** 46% winners, +0.15 R a trade.
- **Risk per trade:** 0.25%, 0.5%, 1% and 2% of the starting balance ($250, $500, $1,000, $2,000 on $100,000; $125, $250, $500, $1,000 on $50,000). Fixed for the whole evaluation (no scaling up or down).
- **3 trades a day**, every trading day.

## The funded stage
After a pass, a **funded account** with the same loss limits starting again from the starting balance; **the first payout** is reached when the profit equals **half the challenge target** (F1, F2: +$5,000; U1, U2: +$1,500) with at least 5 trading days, before a loss limit is hit (the same trader and risk; consistency rule in the C variants). Reported: the probability of a first payout given a pass, and of passing **and** reaching a first payout. Payout splits, scaling and later payouts are not modelled.

## Fees (illustrative)
The expected number of attempts per pass is 1 / pass probability (independent attempts); fees per pass are shown for **$100, $300 and $500** per attempt, with the formula, so readers can use their own price. Resets and refunds are not modelled.

## Simulation
- **100,000 simulated evaluations per cell**, seeds fixed (listed in the code). Cells: F1 (phase 1 and phase 2), F2, U1, U2, F2-C, U1-C, F1-30, each for 4 traders x 4 risks, and the funded stage for each.
- **Reported per cell:** pass probability (with its 95% range), failures by cause (maximum loss, daily limit), still open or expired, median trading days to pass; for C variants also how many passes were delayed by the consistency rule.

## Checks before any result is shown
1. **Theory:** a zero-edge 1:1 walk with a static drawdown and no other rule must match the gambler's-ruin probability D / (T + D) within the simulation error.
2. **Unchanged engine:** with the consistency rule off, `prop_core.js` must reproduce the published numbers of "Prop Firm Challenge Pass Rate" exactly (same seeds).
3. **Consistency rule by hand:** hand-made sequences (a target reached with one large day, then more days) pass exactly when the rule is met.
4. **Independent re-implementation:** a separate, plainly written simulator, compared with the engine on several cells (pass probabilities within the simulation error).

## Before the article
The numbers go to the owner first; one article, published only with the owner's agreement. Industry figures quoted in the article (pass rates published by firms or estimated by vendors) are cited with their sources and labelled as theirs, not ours.

## Reading the result
These are simulations of generic rules with fixed trade outcomes. Real trading has varying risk, streaks, news, psychology, execution and each firm's fine print. The study shows how the rules and the trader's edge shape the odds; it does not rate any firm and is not advice.