One-step challenge prop firms provide traders with a simpler way to pass the challenge and get access to funding accounts. Traders can easily pass this evaluation process which consists of a single phase with clear trading rules and criteria. Traders need to know the trading strategies to pass this evaluation process. Risk is the main factor that if traders control they can easily pass the evaluation process and continue to their funded account for a longer period. If you are a beginner and want to join prop trading then let’s see in detail how one-step evaluation prop firms work and how traders can pass this challenge with minimal risk.
What are One-Step Evaluation Prop Firms?
Firms first take an evaluation process to decide which traders will get access to their funding accounts. Traders must meet a profit target while following drawdown limits, daily loss limits, and other restrictions. Unlike two-step challenges, which require multiple phases of verification, a one-step challenge allows traders to qualify in a single phase. This challenge consists of different profit criteria that traders have to achieve to pass this evaluation process. One-step challenge prop firms have just a single phase that traders have to pass.
Common Rules in a One-Step Challenge
To pass the challenge with minimal risk, traders must balance profitability with strong risk management. One-step challenge prop firms apply different trading rules like:
- The profit target that traders have to achieve typically ranges from 8% to 10% of the starting balance.
- Maximum drawdown is usually around 10% which means the trader cannot lose more than 10% of the account balance.
- Daily loss limit that is often set at 5% of the account balance.
- Trading period as some firms require traders to complete the challenge within 30 to 60 days while others have no time limit.
- Leverage can vary but most firms provide leverage ranging from 1:10 to 1:100.
- Trading restrictions that some firms prohibit certain strategies like martingale, high-frequency trading, or news trading.
Step-by-Step Strategy to Pass a One-Step Challenge with Minimal Risk
Choose the Right Prop Firm
Different best prop firms have different challenge rules, spreads, and commission structures. When you choose a firm with favorable conditions then it can make passing the challenge easier. When choosing a firm you need to consider:
- Realistic profit targets and drawdown limits and Avoid firms with extremely high-profit targets or restrictive drawdowns.
- Low spreads and commissions as high trading costs can directly affect profits and make the challenge more difficult.
- Flexible trading rules because some firms allow the use of Expert Advisors (EAs) or hedging which can be advantageous.
- Time limitations if you need more time to trade conservatively then choose a firm with no time constraints.
Develop a Conservative Trading Plan
A trading plan is important for passing the challenge with minimal risk. Your plan should include:
- Entry and exit criteria that define when to enter and exit trades based on your strategy.
- Risk per trade and limit your risk to 0.5%-1% of the account balance per trade.
- Trading sessions focus on trading during high-liquidity sessions like London and New York sessions.
- Risk-to-reward ratio (RRR). Aim for at least a 1:2 or 1:3 risk-to-reward ratio to ensure that winning trades compensate for losses.
Master Risk Management
Risk management is also an important part of passing the challenge without unnecessary losses. Consider the following principles:
Position Sizing
Use proper position sizing to prevent excessive risk. A common formula is Position Size = (Risk per Trade / Stop Loss) x Account Balance For example, if you risk 1% on a $10,000 account with a 20-pip stop loss then your position size should be adjusted accordingly.
Stop-Loss Placement
Never trade without a stop-loss. Ensure your stop-loss is placed at a logical level based on technical analysis rather than a fixed number of pips.
Avoid Overleveraging
Leverage can affect your profit but also increase losses. Use leverage wisely and avoid full-margin trades.
Set a Daily Loss Limit
If the challenge allows a 5% daily loss limit then set a personal limit of 2%-3% to stay within safe boundaries.
Choose the Right Trading Strategy
Not all strategies are suitable for passing a prop firm challenge. The best strategies minimize drawdowns while maximizing consistent profits.
Trend Following
Identify strong trends using moving averages, trendlines, or the Average Directional Index (ADX). Enter trades in the direction of the trend with a favorable risk-to-reward ratio.
Breakout Trading
Trade breakouts of key levels such as support and resistance zones. Use confirmation signals like volume or retests to validate the breakout.
Mean Reversion
This strategy works well in ranging markets. Look for overbought/oversold conditions using indicators like RSI or Bollinger Bands.
Scalping (If Allowed)
Scalping is the process of making small but quick trades to capture minor price movements. However, it requires a prop firm with tight spreads and low commissions.
