Prop Challenge Types: 1-Step vs 2-Step vs Instant Funding
Prop challenges come as 1-step, 2-step, or instant funding. This neutral comparison breaks down the profit targets, drawdown, and fee character of each — and which trader each tends to suit — plus what to verify before you pay.
In short — prop challenges broadly split into 2-step, 1-step, and instant funding. As a rule of thumb, fewer stages means a higher fee and tighter rules. There's no "best" type — you match it to your style and risk tolerance. The specific rules are always defined by that firm's official docs.
Why type comes first
In prop, the rules are the gate, not the profit. And how strict the rules are depends heavily on the challenge type. The same “$100k account” has completely different targets, drawdown, and fees depending on whether it’s 1-step, 2-step, or instant. Pay the fee without knowing the type and you can get boxed into rules that don’t fit your style.
The three types compared
| 2-step | 1-step | Instant funding | |
|---|---|---|---|
| Evaluation stages | 2 (phase 1 + 2) | 1 | None (account straight away) |
| Profit target | Per phase (e.g. 8% + 5%) | Once (e.g. 8–10%) | None / low |
| Rule strictness | Relatively relaxed | Medium–tight | Tightest |
| Fee character | Lower | Medium | Higher |
| Time to funded | Long | Medium | Immediate |
| Beginner fit | Fine for practice & proof | Medium | Low (for experienced) |
The figures above (8%, 5%, etc.) are illustrative examples, not any firm's actual values. Real targets, drawdown, and durations differ by firm.
① 2-step — the common standard
You must pass both stages to get funded.
- Phase 1 — a relatively high profit target. It asks: “can you trade?”
- Phase 2 — a lower profit target with the same loss rules. It asks: “can you stay disciplined?”
Because the check is split across two stages, each stage’s rules are often more forgiving than a 1-step, and the fee tends to be lower. It takes longer, but it’s a solid way to prove discipline while building it — which is why it’s often chosen for practice.
② 1-step — faster but tighter
A single evaluation. Passing is quicker, but you must prove skill and discipline in one go, so the drawdown rules (especially trailing) are often stricter. The trap is brushing the loss limits while rushing to the target.
③ Instant funding — no evaluation, but pricier
No evaluation stage — pay the fee and get a funded account immediately. It looks convenient, but the fee is higher and the drawdown is the tightest, with fussier payout terms (minimum trading days, consistency rules). It’s closer to a product for traders who already have rule-management experience.
What varies beyond the type
Even at the same type, these can completely change the difficulty. Verify each in the firm’s docs before you pay.
- Drawdown type — static or trailing? Trailing means the line follows you into profit. → Prop drawdown rules
- Calculation basis — balance-based or equity-based?
- Minimum trading days / consistency rule — how many days you must trade; whether a single day’s profit can exceed a share of the total.
- News / weekend-holding limits — whether trading around high-impact data is banned. → Economic calendar
- Payout — profit split, minimum payout, frequency.
Choosing your type (a framework)
Instead of a “right answer”, use self-check questions.
- Still building discipline → practice with a more forgiving 2-step.
- Style is set and you want faster turnover → 1-step (but check the trailing rule).
- Evaluations feel like a chore and you’re confident on rule management → instant funding (accept the cost and tighter rules).
Whichever you pick, rehearsing that rule environment in a demo before you pay is the cheapest validation. Merini’s demo opens with just an email, so you can practice the feel of hitting a target inside a loss limit → Open the free web demo
Disclaimer — this is a conceptual comparison of challenge types, not a recommendation of any firm or type. Real targets, drawdown, cost, and payout differ by firm and change often. Always check the company's official documentation.
Frequently asked questions
Which type is best for beginners?
Generally, a 2-step — split into stages with more forgiving rules — is regarded as a manageable way to prove discipline while learning. That’s a general characteristic of the type, not a recommendation of any firm. Weigh it against your own style and each firm’s actual rules.
Isn’t instant funding the easiest?
Only in that there’s no evaluation. In exchange the fee is higher and the drawdown/payout rules are the tightest, so without rule-management experience it can actually be harder.
Do I get the fee back?
Usually not, if you don’t pass. Some firms refund the fee on your first payout, but this varies by firm — check refund and reset terms before paying.
Can I practice with challenge rules set in advance?
In Merini’s demo you can set the account size and loss limits yourself to practice a challenge-like environment. It isn’t an actual evaluation account, and the rules are ones you input.
Related → What is prop trading · Prop drawdown rules · Preparing for a challenge · MT5 vs cTrader
This content is for information and education only and is not investment advice or solicitation. Trading conditions (hours, margin, fees, tick value, etc.) vary by exchange, broker, time, and daylight saving — always verify with your own broker before trading. Derivatives trading can result in losses exceeding your deposit.