Every trader who has ever looked at a prop firm ad has run the same math in their head. Pay a couple hundred dollars, prove it on an evaluation account, get handed fifty or a hundred thousand dollars to trade with none of it being personal savings on the line.
Sounds like the best deal in trading. Maybe it is.
It is also an $850 million industry now, up 45 percent in a single year, and most of the people paying into it have never seen the number that actually matters.
Not the pass rate everyone argues about in forums. The number underneath that one.
A back-end software vendor working with ten different firms pulled data on more than 300,000 accounts. Fourteen percent passed the challenge. Less than half of those ever saw a payout.
Run that math forward and the number left standing is close to 7 percent of everyone who ever paid a fee.
This report builds the full picture from there. The difference between a daily loss limit and a maximum drawdown. A static floor and a trailing floor are not remotely the same thing, and treating them as if they were is how accounts get closed by surprise. There's the 1990 behavioral finding that explains why an evaluation account gets blown up in ways a personal account rarely does. The year 80 to 100 firms disappeared. And an original simulation testing exactly how position sizing decides who passes, with zero edge assumed either way.
All of it below, with the exact page where each piece lives.
A Trading Habits Report
The Funded Account Report
What happens inside a prop firm evaluation, why most challenges end the way they do, and what the industry's own data says about drawdown, consistency, and who gets paid.
- Length 20 pages, with 10 original charts and a 20,000-run simulation
- Author TradingHabits.com
- Format PDF, delivered as an instant download right after checkout
- Covers Evaluation mechanics, drawdown structures, the consistency rule, published industry pass-rate data, and an original position-sizing simulation
No firm comparisons, no rankings, no recommendation to use or avoid any specific evaluation program. Two firms are named once, on one page, strictly as historical record of a 2024 industry event. Everything else is mechanics, published data, and the math.
What's Inside
20 Things This Report Says
- 01What happens mechanically inside an evaluation, step by step, before money changes hands.Page 4
- 02How this industry went from a rounding error to an estimated $850 million a year in roughly six years.Page 5
- 03The uncomfortable business-model math behind why a firm's incentive to see any one trader succeed is weaker than its marketing suggests.Page 6
- 04The difference between a daily loss limit and a maximum drawdown, and why treating them the same is how accounts get closed by surprise.Page 7
- 05Static drawdown floor versus trailing drawdown floor, and why growing an account does not always buy more room to be wrong.Page 8
- 06What the consistency rule caps, and why one lucky day can delay a payout even after the target is technically cleared.Page 9
- 07The data behind more than 300,000 prop trading accounts across ten firms, not marketing copy.Page 10
- 08The exact pass rate, the exact funded-to-payout rate, and the one combined number that actually matters.Page 10
- 09How firm-reported pass rates compare against that independent data, and why one widely cited figure deserves caution.Page 11
- 10The 1990 behavioral-finance study that explains why an evaluation account gets treated so differently from a personal one.Page 12
- 11The specific psychological pattern sitting behind most failed evaluations, named directly.Page 12
- 12What happened across the industry in 2024, when somewhere between 80 and 100 firms shut down inside a single year.Page 13
- 13A full hypothetical walkthrough of a $50,000 evaluation, day by day, near miss included.Page 14
- 14How this report built its own original simulation from scratch: a zero-edge account racing a profit target against a drawdown ceiling.Page 15
- 15The exact pass, bust, and timeout rates across four different position-sizing levels, computed directly for this report.Page 15
- 16Why the drawdown floor gets hit more often than the profit target, even with a perfectly fair, edge-free process.Page 15
- 17The full sizing curve, run with a zero-edge assumption and again with a small edge layered in.Page 16
- 18Why a genuine edge stops needing aggressive sizing well before the bust rate stops climbing.Page 16
- 19Why getting funded is not the finish line, and what the same data says about what happens next.Page 17
- 20A six-question framework built to be asked before the first fee gets paid, not after the third one.Page 18
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Behind The Report
The Year The Weakest Firms Didn't Survive
A Platform Decision With Industry-Wide Reach
In February 2024, MetaQuotes, the company behind the MT4 and MT5 platforms most retail-facing prop firms ran on, began revoking licenses from firms serving U.S. clients or lacking proper broker relationships. The shock rippled through a market that had built itself on that same platform for years.
Two of the most visible collapses followed within weeks of each other that May. Neither is named here as any kind of recommendation. Both are history now, not options on a menu.
What Was Left By Year End
By the close of 2024, somewhere between 80 and 100 firms had shut down, roughly 13 to 14 percent of the entire global count. The firms still standing tended to be the ones with solid broker relationships behind them, not the ones running on a rented platform license alone.
That is a fact about balance sheets, not trading skill, and it is a separate risk from anything about pass rates or drawdown rules. The full timeline, with sourcing, is in the report.
The Year The Weakest Firms Didn't Survive
A simplified rendering of the 2024 shakeout timeline, matching the sourced chart on page 13 of the report. Background only. The report itself covers the mechanics, the data, and the simulation.
Try It: Step Through The 2024 Shakeout
Same four points as the timeline above. Drag through them and watch a single platform decision in February turn into 80 to 100 firms gone, roughly 13 to 14 percent of the entire global count, by December.
Background only. Nothing on this page or in this report is a recommendation to use, avoid, sign up for, or pay any specific broker, proprietary trading firm, or funded-account program.
Common Questions
What actually triggered the 2024 prop firm shakeout?
A platform decision, not a market crash. In February 2024, MetaQuotes, the company behind the MT4 and MT5 platforms most retail-facing prop firms ran on, began revoking licenses from firms serving U.S. clients or lacking proper broker relationships.
How many firms actually shut down?
Somewhere between 80 and 100 by the end of 2024, roughly 13 to 14 percent of the entire global count.
Does surviving the shakeout mean a firm is more trustworthy?
The firms still standing tended to be the ones with solid broker relationships behind them, not the ones running on a rented platform license alone. That's a fact about balance sheets, not trading skill, and a separate risk from anything about pass rates or drawdown rules.