A two-phase evaluation with separate profit targets in each phase, requiring consistent performance to earn funding.
A two-step (or 2-phase) challenge requires traders to pass two consecutive evaluation phases before receiving a funded account.
Typical Structure
Phase 1 (Evaluation)
- Profit target: 8–10%
- Max drawdown: 8–10%
- Daily loss limit: 4–5%
- Minimum trading days: 5–10
Phase 2 (Verification)
- Profit target: 4–5% (lower than Phase 1)
- Same drawdown and daily loss rules
- Same minimum trading days
- Purpose: Verify that Phase 1 wasn't just luck
Why Two Phases?
The second phase serves as a consistency check. A trader who can hit 10% and then 5% in separate periods is more likely to be genuinely skilled than someone who got lucky once.
Pros
- Lower per-phase targets: 8% + 5% feels more achievable than one big target
- Better profit splits: Two-step firms often offer 80–90% from the start
- More forgiving drawdown: Total drawdown limits tend to be higher (8–10%)
Cons
- Takes longer: Two phases with minimum trading days can take 2–6 weeks
- Double the risk of failure: You can pass Phase 1 and fail Phase 2
- Phase 2 pressure: Some traders struggle with verification after the relief of passing Phase 1
Popular Two-Step Firms
- FTMO (forex/futures/stocks)
- MyFundedFX (forex)
- FundedNext (forex)