Understanding the Pros and Cons of One Step and Two Step Evaluation in Prop Trading

 

Prop trading firms offer retail traders the opportunity to trade with company funds in exchange for a profit split. However, traders must first pass an evaluation process to prove their skills. Two popular evaluation models are the One Step Challenge Prop Firm and the 2 Step Evaluation process. Each approach has its advantages and challenges, catering to different trading styles and risk appetites.

This article explores the differences, benefits, and drawbacks of these models, helping traders choose the best fit for their trading journey.

What Is a One Step Challenge Prop Firm?

A One Step Challenge Prop Firm is a proprietary trading firm that requires traders to pass a single evaluation phase to qualify for funding. This model is designed to streamline the funding process and quickly identify profitable traders.

Key Features of a One Step Challenge:

• Only one evaluation phase before receiving funding.

• A set of profit targets and risk management rules.

• Typically faster access to trading capital.

• Often comes with lower fees compared to two-step models.

Pros of a One Step Challenge Prop Firm

1. Faster Funding Process – Traders can qualify quickly without having to pass multiple stages.

2. Lower Psychological Pressure – No need to repeat success across multiple phases.

3. Less Capital Required Upfront – Usually has lower fees since there is only one evaluation stage.

4. Better for Experienced Traders – More suitable for traders with confidence in their strategy.

Cons of a One Step Challenge Prop Firm

1. Stricter Risk Management Rules – Firms often enforce tighter rules to compensate for the shorter evaluation period.

2. Higher Profit Target – Since there’s only one phase, traders may need to achieve a higher return.

3. Limited Availability – Fewer prop firms offer this model compared to the two-step approach.

What Is a 2 Step Evaluation?

A 2 Step Evaluation is a more traditional method used by most prop trading firms. It requires traders to pass two separate phases before receiving funding. Each step typically has a different profit target and risk management structure.

Key Features of a 2 Step Evaluation:

• Traders must pass two separate evaluation phases.

• Usually more lenient trading conditions in terms of drawdown.

• Firms may offer larger profit splits upon successful completion.

• Requires more patience and consistency to pass both phases.

Pros of a 2 Step Evaluation

1. More Structured Approach – The two-step model allows traders to prove consistency over a longer period.

2. More Risk Tolerance – Often provides higher drawdown limits, giving traders more flexibility.

3. Higher Success Rate in Phase 1 – Lower profit targets make it easier to progress.

4. Better for Less Experienced Traders – Offers time to refine strategies over two phases.

Cons of a 2 Step Evaluation

1. Longer Process to Get Funded – Traders must complete two phases, making it a slower route to capital.

2. Higher Overall Fees – Since traders must pay for both phases, costs can add up.

3. More Psychological Pressure – Maintaining performance over two phases increases stress levels.

Key Differences Between One Step and Two Step Evaluations

Feature	One Step Challenge	Two Step Evaluation
Number of Phases	1	2
Time to Get Funded	Faster	Slower
Risk Management	Stricter	More lenient
Profit Targets	Higher	Lower per phase
Psychological Pressure	Lower	Higher
Ideal for	Experienced Traders	Beginners & Consistent Traders

Which Model is Best for You?

Choosing between a One Step Challenge Prop Firm and a 2 Step Evaluation depends on your trading experience, strategy, and risk tolerance.

Choose a One Step Challenge If:

• You want to get funded quickly.

• You are confident in your trading strategy and risk management skills.

• You can handle higher profit targets in a single phase.

• You prefer less psychological pressure from multiple evaluations.

Choose a Two Step Evaluation If:

• You prefer a structured evaluation process with more time to prove your skills.

• You need higher drawdown limits to manage risk more effectively.

• You want lower per-phase profit targets, making it easier to qualify.

• You are comfortable with a longer path to funding.

Final Thoughts

Both One Step Challenge Prop Firms and 2 Step Evaluations offer unique advantages and challenges. The best choice depends on your trading goals, risk management style, and experience level. If you seek a fast-track approach, a One Step Challenge is ideal. However, if you prefer a gradual and structured method, a Two Step Evaluation may be the better option.