One-Step vs. Two-Step Challenges: Which is Better for Your Trading Goals?

Aspiring traders who do not have personal funds to make trades in the market usually opt for the One step challenge prop firm. These proprietary firms provide them with the capital they can use for trading. However, they must pass an evaluation to prove themselves eligible for this fund. 

This evaluation could be a single-step trial or a multi-step test. In this article, we shall discuss these two kinds of challenges, one-step and two-step, and decide which option is better for you.

Understanding the Challenge 

An evaluation challenge is a trial requiring traders to showcase their trading skills and generate a pre-decided profit within a set period. As the name specifies, the one-step challenge comprises a single evaluation phase that requires aspiring traders to meet the profit target within the set time limit while adhering to the risk management requirements.

On the other hand, the two-step challenge refers to a trial with two stages rather than one. The Phase one is to evaluate whether the trader can hit the profit target. The second phase ensures consistency in his actions and continued profit generation.

For both these types of challenges, there is a set period within which the trader has to showcase exceptional performance. However, as the one-step challenge consists of only a single phase, it is usually shorter than the two-step challenge. Hence, the trader can qualify for the one-step challenge faster than the two-step challenge. 

In addition, the one-step challenge is considered much more lenient than the two-step challenge. The former lets the aspiring trader play a more significant role in the market and take more risky shots, while the latter is more concerned with risk management. Both phases also require a certain level of consistency.

The profit generation target in the one-step challenge is quite low, typically around 8 to 10% of the amount in the demo account. On the other hand, the target in the two-step challenge is relatively high, mostly around 16 to 20% for both phases. However, it is necessary to understand that the latter requires profit generation over a more extended period than what the single-step challenge offers.

Drawdown limits are stricter in the one-step challenge than in the other one. This is mainly because there is no second phase to compensate for the loss that occurred in the first phase, which is a possibility in the two-step challenge.

If you are someone who can’t wait to get his hands on the funded account and start making trades in the real market, the one-step challenge is for you. However, if you want to access your trading skills gradually and utilise this evaluation as a self-assessment, the two-step challenge is what you need to opt for. It is more structured and gives the trader a better look into his skills. 

Most traders consider the cost associated with the challenge a significant concern. In terms of cost, the two-step challenge is cheaper than the one-step challenge. This is because the one-step challenge is quicker to complete and evaluate. It also gives quick access to the funded account faster, which explains its higher cost..

Last but not least, let’s talk about the profit split ratio. This ratio is higher and favours the traders in the one-step challenge. Usually, it is around 80 to 90% tilting towards the trader. Comparatively, in the two-step challenge, the split ratio starts by providing a lower margin to the trader and then gradually increases that amount, favoring that later.

Final Thoughts