Two-Phase Evaluation
A two-phase evaluation is a prop firm challenge model requiring traders to pass two sequential stages with distinct profit targets before receiving a funded account.
What it means in practice
A two-phase evaluation is the standard challenge format used by most proprietary trading firms. Traders must pass two consecutive stages — typically called Phase 1 and Phase 2 — each with its own profit target, drawdown limits, and time constraints. Only after clearing both phases does the trader receive a funded account.
Phase 1 usually sets a higher profit target (often 8-10% of account balance) to test whether the trader can generate consistent returns. Phase 2 lowers the target (typically 4-5%) to verify that the trader can maintain discipline and risk management over a second period. Both phases enforce maximum daily loss limits and overall drawdown caps.
From an affiliate perspective, the two-phase model creates a longer conversion funnel. The challenge fee is paid upfront, but trader drop-off between phases creates natural attrition. This affects how affiliates think about traffic quality — sending traders who can actually pass both phases strengthens the affiliate's reputation and often unlocks higher performance tiers or recurring commissions for repeat purchases.
Some firms also offer reset fees for traders who fail, creating additional monetization touchpoints that affiliates can earn commissions on. The two-phase model remains dominant because it balances risk management with trader accessibility.
How Two-Phase Evaluation works across industries
See how two-phase evaluation is applied in the verticals Track360 supports, from qualification logic and payout structure to the operational context behind each model.
How Track360 handles this
Track360 supports tracking across both phases of a two-phase evaluation, allowing operators to attribute challenge purchases, phase completions, and funded account conversions back to the referring affiliate. Commission logic can be configured to pay on initial purchase, phase completion, or funded status.
Frequently Asked Questions
Common questions about two-phase evaluation, how it works in affiliate programs, and where it shows up across Track360's supported verticals.
A two-phase evaluation is a challenge format where traders must pass two sequential stages with different profit targets and risk rules before receiving a funded account. Phase 1 typically requires a higher profit target (8-10%), while Phase 2 requires a lower target (4-5%) to confirm consistency.
Related Terms
Evaluation Phase
An evaluation phase is a structured assessment period in prop trading where traders must meet defined profit targets and risk management rules within a set timeframe to qualify for a funded trading account.
Funded Account
A trading account provided by a proprietary trading firm to a trader who has passed an evaluation challenge, allowing them to trade with the firm capital under defined risk rules.
Challenge Fee
A challenge fee is the payment a trader makes to enter a prop firm evaluation challenge, often serving as the basis for affiliate commission calculations in prop trading programs.
Profit Target
A profit target is the percentage gain a trader must achieve during a prop firm evaluation phase to qualify for a funded account.
Daily Loss Limit
A daily loss limit is the maximum amount a trader can lose in a single trading day before their account is suspended or failed in a prop firm evaluation.
Drawdown
Drawdown is the maximum loss a trader is allowed to incur -- either in a single day or cumulatively -- before their challenge or funded account is terminated by the prop trading firm.
Challenge Pass Rate
Challenge pass rate is the percentage of traders who successfully complete a prop firm evaluation and receive a funded account.
Scaling Plan
A scaling plan is a structured program where funded traders receive progressively larger account balances based on consistent performance, affecting long-term affiliate value calculations.
Continue Learning
Free structured courses that cover this topic and more.
Building a Prop Trading Partner Program
Challenge-based payout models, coupon code tracking, repeat purchase attribution, and first-or-last click rules. How to structure a partner program around the prop trading purchase funnel.
Scaling Prop Trading Affiliate Programs
Multi-tier partner networks, payout optimization, fraud prevention, and influencer recruitment strategies for prop firms growing beyond 50 affiliates.
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