Prop trading firms such as Pax Market Funds run evaluation challenges to protect their capital and to ensure they only fund skilled and disciplined traders. Imagine if a firm gave every applicant instant access to large trading accounts without testing – the majority would likely lose money quickly, which would make the business unsustainable. The evaluation phase solves this problem by acting as a filtering system.
During the challenge, traders must follow specific rules, like profit targets, maximum daily drawdowns, and overall risk limits. This helps the firm identify whether a trader can not only make profits but also manage losses responsibly. It’s not just about making big trades; it’s about proving consistency, emotional control, and risk discipline.
For traders, the challenge is also beneficial. It gives them the opportunity to practice with simulated capital under real market conditions without risking their personal money. Once they pass, they gain access to large funded accounts and can keep a significant share of the profits they generate.