Crypto prop trading gives you access to serious capital without putting your own savings on the line. But getting started can feel somewhat intimidating, more so if you are new to trading or unfamiliar with crypto.
Prop trading firms use a strict evaluation process to filter out the good traders, and you need to pass it to gain access to the capital on offer. The evaluation process often comes with progress bars, strict drawdown limits, and ticking clocks that even experienced traders find challenging. This quick guide explores how you could successfully pass it.
KEY TAKEAWAYS
➤ Crypto prop firms use strict evaluations with profit targets, drawdown limits, and time rules to select eligible traders.
➤ Failing evaluations is often psychological, not technical. Revenge trading and overtrading are two of the most common pitfalls.
➤ Consistent risk management, tiered stop losses, and reliable trading pairs can significantly improve your odds of passing.
➤ Crypto-native firms like Fondeo usually offer more flexible evaluations, larger scaling options, and better tools for crypto traders.
What are crypto prop firms?
Simply put, crypto prop firms provide traders with substantial capital (typically $10,000 to $2 million or even more). In exchange, the profits are shared between the trader and the firm. The bulk of the profit is given to the trader, which increases with subsequent successful time periods.
Here’s how it works: Let’s say the prop firm provides you with $10,000 capital, which you then use to go long on Bitcoin. Bitcoin’s price goes up by 10% when you book the profits. If the profit share is 90:10, 90% of the profit is yours, and 10% goes to the prop firm.
In this case, with a profit of $1,000, you earn $900, and the prop firm takes $100 for providing the initial capital that enables you to generate the profits.
However, for the prop firm to provide you with that capital, you need to earn their trust by passing their evaluation.
Prop firm evaluation: What you’re up against
Generally, most firms employ either a one-step or two-step process. You’re given a profit percentage target, such as 10-15%. During this evaluation process, you’re not just trying to make money — you’re walking a tight rope within these rules:
- Daily Loss Limits: Usually 3-5%of the account. Lose more than 5% in a day, and you can make no more trades.
- Maximum drawdown: There’s also a limit to how much you can go below your funding during the evaluation period. Usually it’s about 6-12%. Go below that, and your evaluation ends.
- Minimum trading days: Some crypto prop firms have requirements on the minimum number of days that you must trade.
- Time limits: Ultimately, you must achieve your required profit percentage within the specified timeframe.
Comparison of prop firm rules
| Prop firm type | Profit target | Max daily loss | Max total drawdown | Time limit | Minimum trading days |
| Aggressive | 10-15% | 5% | 10% | 30 days | 5 days |
| Balanced (like Fondeo) | 8-10% | 4% | 8% | 45 days | 10 days |
| Conservative | 6-8% | 3% | 6% | 60 days | 15 days |
| Two-phase | 8% / 5% | 5% | 10% | 30/60 days | 5 days each |
Why we recommend Fondeo
After extensive research and testing multiple prop firms, Fondeo constantly emerged as a superior choice for crypto traders. Here’s our analysis:
Multiple evaluation structures: Fondeo offers both a 1-step and a 2-step evaluation option. The 1-step method is faster, while the 2-step method is cheaper. You, as the trade,r can choose the one that works best for you.
Crypto-specific framework: As a crypto-native platform, Fondeo offers support for an extensive range of cryptocurrencies and understands the needs of crypto traders better than anyone else. It has unique features, such as connecting your ByBit demo account for the evaluation stage.
Progressive scaling System: You can start with account sizes as large as $2 million. Additionally, Fondeo offers consistent scaling every four months, based on profitability.
Transparent pricing: Even before you sign up, Fondeo clearly outlines all pricing options, plans, and the initial trading capital in a transparent manner.
Psychology of successful evaluations
The initial evaluation can be challenging, and it is not just market volatility — it’s also psychological pressure. Millions of traders have seen their profits evaporate due to panic-driven, poor decisions. Prop traders often try to increase position sizes, attempting to “recover quickly,” which inevitably triggers the maximum drawdown.
We recommend that traders document their emotional states along with trades. A good trader is in check of their emotions and makes decisions that are logic-driven. The same logic applies to prop trading as well.
Technical strategies proven to pass the evaluation
While it’s important to understand that not everything can go your way while trading, you can take a few steps to make sure you pass the evaluation.
Risk management
Risk management is everything when it comes to trading. With a prop firm evaluation, it is even more critical. You not only have the initial capital to play with, but you also have to be mindful of the drawdowns to adjust your risk appetite.
Our recommendation is never to risk more than 1% per trade during evaluations. For example, on a $100K account, the maximum risk per position is $1,000. It could be considered very conservative.
However, during the evaluation phase, it is essential that you successfully pass the evaluation to earn money. And conservative traders often pass these evaluations. You can get a bit more aggressive if you want to once you’ve passed.
Dynamic position sizing
While we recommend 1% per trade, not every trade has to be the same size. You also need to adjust your position sizes depending on market conditions.
- Market volatility: Safer to have smaller positions to control the downside
- Account equity: You can take slightly larger positions as your profits accumulate.
- Time of day: Reduce size during low liquidity hours
- News and events: Adjust your positions accordingly based on the news and market sentiment.
Tiered stop loss system
Instead of a one-stop loss, use multiple. For example,
- 33% of the position at -5%
- 33% at -10%
- 34% at -15%
This keeps you in trends while protecting against disasters.
Trade reliable assets
There are thousands of cryptocurrencies to trade, which can be overwhelming. However, during the evaluation phase, we recommend sticking with the major pairs such as BTC/USDT and ETH/USDT.
They have good volume and clear support and resistance levels, making it easier for you to clear the evaluation.
Create a training plan
Create a plan before signing up. Some traders prefer to take on higher risks in the first few days to establish a healthy profit margin and mitigate risk in the days to come.
Others prefer to start slowly and scale up as they become more comfortable. It is essential to understand the type of trader you are and develop a tailored action plan.
Mistakes That Kill Evaluations
Here are some of the common mistakes that might kill your chances at evaluations:
| Common pitfall | What it looks like | The fix |
| Revenge trading | “I’ll make back that loss RIGHT NOW” | Take a 30-minute break after any loss over 0.5% |
| Overtrading | 15 trades before lunch | Set a daily trade limit (3-5 max) |
| Ignoring drawdown | “I’m only down 7%… oh wait, 12%” | Check your drawdown every 2 trades |
| News trading | “New crypto laws are being announced, I’m going all in” | Avoid major news events during evaluation |
| Weekend holding | Keeping positions through crypto’s wild weekends | Close everything or minimize positions by Friday afternoon |
Your next move
You don’t have to be a trading genius to pass a crypto prop firm’s evaluation. It’s all about proving you can stick to the rules, manage risk, and keep your cool when things don’t go your way.
If you’re serious about this, here’s what you do next: pick a reputable firm like Fondeo, and create a simple trading plan that you can follow. Practice it on a demo account for a week or two before starting your evaluation.
Many of them fail in their first attempt and eventually pass in their second or third attempt. The difference between failing and eventually succeeding is not talent. It’s learning from your mistakes and improving your strategies the next time.
Frequently asked questions
What is a crypto prop firm evaluation and why is it required?
How can I improve my chances of passing a crypto prop firm challenge?
Why do most traders fail prop firm evaluations?
Coinbase
eToro
eToro
eToro
eToro
COCA wallet
UpHold
Moonacy
Disclaimer
In line with the Trust Project guidelines, the educational content on this website is offered in good faith and for general information purposes only. BeInCrypto prioritizes providing high-quality information, taking the time to research and create informative content for readers. While partners may reward the company with commissions for placements in articles, these commissions do not influence the unbiased, honest, and helpful content creation process. Any action taken by the reader based on this information is strictly at their own risk. Please note that our Terms and Conditions, Privacy Policy, and Disclaimers have been updated.
