What Percentage of Prop Phase 1 Would a Coin Toss Pass? The Exact-Solution Answer Comes Out Above 50% [Analysis]
※ This article is an analysis (opinion piece), not investment advice. The calculations are theoretical model values and do not guarantee actual results. Firm-specific rules are updated frequently, so always check each firm's official site. (Last updated: August 31, 2026)
The question: if you trade completely at random, what percentage of Phase 1 would you pass?
No charts. No indicators. Flip a coin — heads you buy, tails you sell. Just that. What percentage of a prop firm's Phase 1 would you pass?
This turns out to be a problem you can solve exactly. A prop challenge has the structure of "a profit target as an upper wall and a max drawdown as a lower wall, with a random walk in between" — which is precisely the gambler's ruin problem, something probability theory has studied for over 200 years.
The conclusion up front: with zero fees, 55.6%. FTMO comes out at exactly 50.0%. Even a monkey flipping a coin would clear Phase 1 half the time.
And with a 5% fee taken out, that drops to 43.2% — sinking into the 8% range for 1-step plans with a tight daily drawdown limit.
Assumptions behind the calculation
| Item | Setting |
|---|---|
| Account size | ¥20M |
| Size per trade | ¥200,000 (1% of capital) |
| Win/loss | 50:50 coin toss |
| Fee | Win +¥190,000 / Loss -¥200,000 (5% off the win) |
| Deadline | None |
| Max DD | Fixed, based on starting balance (not trailing) |
| Daily DD | Measured from that day's opening balance |
A 5% fee corresponds to an expected value of -¥5,000 per trade, i.e. -2.5% of the stake. This is a realistic level once you combine spread and commission.
1. With zero fees, you can work it out by hand
A random walk with just two walls, under a fair coin, resolves with the following formula:
Pass rate = max DD / (profit target + max DD)
Just divide the distance to the lower wall by the distance between the two walls. Lot size is completely irrelevant here (halving the stake just doubles the number of trades to resolution; the probability doesn't change).
| Phase 1 rule | 0% fee | 5% fee | Drop |
|---|---|---|---|
| 2% target / 6% max DD (Fintokei's entry plan) | 75.0% | 65.6% | -9.4pt |
| 8% target / 10% max DD (standard 2-step) | 55.6% | 43.2% | -12.4pt |
| 10% target / 10% max DD (FTMO 2-step) | 50.0% | 36.7% | -13.3pt |
| 10% target / 6% max DD (1-step plans) | 37.5% | 28.1% | -9.4pt |
FTMO landing exactly on 50.0% isn't a coincidence. A 10% profit target and a 10% max DD are symmetric, so by definition a coin toss lands exactly on half.
The only thing that matters here is "is the max DD farther away than the profit target, or not." The standard 2-step setup (8% target / 10% DD) has a farther lower wall, so even random trading clears 50%.
2. A 5% fee cuts 12 points
A mere 5% fee takes 55.6% down to 43.2%. That drop should feel bigger than intuition suggests. The reason is the number of trades to resolution.
Solving the 8% target / 10% max DD case exactly, it resolves after an average of 92 trades. At an expected value of -¥5,000 per trade, the expected fee paid comes to about ¥460,000. Since the profit target is ¥1.6M, that means fees alone eat up 29% of the target.
| Win / loss | Expected value per trade | Pass rate |
|---|---|---|
| +¥200,000 / -¥200,000 (0% fee) | ±¥0 | 55.6% |
| +¥195,000 / -¥200,000 (2.5%) | -¥2,500 | 49.2% |
| +¥190,000 / -¥200,000 (5%) | -¥5,000 | 43.2% |
| +¥180,000 / -¥200,000 (10%) | -¥10,000 | 30.9% |
| +¥160,000 / -¥200,000 (20%) | -¥20,000 | 11.9% |
A 2.5% fee is already enough to drop below 50%. Doing a random walk inside a prop firm's walls is that precarious a proposition.
3. Daily drawdown only kicks in based on "how many trades a day you take"
This is the most interesting part of this analysis.
At ¥200,000 per trade, a 5% daily DD (= ¥1,000,000) only gets triggered after 5 consecutive losses. In other words, if you trade 4 times a day or fewer, the daily DD basically doesn't exist.
| Phase 1 rule | 1x/day | 3x/day | 5x/day | 10x/day | 20x/day |
|---|---|---|---|---|---|
| Fintokei ProTrader: 8% target / 10% DD / 5% daily | 43.2% | 43.2% | 34.9% | 30.0% | 24.7% |
| FTMO 2-step: 10% target / 10% DD / 5% daily | 36.7% | 36.7% | 27.5% | 22.3% | 17.4% |
| The5ers 1-step: 10% target / 6% DD / 3% daily | 28.1% | 8.6% | 8.1% | 9.4% | 11.2% |
1-step plans with a 3% daily limit are overwhelmingly brutal. Three losses in a row is instant death, so the moment you take 3 trades a day, the pass rate falls from 28.1% to 8.6%. A 2-step plan with a 5% daily limit requires 5 losses in a row, making it far more forgiving.
Even for the same label of "daily drawdown," there's an order-of-magnitude difference in difficulty between 5% and 3%. It's worth pointing out that ¥200,000 per trade at 3 trades a day — an operation practically anyone might casually run — is exactly the setup that steps on this landmine.
Note that pushing up to 20 trades a day actually improves the 1-step plans (8.1% → 11.2%), because while the odds of hitting the daily wall go up, so does your chance of blowing well past the upper wall within a single day.
4. Solving Phase 1 by coin toss for every firm
Here are exact solutions for every rule set in this site's plan database. Fee 5%, size per trade 1% of capital.
| Phase 1 rule | 0 fee | 1x/day | 5x/day | 10x/day | Firms |
|---|---|---|---|---|---|
| 2% target / 6% DD / 3% daily | 75.0% | 65.6% | 42.6% | 33.8% | Fintokei (3-step) |
| 8% target / 10% DD / 5% daily | 55.6% | 43.2% | 34.9% | 30.0% | Fintokei, Funded7, FundingPips, FundedHive |
| 8% target / 10% DD / 4% daily | 55.6% | 43.2% | 27.6% | 20.7% | ATFunded, Blueberry, FundedElite |
| 7% target / 8% DD / 4% daily | 53.3% | 42.9% | 31.2% | 24.1% | ThinkCapital (3-step) |
| 6% target / 6% DD / no daily | 50.0% | 41.6% | 41.6% | 41.6% | FundedHive (Instant) |
| 10% target / 10% DD / 5% daily | 50.0% | 36.7% | 27.5% | 22.3% | FTMO, AlphaCapital, Blueberry |
| 8% target / 8% DD / 4% daily | 50.0% | 39.2% | 26.9% | 20.7% | AlphaCapital, ThinkCapital |
| 6% target / 5% DD / no daily | 45.5% | 38.0% | 38.0% | 38.0% | ATFunded, The5ers (3-step) |
| 10% target / 8% DD / 4% daily | 44.4% | 32.9% | 19.9% | 14.7% | Funded7, TradingCult |
| 12% target / 9% DD / 3% daily | 42.9% | 29.8% | 5.0% | 6.0% | PipFarm (1-step) |
| 6% target / 4% DD / no daily | 40.0% | 33.6% | 33.6% | 33.6% | ATFunded, E8 Markets |
| 10% target / 6% DD / 3% daily | 37.5% | 28.1% | 8.1% | 9.4% | The5ers, FundingPips, ThinkCapital |
| 6% target / 3% DD / no daily | 33.3% | 28.1% | 28.1% | 28.1% | ATFunded, E8 Markets |
The easiest is Fintokei's entry-level plan (a mere 2% Phase 1 target), passing 65.6% of the time even by coin toss. The hardest is PipFarm's 1-step plan (10% target / 9% DD / 3% daily), which falls to 5.0% at 5 trades a day. That's a 13x spread.
The common belief that "1-step is easier" is, at least from a probability standpoint, the opposite of reality. 1-step plans have higher targets (10-12%) and tighter DDs (6-9%), so the wall asymmetry is already tilted against you from the start.
5. What happens when you add a consistency rule
We also applied the consistency rule (max profit day's profit ÷ sum of all positive days) covered in an earlier and a more recent article to the coin toss.
| Trades/day | No consistency rule | 50% | 33% | 25% | 20% |
|---|---|---|---|---|---|
| 1x/day | 43.2% | 43.1% | 43.0% | 43.2% | 43.1% |
| 3x/day | 41.5% | 41.5% | 41.3% | 40.5% | 40.1% |
| 5x/day | 32.0% | 31.7% | 30.1% | 27.2% | 24.3% |
| 10x/day | 25.4% | 22.4% | 15.8% | 10.7% | 6.7% |
| 20x/day | 18.4% | 12.5% | 5.2% | 1.9% | 0.7% |
A coin toss done once a day is essentially immune to the consistency rule (43.2% → 43.1%). Since it takes an average of 92 days to resolve, profit is spread out across 92 days, so the max day's share of the total is already only around 2% to begin with — nowhere near a 20% threshold.
Conversely, at 20 trades a day, a 20% threshold drops it to 0.7%. Essentially never passes.
This is exactly the same structure we found with martingale in the previous article. What the consistency rule punishes is not "the method" but "profit being concentrated in time." Even coin-toss trading with zero intent behind it gets killed by the consistency rule the moment you raise the frequency. Put another way, the previous conclusion — that spreading trades thin across more days neutralizes the consistency rule — is reproduced here as well.
6. So what does this actually mean?
According to primary data from overseas, the actual pass rate for prop challenges is 5-14%.
Meanwhile, a coin toss — with a 5% fee, a daily DD, and even 10 trades a day — still comes out to 30.0%. At 1-4 trades a day, it's 43.2%.
The average prop trader is losing to a coin toss.
And by a wide margin. Looking at the sensitivity table, a real-world pass rate of around 10% corresponds to a coin toss paying a 20% fee (11.9%). In other words, the average trader's decision-making produces the same result as betting randomly and then throwing 20% of the stake down the drain.
There are probably two causes:
- Position sizes are too large. This article fixes each trade at 1% of capital. Bump that to 5%, and the number of trades to the wall drops to a fifth, sending the odds of a one-shot hit to the daily DD skyrocketing.
- The daily DD design isn't being read. As shown above, 3% and 5% daily limits differ in difficulty by an order of magnitude. And yet most people buy a challenge without ever deciding how many times a day they'll trade.
And in the real-EA testing from earlier articles, a trend-following approach with drawdown placed in the 20-30% band scored 65-70% (see the article) — clearly beating the coin toss's 43.2%. An edge does exist, but the overall picture here is that the average person drops out below coin-toss level before they ever reach it.
About the methodology
The numbers in this article are not Monte Carlo. They're formulated as an absorbing Markov chain for the prop challenge, expanded breadth-first over only the reachable states, and solved as an exact probability via the linear system (I-A)f = c.
Validity was confirmed in two ways:
- Match against a closed-form formula: under zero fees and no daily DD, this matches the analytical solution
DD / (target + DD)to 1e-16 precision (floating-point rounding-error level). - Match against an independent Monte Carlo run: cross-checked against a 400,000-path simulation, with a maximum difference of 0.11 points (within sampling error).
Only the consistency-rule table was computed via 200,000 Monte Carlo runs, since keeping a daily profit history as part of the state would blow up the state space. That table also determines pass/fail "at end of day," so even under identical conditions it comes out slightly more conservative than the exact-solution table. (The fact that both agree at 43.2% for the 1-trade-per-day case backs up the validity of that conversion.)
FAQ
Q. Does the probability change if I change the lot size?
Not if the fee is zero. With a fair coin, halving the stake just doubles the number of trades to the wall — the pass rate stays the same. But it's a different story once fees are involved. Making the stake smaller increases the number of trades, inflating the total fees paid, which works against you. Go too big, on the other hand, and a single loss can kill you against the daily DD. The optimal point is a bit below "the largest size that can't single-handedly touch the daily DD."
Q. Why is 1-step harder?
Because the profit target is higher (10-12%) and the max DD is tighter (6-9%). The wall asymmetry is tilted against you from the outset. 1-step is called "easier" because it only takes one phase to clear — but the per-phase difficulty is normally higher than 2-step. If you want to compare the probability of clearing the whole thing, you need to multiply Phase 1's probability by Phase 2's.
Q. What about a trailing DD?
This article calculates using a fixed DD based on the starting balance. With a trailing DD (where the lower wall rises along with profit), the lower wall gets closer the further you climb, so the probability clearly gets worse. For more, see Drawdown types explained.
Q. Is it worth taking a challenge with a coin toss?
Not recommended. But not because "it's a loss." A precise calculation of the relationship between the fee and the max DD shows that, for firms with a static DD specifically, the expected-value structure itself can come out positive (verified in a follow-up article). Still, we don't recommend it, for three reasons: (1) the variance is extremely high and you'd need dozens of runs before the expected value shows up, (2) there's no guarantee random entries would be treated as "genuine trading," creating a risk of payout denial, and (3) allocation caps prevent you from running enough trials.
The point of this article isn't to recommend a coin toss — it's to give you a yardstick to check whether your own trading is losing even to a coin toss. Check whether your last 100 trades beat the numbers laid out here.
Sources
- Track360 – Prop Trading Industry Statistics 2026 (pass rates, payout-reach rates)
- QuantVPS – Prop Firm Statistics 2026
- FTMO – Forbidden Trading Practices
- Profit targets, max DD, daily DD, and minimum trading days for each firm are taken from this site's comparison page database (as of August 2026)
※ Each firm's rules are revised frequently. Always check the latest version on the official site before purchasing.
Related articles
- Is a challenge "expected-value positive just by buying it"? Backtesting a coin-toss EA across 16 firms
- The consistency rule was targeting trend-following all along: testing 10,000 scenarios with a real EA
- Does martingale work as a counter to the consistency rule? Real-EA testing plus a review of the terms
- Drawdown types explained: the difference between static DD, trailing DD, and daily DD
- The complete prop firm guide: a roadmap from choosing a firm to getting paid
Written by
Hosono P | the prop firm strategist
I buy challenges with my own money and record everything through to the payout. Recorded payouts: ¥6.1M in total from Fintokei, Fundora and Funded7, plus $4,776 from The5ers (as of September 2026). Author of the semi-discretionary EA "ELDRA".