Profit target vs drawdown: the ratio that shows how hard a challenge really is
An 8% target sounds easier than 10% — until you check how much room you're given to lose. Here is how to read a challenge's target against its drawdown.
Most traders compare challenges by the headline profit target: 10%, 8%, 6%. But a target on its own tells you little. What matters is how far you have to go up compared with how far you're allowed to go down. That relationship — target vs maximum loss — is one of the simplest ways to gauge how demanding a challenge is.
This is a neutral explainer using plans from the firms we track. Always confirm the rules for your exact product and account size.
The simple ratio
Divide the profit target by the maximum overall loss:
- Ratio below 1 — you need less gain than the loss buffer you're given.
- Ratio of 1 — the target equals the buffer.
- Ratio above 1 — you must gain more than you're allowed to lose.
It's a rough guide, not a pass-rate predictor. But it quickly shows when a "low" target is paired with a tight buffer.
What the ratios look like in practice
A few examples from our dataset (phase 1 targets):
| Plan | Target | Max loss | Ratio |
|---|---|---|---|
| FTMO 2-Step | 10% | 10% static | 1.0 |
| FundedNext Stellar 2-Step | 8% | 10% static | 0.8 |
| FundedNext Stellar 1-Step | 10% | 6% static | ~1.7 |
| FundingPips 2-Step Pro | 6% | 6% | 1.0 |
| Maven 1-Step Standard | 8% | 5% trailing | 1.6 |
| E8 Markets E8 One | 6% | 4% trailing | 1.5 |
| Take Profit Trader $50K | $3,000 | $2,000 EOD trailing | 1.5 |
The pattern is clear: 1-step challenges tend to ask for more gain relative to the buffer. That is the trade-off for skipping a verification phase.
Why the drawdown type changes the maths
The ratio treats every buffer the same, but they aren't:
- Static drawdown (e.g. FTMO 2-Step, FundedNext Stellar 2-Step) stays fixed at the starting balance. Your room is exactly what's advertised.
- Trailing drawdown (e.g. Maven 1-Step, E8 One) follows your highest equity. Open profit that reverses can eat into the buffer, so the real room is often smaller than the number suggests.
- End-of-day trailing (e.g. Take Profit Trader, Topstep) only moves at the close, which is more forgiving intraday but still ratchets upward.
A 1.5 ratio on a trailing account is usually harder than a 1.5 ratio on a static one. Our drawdown explainer goes deeper.
Don't forget the daily limit
The overall buffer isn't your only ceiling. Daily loss limits cap how much of it you can use in one session — for example 3% on FTMO's 1-Step and FundingPips' 1-Step, or 5% on the FTMO 2-Step. A tight daily limit effectively spreads the challenge over more days. Some futures evaluations, like Topstep's Trading Combine, have no required daily limit at all, which shifts the discipline onto you.
Multi-phase totals
On 2- and 3-step plans, look at the total you need across phases. The5ers High Stakes asks for 10% then 5%; Maven's 3-Step asks for 3% three times against a 3% static buffer. Smaller steps can feel easier, but each phase is a fresh chance to breach. See our guide to 1-step vs 2-step vs 3-step for more on that trade-off.
Key takeaways
- Compare the profit target against the max loss, not in isolation.
- Ratios above 1 mean you must gain more than you can lose — common on 1-step plans.
- Trailing drawdown usually makes the real buffer smaller than advertised.
- Daily loss limits and multi-phase totals change the picture too.
- No ratio guarantees a pass; it only helps you compare like with like.
Compare targets and buffers side by side
The account comparison tool lines up targets, daily limits and drawdown types across plans, and every firm dossier links to the firm's own rule pages. Unsure about a term? Check the glossary. If you trade with automation, our AI trading hub covers which firms allow EAs.
