Static drawdown only
The max drawdown is always measured from the starting balance. There is no trailing option, so if your challenge uses a trailing drawdown, track that limit by hand.
Prop firm backtesting
A prop firm challenge simulator for forex backtesting.
Give a backtest session a profit target, a daily drawdown and a max drawdown, then replay history and trade it as you would live. Equity is checked against all three as the candles move, and the first pass or fail is locked on the session with the number of days it took.
3limits, checked on equity with open positions included
00:00UTC daily reset, on the chart clock
1verdict per session, locked once decided
Why it matters
A profitable backtest is not a passed challenge. A challenge judges the path, not the final balance.
A strategy can finish a year in profit after a drawdown deep enough to breach the max loss, or after one bad day that breaches the daily limit. In a real challenge the attempt ends at the breach, and the recovery that made the backtest look good never happens.
So the useful number is not whether the strategy makes money. It is how often it gets through the rules. The method, step by step, is in how to backtest a prop firm challenge. This page covers what the challenge mode in BacktestFlow measures for you, and what it leaves to you.
The rules
What the challenge mode measures. Three limits, all percentages of the starting balance, all checked on equity.
| Rule | How BacktestFlow measures it |
|---|---|
| Profit target | A percentage of the starting balance. Reached when equity, open positions included, stands that far above the starting balance. |
| Daily drawdown | A percentage of the starting balance. Measured from the balance carried into the day down to the deepest equity of that day. Resets at 00:00 UTC of the chart clock, not of your wall clock. |
| Max drawdown | A percentage of the starting balance, never smaller than the daily one. Static: measured from the starting balance down to the deepest equity of the session, with no trailing high water mark. |
| Verdict | Failed on the first breach of either drawdown, passed on the first touch of the target. If a breach and the target arrive together, the fail counts. The first verdict is locked on the session. |
| Days taken | Calendar days on the chart clock, counting the start date as day 1, up to the candle that decided the challenge. |
Equity means balance plus the floating result of open positions, so a trade that is still open can breach a limit before its close is saved. The deepest point reached is kept, so a dip that later recovers still counts against the drawdown.
A challenge session
How a challenge session works. From the new session form to a locked verdict.
Switch the challenge on when you create the session.
Enter the profit target, the daily drawdown and the max drawdown as percentages. Each shows its money equivalent on your starting balance as you type, and the max drawdown cannot be lower than the daily one. The limits are fixed once the session starts.
Pick a start date, or let it be picked for you.
Choose a date, or use Random so the start is not chosen by looking at the chart. The replay hides everything after it.
Trade the replay as you would live.
Under the balance, the sidebar shows the challenge axis: profit target on one side, max drawdown on the other, your current position between them, plus the daily drawdown, each with the money behind it.
The first pass or fail is locked.
The panel collapses to a Passed or Failed chip with the number of chart days it took. The result cannot change afterwards, and you can keep trading the session.
Repeat on other start dates.
The session list shows each chip next to the session name, so a row of attempts reads at a glance. The trades of every session feed the statistics like any other backtest.
The limits
What it does not do. Know these before you rely on a pass, because several real challenges work differently.
No firm presets
No firm's rule set is built in. You enter every number yourself, from the firm's current terms, as three percentages.
No minimum trading days check
A minimum number of trading days is not enforced. The verdict shows how many chart days the challenge took, so you can check it against the minimum yourself.
No pass rate across sessions
Each session carries its own verdict. Counting passes over many attempts is up to you, and the sample size calculator shows how wide the error bars on that pass rate are.
Availability
Pro and Max plans.
The prop firm challenge is part of the Pro and Max plans. On the free plan you can replay and backtest, but the challenge switch stays locked. The plans and what each includes are on the pricing page.
BacktestFlow is not affiliated with, endorsed by or sponsored by any prop firm. The challenge mode simulates the kind of rules such firms apply, on historical candles: passing it says nothing about passing a real firm's evaluation. See the risk disclosure.
Related
Read next.
- How to backtest a prop firm challengeThe method: rules, sizing from the daily limit, start dates, and reading a pass rate.
- Manual backtesting software for forexHow a replay session works, from the first candle to the statistics.
- Every statistic BacktestFlow computesThe full metric list.
- Sample size calculatorThe Wilson interval for any rate and number of attempts.
FAQ
Frequently asked questions.
It means replaying historical price under the rules of a prop firm challenge (a profit target, a daily loss limit and a maximum loss limit) and recording whether each attempt would have passed or failed. A normal backtest asks whether a strategy made money over a period. A challenge asks whether the account touched a limit on the way, so a profitable strategy can still fail most attempts.
The limit is a percentage of the starting balance. The drawdown is measured from the balance carried into the day down to the deepest equity reached during that day, open positions included, so a losing trade that is still open counts. The day resets at 00:00 UTC of the chart clock, the date of the replay, not the time on your own clock.
No. The max drawdown is static only: it is always measured from the starting balance, and profits never raise the floor. If the challenge you are preparing for uses a trailing drawdown, BacktestFlow will be more lenient than the firm once you are in profit, so track that limit by hand or use a tool that models it.
No. There are no firm presets. You enter the profit target, the daily drawdown and the max drawdown yourself, as percentages, using the numbers from the firm's current rules. The form starts at 8%, 5% and 10%, which you change to match.
No. The challenge mode does not enforce a minimum number of trading days. It does record how many calendar days on the chart clock each challenge took, so you can compare that against the firm's minimum yourself.
No. The three percentages are set when you create the session and stay fixed for its whole life, like the rules of a real attempt. To try different limits, start a new session.
The Pro and Max plans. On the free plan you can replay and backtest, but the challenge switch on the new session form stays locked.
Not necessarily. The challenge mode is a simulation of rules on historical candles, not an evaluation by any firm. A real firm applies its own rules, data, platform and reset time, and you trade it in real time rather than in replay. Use the backtest to learn how often your strategy survives the rules, then check the firm's current terms before you buy.
Find out how often your strategy gets through the rules. Replay history under a challenge's limits before you pay for a real one.
Free plan to startChallenge mode on Pro and MaxRuns in your browser