Why I failed two challenges with a strategy that works on IC Markets

[LondonScalper]

Two failed evaluations in 2024, both with a London open EURUSD strategy that had made money on my own IC Markets raw account for three years. I blamed the prop firms at first. That was wrong, and it took me a while to work out why.

Failure one was the daily loss limit. On my own money I risk 0.5% per trade and accept that four or five losers in a row happens a few times a year. On a challenge with a 5% daily limit that sounds fine, but I had sized up to 1% per trade to hit the target faster. Four losers on a choppy Tuesday and a fifth that slipped on a stop, and I was done. The strategy didn't change. My risk did.

Failure two was subtler. The evaluation's trading conditions were different from my own account: the spread on EURUSD around 07:00 was wider, commission was charged differently, and my 3-pip targets took a bigger hit. My average winner shrank by roughly 0.4 pips after costs. On a strategy whose edge is maybe 0.8 pips per trade, that wiped out half the expectancy.

What I didn't do was test the strategy on the challenge's own conditions before starting. I assumed an edge travels. Edges as thin as scalping ones often don't.

The third attempt, at a different firm, I passed slowly at 0.5% risk, after first spending two weeks on their free trial logging spreads at my hours.

[Shadow Trader]

The 0.4 pip reduction on a 0.8 pip edge is the clearest example of this I've seen written down. I had something similar, and the cause was partly the commission. My own account charged per round turn, and the evaluation account had it built into a wider spread, which affected my small targets far more.

One thing I'd add to your free trial approach: log the time stamps of fills, not just the spread. On my second attempt, the evaluation server confirmed orders noticeably slower at 08:00 than my own broker, and that showed up as worse slippage on stops.

On the daily limit failure, the maths is worth spelling out. At 1% risk, five losers is 5% before slippage.

Any slip on the fifth and you're over. At 0.5%, you'd need ten losers in a row.

I'd also check whether the daily limit is calculated from the start of day balance or from equity including open trades. That changes how close a choppy morning really gets you.

Did the third firm's conditions turn out close to your own account, or did you adjust the targets to fit?