Expected cost of one funded account is the fee over the pass rate: a $299 fee worked out

[Fairman]

Expected cost of one funded account is the fee over the pass rate: a $299 fee worked out

Take a made-up fee schedule for a $50,000 evaluation, $299 per attempt, no refund. The key number is the chance of passing, because the expected cost of getting one funded account is the fee divided by the pass rate.

Pass rate 10%: $299 / 0.10 = $2,990, which is 6.0% of the account size.
Pass rate 15%: $1,993.
Pass rate 20%: $1,495.
Pass rate 30%: $997.

On average you need 10 attempts to get one pass at a 10% rate, 5 at 20%, and 3.3 at 30%. Those are averages across many traders or many attempts, so any single person might pass on the first try or the twelfth.

Now compare with what the funded account might pay. Suppose a first payout of 3% of the account is $1,500 and you keep 80%, so $1,200. At a 20% pass rate you've spent an expected $1,495 to receive $1,200, a loss of $295 on the first payout. The break-even pass rate for that payout is $299 / $1,200 = 24.9%.

None of this says whether to take a challenge. It says that a pass rate you've measured in a demo or in past attempts tells you more than the price list. If you've made six attempts and passed once, your estimate is 17%, but with so few attempts the error is large, so write the estimate down with that caveat.

[Fairman]

Resets and retries change the pattern. Some firms charge less for a retry or give a discount after a fail, say $199 instead of $299. If the discount applies to every attempt after the first, the expected cost at a 20% pass rate becomes 299 + 199 x 4 = $1,095 for the five expected attempts, compared with $1,495. Check whether a discount really repeats, and if it applies only once, the saving is $100 in total. The calculation takes a minute, and it can change which of two firms is cheaper at the same headline price.

[Fairman]

The payout side is as uncertain as the pass side. Not every funded account reaches the first payout, since a funded account can be lost too. If 70% of funded accounts reach a payout and the average first payout is $1,200 after the split, the expected value per funded account is $840. Then the break-even pass rate rises to $299 / $840 = 35.6% for a payout that covers the fee. The numbers I've used are placeholders, so use your own estimates, and put the ones you are least sure of through a range, not a single value.

[Fairman]

To estimate your own pass rate, count how many evaluation-like windows you've passed on demo. Take every start date in your journal, apply the target and loss limit as the rules say, and see whether the target was hit first. With 60 start dates, if 14 pass, the estimate is 23%. But the windows overlap, so neighbouring start dates share most of their trades and the information in 60 dates is closer to the information in a handful of independent attempts. Give the estimate wide error bars, and don't plan around the middle of the range.

[Fairman]

One more thing is to compare cost with account size. The same $299 on a $25,000 account is 1.2% of the size, and on $100,000 it would be 0.3%, though firms don't price it that way. Larger accounts have larger targets in dollars, but the target in percent is the same, so your pass rate stays about the same and the fee per dollar funded goes down. If a firm's larger account costs less than proportionally, then for the same pass rate, the bigger one is cheaper per dollar of buying power. It only helps if your sizing stays at the same risk percentage.