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What a funded account really costs when only 1 attempt in 5 passes

The fee on the pricing page isn't the price of a funded account. The price is the fee divided by your pass rate.

Illustrative fee: $500 for a $100k challenge. Pass one attempt in five and each pass costs 5 fees, $2,500. One in eight, $4,000. One in three, $1,500. If the fee is refunded with the first payout, which some firms do, the net on the one in five case is $2,500 minus the $500 you get back, so $2,000.

Two phases multiply. If phase one passes 35% of the time and phase two 60%, a full pass is 0.35 times 0.6, which is 21%, about one attempt in 4.8. Paying $500 for each attempt, the expected spend is 500 divided by 0.21, about $2,380 per funded account.

Compare it with what the account might pay. A 4% month on $100k is $4,000, and an 80% split makes that $3,200, if you get that far.

And what is your pass rate? One pass in three attempts is consistent with a true rate anywhere from about 6% to 79%. Four in twenty gives roughly 8% to 42%. Ten in fifty, 11% to 33%. Your pass rate is probably less well known than it feels.

Work out what the funded account has to pay to cover the cost. At a one in five pass rate, each pass costs $2,500. With an 80% split, the account needs to generate $3,125 of gross profit to pay that back, which is 3.1% of $100,000. But accounts don't all survive to a first payout. If 30% breach before it, then 0.7 times 0.8 times the profit has to equal $2,500, so the profit needed is $4,464, or 4.5%. So the real hurdle is between 3% and 4.5% of the account before you've made a cent, and a strategy that makes 2% a month needs several months, with a breach risk each month.

This matches my own numbers far too well. I went through seven challenge attempts before my first pass, and when I added it up afterwards, I'd spent more on fees than my first two payouts brought in. At the time each attempt felt like a single affordable fee, so I never looked at the running total until it was already large.

What changed my pass rate was not a new strategy but changing how I traded the challenge. I'd been sizing up early to get the target done in a week, and most of my failures were in the first five days. When I cut risk to around half a percent and accepted that the challenge would take the full month, my next three attempts gave me two passes.

The confidence interval point is the bit most people skip. With so few attempts behind you, you can't really tell whether you're a one in three trader or a one in eight trader. I now treat my own pass rate as the worse end of that range when deciding whether another attempt is worth paying for.

The pass rate is an estimate with error bars. A formula that gives sensible bounds for small samples is the Wilson interval. For 1 pass in 3 it gives about 6% to 79%. For 4 in 20, 8% to 42%. For 10 in 50, 11% to 33%. Even at 50 attempts, which is a lot of fees, the interval spans a factor of three. If the fee decision depends on whether the pass rate is above 20%, you won't know for sure after any realistic number of attempts. Demo results and a backtest of the same rules can add information, but only if they used the same limits and the same trading hours.

Funded accounts also end. Suppose the account has a 30% chance of breaching each month, and a payout of $2,400 at the end of each month it survives. Expected number of payouts is 0.7 plus 0.7 squared plus 0.7 cubed and so on, which sums to 0.7 divided by 0.3, about 2.33. That's $5,600 of expected payouts. Take away the $2,500 cost of the pass and the expected net is about $3,100. Change the breach chance to 50% and the expected payouts fall to 1 payout, $2,400, which doesn't cover the $2,500. The monthly breach chance carries the most weight.

A small table keeps this honest. One row per attempt: date, account size, fee, result, reason for a fail, days used. Another for funded accounts: start date, payouts received, date of breach. After ten attempts, add up the fees, divide by the passes, and compare with the payouts received. Doing it by hand makes the cost per pass visible in a way a statement of fees paid, spread over months, never does. It will also show which rule caused the fails, daily loss or max loss or time out, which is more useful than the total. If the firm sells discounted attempts, record the price actually paid, since cost per pass is only as accurate as the fee column.

Dividing the fee by the pass rate is the honest way to price it. The other side of the ledger is how long a funded account survives and how much it pays before it is lost. If the average funded account pays out once and then breaches, the real return on a $2,500 cost per pass depends entirely on that single payout. Tracking expected payouts per funded account alongside the cost per pass gives a much clearer picture of whether the whole exercise makes money.