Profit target

Definition and measurement

The target is measured on the account balance, that is on closed trades, net of commissions and fees charged by the firm's platform. Open profit does not count toward it. Reaching the target is necessary but not sufficient: firms also require a minimum number of trading days, and those that apply a consistency rule during the evaluation may hold the pass until no single day exceeds the permitted share of total profit.

• Percentage targets are relative to the nominal size of the account, not to the trader's cash outlay.
• The maximum drawdown is usually smaller than the target, so the attempt's reward-to-loss ratio is set by the rulebook, not by the trader.
• Some firms let the target be reached in one day while others cap the contribution of the best day, which changes how large a good day can be.

Target versus drawdown

The ratio between the target and the drawdown allowance is the structural difficulty of an evaluation. A target of one and a half times the allowance requires the strategy to make more than it may lose from its worst point, sequence included. Two firms with the same headline target can differ entirely on this ratio, and on whether the drawdown trails equity, balance or end-of-day balance while the trader works toward the target.

In Senzoukria

The Prop firm rules form records the target in the field Profit target ($) inside the Evaluation section, next to Minimum trading days and Maximum trading days. The Prop firm simulation replays the recorded trades through those values and reports the Evaluation pass rate and Attempts per pass; the card Should I buy this evaluation, fed by the same rules, shows Passes on the first attempt, Passes eventually and Evaluations before a pass with a median and a worst-five-percent figure. An attempt that runs out of sessions before reaching either the target or a breach is counted nowhere, because counting it as a failure would lower the pass rate as the tested period gets shorter. The same card combines the target with the fees to estimate the net cash result on the sample.

Common mistakes

• Assuming open profit counts. A position that shows the target unrealised has not passed.
• Forgetting platform fees. Commissions charged on the evaluation reduce the net balance that is compared with the target.
• Reading the target in isolation from the drawdown. The same target with a trailing intraday drawdown and with a static drawdown are different tasks.
• Sizing up near the target. The last few hundred dollars are subject to the same drawdown rule as the first.